Steve Dale, the owner of the financially stricken Bury, has offered to settle some of the club’s debts and avoid a winding-up petition by paying the football creditors – including the players – in full, and a quarter of the almost £4m owed to others. But Bury still face the likelihood of a 12-point penalty being imposed before the beginning of next season.
Dale, who took over the club for £1 from the previous owner, the property developer Stewart Day, in December, is stated in the company voluntary arrangement (CVA) proposal to be owed £3.6m himself.
The proposal – issued to creditors and shareholders by an insolvency practitioner, Steven Wiseglass – states that Dale will not be seeking any of that money back, but the large debt attributed to him gives him a substantial vote in the process. A “virtual meeting” of creditors is to be held on 9 July to approve the CVA, which requires agreement from creditors owed 75% or more of the total debts as well as from 50% of shareholders.
The proposal excludes £3.7m owed in loans taken out with a company, Capital Bridging Finance Solutions, which are secured on the club’s Gigg Lane ground. Bury’s lounge and sports bar, which was also mortgaged for £120,000 to a different loan company, is also excluded. Dale has not yet explained his plans for dealing with those debts.
The CVA proposal confirms that on 17 December some of the club’s trophies and memorabilia were transferred to a company owned by Dale, Bury Heritage, for £48,000 plus VAT, following an independent valuation, as has all the club’s furniture and computer equipment, for which Dale paid £20,000 plus VAT. The statement of affairs attached to the proposal states that HMRC, which issued the winding-up petition against the club, adjourned again last week, is now owed £1m in unpaid PAYE tax, national insurance and VAT, which was already £624,000 in arrears and has not been paid since February. Trade creditors are owed a further £2.4m.
The total owed to club staff in unpaid wages has not been ascertained, the proposal states. The Guardian has been told that only a small number of staff have been paid their wages for May; Dale did not respond to an inquiry about whether this is indeed the current position.
He said last week that the players, who went public after their promotion to League One in May to say they had not received wages since February, have now been paid up to March, plus half of April’s wages. The CVA proposal states that the players are still owed £406,000, with the coaching staff – the manager, Ryan Lowe, has left for Plymouth Argyle – owed £51,000. The total of £950,662 owed to football creditors also includes £131,000 owed to other clubs in transfer fees and £360,000 to agents. EFL rules require that such football creditors have to be paid in full, while HMRC and other ordinary creditors can be paid 25p in the £1 and still fulfil league requirements.
The proposal states that Dale himself will find the money necessary to finance the CVA. Such an arrangement, which results in a club not paying its creditors in full, does amount to an insolvency event according to EFL rules, and carries a 12-point penalty, likely to be imposed on Bury at the start of next season.
James Frith, the MP for Bury North, has urged Dale to sell the club and said he has spoken to two parties interested in buying it, but it is not clear if Dale plans to sell if the CVA is agreed.