Bury heading for liquidation after owner Steve Dale defaults on payments

David Conn on 14 February 2020

Bury’s owner Steve Dale has defaulted on the company voluntary arrangement (CVA) he agreed last summer to settle the club’s £5m debts, having failed to provide the money required to fund it.

The deadline passed on Tuesday and the supervisor of the CVA, the accountant Steven Wiseglass, confirmed that the funding had not been provided to service it. Dale’s failure makes it almost certain that the 135-year-old club, expelled from the Football League in August because Dale did not provide convincing evidence that he had the money to fund it for a season, will go into liquidation.

Wiseglass, a director at the insolvency firm Inquesta, said in a statement: “The CVA has formally defaulted and we will now be looking at taking the necessary action to deal with the default.”

According to another insolvency practitioner with experience of working on football clubs in crisis, the normal procedure when a CVA defaults is that the supervisor of the CVA, in this case Wiseglass, will formally petition for the winding up of a company. If that happens, Bury’s few remaining assets will be sold by a liquidator, which could include the right to use the name Bury FC.

Dale said in response to a question from the Guardian about his defaulting on the CVA, and whether it is correct that there have been six staff remaining at Bury who have not been paid since September, that “lies” were being told, that “nobody want [sic] to tell/hear the truth”, and that “my conscience is clear though”.

The Gigg Lane ground has a mortgage on it of more than £3.8m held by a company, Capital Bridging Finance Solutions, which would in effect repossess the stadium. It could be expected to sell it if the supporters’ “phoenix club,” or a consortium of businessmen or other group, can agree a deal and has the money to buy it.

Wiseglass told creditors last month that Dale had missed the maximum six-month deadline to provide the money to fund the CVA, and had been given a further 21 days to do so, or the CVA would be terminated. In that settlement, agreed on 18 July, Dale committed to paying the former players and other “football creditors”, owed approximately £1m, in full, and 25p in the pound to HMRC and other “non-football creditors” owed approximately £4m.

“The terms of the CVA were that funds should be introduced within a maximum period of six months,” Inquesta said in the letter to creditors last month. “This came to an end on 18 January 2020. Due to no funds being received, we have issued a notice of breach to the director, giving 21 days for the funds to be introduced. Should the breach not be remedied within the defined timescale, the supervisor will review the position and will terminate the agreement.”

Dale, whose business record shows that he has been involved with companies in financial difficulties which have often then been dissolved or liquidated, took over Bury for £1 from the previous owner, Stewart Day, in December 2018. He said he was doing so as a philanthropic venture, but he never satisfied the EFL that he had the “source and sufficiency” of funds required to run it, either before or after the takeover.

The Fiver: sign up and get our daily football email.

The team managed by Ryan Lowe won promotion to League One last season, but the players, including some who had been signed under Day the previous summer, revealed in May that they had not been paid since February.

Dale was listed in the CVA as having £3.6m owed to him, which was understood to have been originally loaned to the club by Day. In July a company, RCR Ltd, owned by the partner of Dale’s daughter, bought for £70,000 a £7.1m debt Bury owed to Day’s property company, Mederco, which had collapsed into administration. The £7.1m debt that RCR wielded in the subsequent creditors’ meeting was crucial in having the votes to approve the CVA, as HMRC and a number of other creditors voted against it.

Dale had committed to providing the money to pay off the creditors, with the proposal by Inquesta stating: “Mr Dale has confirmed that he will personally guarantee that sufficient funds will be introduced.”

Dale told the Guardian after the notice of breach was issued that he was still intending to settle the club’s debts, and was “just finalising saving the club through the CVA and applying to play football next season”.

Shortly after the club was expelled by the EFL the Insolvency Practitioners Association announced that it was to hold an investigation into the “operation” of the CVA, following concerns and information which had been brought to its attention. The IPA confirmed this week it had concluded its investigation, having determined there was “insufficient evidence on which any disciplinary action could be founded”.

Latest football headlines

Latest Football News