The December takeover of Bury, who are in extreme financial distress under the owner Steve Dale, was completed without being approved by the EFL under its regulations, the league has said.
Dale took the club over for £1 from Stewart Day, who had taken out loans secured on its Gigg Lane ground and run the club at a loss, and whose property development companies were about to collapse into administration.
Under rules introduced after the serial financial collapse of clubs, including Bury, in the early 2000s, the EFL must be satisfied that a prospective new owner is “fit and proper” under its owners’ and directors’ test, and has enough money, from a legitimate source, to fund the club.
In normal takeovers a prospective buyer is notified to the EFL in advance for these checks, including on the “source and sufficiency of funds”, and the league will block a takeover if it is not satisfied that the money is there. The EFL regulations state that “up to date future financial information” must be submitted by a club “as far in advance of the change of control as reasonably possible” or, if that is not reasonably practicable, within 10 working days after the takeover.
Dale, however, did not undergo any part of that process before his takeover and even now, seven months into his ownership of Bury, he has still not provided the EFL with information it requires to be satisfied that he has the money to fund the club.
In a statement an EFL spokesman said it began to conduct the checks required by the regulations only after Dale took the club over from Day: “Following notification of the transfer of shares at the club, the EFL immediately began to implement its change of control processes, which include submission to the owners and directors test … as well as seeking additional information in regard to the source and sufficiency of funding.”
The spokesman also confirmed that Dale and Bury had still not provided the EFL with the necessary financial information: “We remain in active dialogue with the club concerning the outstanding information as required under EFL regulations, and will continue to offer assistance as the club attempts to find a long-term solution to the complex and challenging issues it currently faces.”
Bury are understood to have been placed under an embargo on registering new players, until the EFL has been convinced the money is there to pay them. The manager, Ryan Lowe, left, along with several players who won promotion for the club from League Two last season despite not having been paid, at that time, for 12 weeks. It is not clear what squad the new appointment, Paul Wilkinson, will have to start the season.
On Thursday several employees at the club were sent letters terminating their employment, with an official explanation that “the company has become insolvent and is unable to pay their debts”. Samantha Gibbs, who was recruited as recently as last September to be Bury’s venue operations director, said that staff had not been paid for May or June and will be “financially ruined”. She said: “Nobody is saying that Steve Dale put the club into debt but the club has been in chaos since his takeover.”
Last month Dale made an offer to settle 25p in the pound of the club’s non-football and unsecured debts – HMRC was owed £1m at that point – but the creditors’ voluntary arrangement (CVA) proposal was adjourned this week. The administrators of Mederco, one of Day’s collapsed property companies, has claimed since the proposal was made that it is owed approximately £7m in loans made to Bury while Day owned the club.
James Frith, the MP for Bury North, told the Guardian: “I am dismayed to learn that Bury’s current owner may not have passed through the ownership regulations which the EFL are supposed to administer prior to any completed takeover. All Bury FC fans will want to know, as I do, what on earth these rules are for.”
Dale had not responded to a series of questions from the Guardian at the time of writing.