Bury’s financial crisis deepens under pressure from £ 4.2million loan | Bury
Bury, already in the throes of a financial crisis, faces further pressure to repay £ 4.2million in loans from their former owner’s property company, which collapsed under administration due to a sum similar to creditors.
The loan was recorded in Bury’s latest published accounts, for the year as of May 31, 2017, of Mederco Ltd, a company which has built student accommodation in Bradford and is owned by Stewart Day. Mederco investor Warren Harding, who bought one of 160 Bradford block units sold with a five-year rental guarantee, told The Guardian he and other tenants each owed more than £ 7,000. He said a large group of creditors had appointed a lawyer to verify whether the investors’ money had indeed been loaned to Bury and to seek repayment.
“As we were not paid the rent due on the properties we purchased from the Stewart Day Company, we were surprised to see that the Company had made a £ 4.2million loan to the Club of Bury football, ”Harding said. “We can’t wait to see this continued and see if we can get the money back.”
Mederco directors Phil Deyes and Julien Irving of Leonard Curtis, said in their official report on the company’s insolvency in March that they asked Mederco’s accountant to provide financial information on the loan to Bury. The report estimated that Harding and the other tenants in the Bradford Block owed £ 1.1million, £ 605,000 owed to HMRC in taxes, and creditors owed £ 4million in total.
Day, who took over Bury in a previous financial crisis in 2013, suddenly announced in December that he was selling his shares to a new owner, Steve Dale, saying he was leaving the club “in a stronger position than he was not when I arrived ”and wanted to spend more time with his family. Mederco’s directors report revealed that by that time the company had already received a request for liquidation from HMRC and they considered it insolvent; he took office in January. Several other Day real estate companies also fell under administration.
Dale, who has been at the center of anger among Bury supporters in particular since last week when the players went public that they had not been paid since February, said he was trying to save the club liquidation and was open to offers to sell. .
Promoted to League One last month, Bury has a series of loans from a company, Capital Bridging Finance Solutions, taken out during Day’s tenure at the club, which Dale says now total £ 3.7million and carry interest of almost £ 1,500 per day. In 2014, one of Day’s companies took out a £ 1million loan, guaranteed by the football club and guaranteed on Gigg Lane, at 10% interest per month, a cumulative amount of 138% per year. This loan is recorded as having been satisfied and new loans have subsequently been taken out, guaranteed on Gigg Lane, including the current one.
Bury faces a June 19 liquidation petition led by HMRC – Dale said the unpaid tax bill now stands at £ 800,000 and debts total £ 8million. Dale, who is used to taking over insolvent companies and making money selling their assets, said the club had not had any communication with Leonard Curtis about the Mederco loan. He said he believed Day was only leaving personal loans with the club, which were effectively written off when Day sold the club to Dale for £ 1.
Dale said he aimed to agree a loan settlement on Gigg Lane, then he could transfer the stadium to a company he formed, Bury Leisure Ltd, and the club could pay rent for there. play until refunded. Some of the club’s trophies and memorabilia were transferred to another new Dale company, Bury Heritage; Dale denied that it was a dismemberment of assets and declared that it was for the purposes of safeguard, because the judicial officers were seeking to take them back on behalf of the creditors.
He has publicly stated that he is considering laying off staff, who have also had to wait for their pay. His goal, he said, was to reach a settlement with the other creditors as well, which would allow Bury to survive the liquidation petition. “I didn’t create the mess,” he said, “although it did build up and got worse while I was there. It’s like being stuck in the dam; you only have a limited number of fingers to put in the holes.