They think it’s all over…
We’ve previously written about the sad demise of Bury FC – the 135 year-old double FA Cup winners who, in August, became the first team to be expelled from the football league during a season since 1992.
This follows the news that Bury’s owner Steve Dale has defaulted on the company voluntary arrangement (CVA) that was agreed last summer to settle the club’s £5 million debts having failed to provide the money required to fund it.
This means that liquidation of the club remains a certainty. A spokesperson for the administrators said: “The CVA has formally defaulted and we will now be looking at taking the necessary action to deal with the default”.
Chris Horner, Insolvency Director with BusinessRescueExpert said: “The usual procedure when a CVA defaults is that the supervising liquidator will formally petition the court to begin a winding-up of the company.
“If this happens then whatever remaining assets belonging to the club will be sold off by the liquidator – including the right to use the name Bury FC which would be of interest to supporters looking to relaunch a new entity lower down the football pyramid.
“Of course sometimes this is impossible so recently reborn “phoenix” clubs such as Darlington, Wimbledon and Hereford United have come back named slightly differently – Darlington 1883; AFC Wimbledon and Hereford FC.”
The club’s Gigg Lane ground has a £3.8 million mortgage held by Capital Bridging Finance Solution who would effectively repossess the stadium. They could sell this to any consortium or group prepared to buy it.
Creditors were informed in January that Mr Dale had missed the maximum six-month deadline to provide the monies to fund the CVA and had been given a 21 day extension up to Tuesday 11th February to do so or the CVA would be terminated.
The terms of the CVA set out that football creditors such as former players and other clubs would receive their debts paid in full, approx. £1 million, whereas non-football creditors including staff and HMRC would receive 25p in the pound or 25% of the remaining outstanding debt – approx. £4 million.
The operation of the CVA had previously been investigated by the Insolvency Practitioners Association following concerns regarding its operation but it was concluded this week having determined that there was insufficient evidence on which any disciplinary action could be founded.
“They have strict conditions attached for a reason but these will hopefully allow a company to survive and restructure its debts to keep staff employed, get back into shape and eventually, profitability.”
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