Bury Beware: lessons on the importance of good governance from Bury F.C.’s football league expulsion
“Caveat emptor” (buyer beware) seems rather paradoxical when observing the plight of Bury F.C.
In August, Bury F.C. became the first club since Maidstone United in 1992 to be expelled from the English Football League (EFL). The 125-year old club was facing severe financial difficulties as far back as 2013, when it was bought by Stewart Day and saved from bankruptcy. Its debts were mounting in late 2018 when Day sold the club to Steve Dale for £11.
The club then faced a winding-up petition, adjourned three times, which was dismissed2 by the High Court in July 2019. Bury’s creditors then approved a company voluntary agreement (CVA) that intended to settle some of their debts but left “non-football” creditors (including HMRC) only 25 per cent of what they were owed. In EFL Regulations, a CVA is a qualifying insolvency event; the league accordingly imposed a 12-point penalty3 on Bury and cancelled six fixtures.
On 8 August, the EFL gave Bury a 14-day “do or die”4 deadline to come up with a plan to repay outstanding creditors or be expelled. Despite initially failing to do so, and after Manchester Mayor Andy Burnham and Bury North MP James Frith implored the league for an extension, Dale brokered a deal with C&N Sporting Risk for the sale of the club. This deal, nonetheless, collapsed.
The EFL expelled Bury F.C.5 from the league on 27 August 2019. HMRC has since brought a winding-up petition against the club on 16 October that has been adjourned for two weeks, allowing Bury breathing space to settle with small business creditors. The EFL rejected a proposal for Bury to re-enter League Two in the 2020-21 season.
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- Tags: Corporate | English Football League (EFL) | Football | Governance | Involvency | Regulation | UK
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Written by
Tom Bruce
Partner and Deputy-Head of Sports - Farrer & Co
Tom is an experienced sports lawyer known for his personable approach and outstanding client service.
Tom is embedded in the sports sector and works closely with sports clients on a wide range of corporate, commercial and governance matters. He advises Governing Bodies, commercial sports organisations and clubs and is a "go-to" adviser for a number of high profile clients on governance matters (including the Code for Sports Governance), joint ventures and structuring international sporting events.
Jack Verdan
Jack completed a vacation scheme with Farrer & Co in 2016. Prior to joining the firm, he worked for a financial communications consultancy. Jack studied History at Newcastle University, before completing the GDL and LPC at BPP Law School in London.