21st August 2019

Why fixture cancellations threaten integrity of League One

The English Football League (EFL) has warned that the integrity of its League One could be damaged by two clubs under seven miles apart that have cancelled fixtures due to ongoing financial issues. On 19 August, Bolton Wanderers announced that it would not be able to fulfil its 20 August fixture against Doncaster Rovers due to concerns over the welfare of its young players. Neighbour Bury FC, which has also cancelled a number of fixtures, has been threatened with expulsion from League One. 

Both clubs began the 2019/20 season with a 12 point deduction for entering a Company Voluntary Arrangement (CVA), as per Article 12.3.1 of the EFL Regulations. Bolton has played three games and postponed one, while Bury has failed to play a single fixture. Bury has been threatened with expulsion from League One unless Chairman Steven Dale provides information to the EFL on how he intends to fund the club going forward by 23 August. 

Both clubs are also subject to a transfer embargo, which compounds their problems by preventing them from signing new players. Due to senior squad injuries, Bolton was only able to field three senior squad players for its 5-0 loss to Tranmere Rovers on 17 August.

‘With so many senior players injured or unavailable, the squad has performed heroically and deserves so much credit’, read a statement from Bolton’s administrators, which have been financially managing the club since May in order to save it from liquidation. ‘But after consultation with the club’s medical staff as well as both academy and senior football management, it is obvious that to call on them for another match without an adequate break would be detrimental to both their welfare and development which cannot be allowed’.

‘The EFL understands the challenging position the Club currently finds itself in whilst negotiations continue over its purchase’, read an EFL statement. ‘However, it would have expected the Club to have first interfaced with the EFL, giving it an opportunity to consider the application to postpone, and consulted with the Club’s opposition, Doncaster Rovers before making a public announcement. The EFL remains acutely aware of the ongoing risks this challenging and complex situation has to the integrity of the competition.’

The EFL has also threatened neighbouring Bury FC with expulsion from League One, after being forced to suspend its 24 August match against Tranmere Rovers. ‘The EFL Board continues to be frustrated at the lack of significant progress that has been made by Mr Dale in providing the information required’, read an EFL statement. ‘However, we will continue to work with the current ownership in an attempt to achieve a resolution ahead of the Notice of Withdrawal deadline of Friday 23 August.

‘It remains in regular communication with Mr Dale but if a solution is not found by the deadline, the Board will authorise the necessary share transfer on behalf of Bury FC which shall be legally binding on all parties and result, regretfully, in the Club no longer being a member of the League. Should this happen, Bury’s record from the 2019/20 season would be expunged with League One consisting of 23 Clubs for the remainder of the campaign and the number of relegation places reduced to three at the conclusion of 2019/20 season. Four promotion places would remain from League Two ensuring a full complement of 24 teams in League One in 2020/21.’

Bolton’s issues

In a 17 July statement, Bolton’s players and coaching staff argued that they had not been paid in 20 weeks. Bolton’s administrators argued that the statement was ‘riddled with factual inaccuracies’ without pointing out what those inaccuracies were. It did not dispute that players hadn’t been paid, but said that they would be, in full, as soon as a deal to sell the club has been agreed. Under the Football Creditors Rule, clubs entering a CVA are only required to pay debts to football in full.

‘As football creditors, Phil [Parkinson, Bolton’s Manager], his staff and the players will get paid in full once the deal has been completed’, read a statement of reply from Bolton’s administrators. ‘This is in contrast to other creditors, who will receive nothing approaching that level of compensation’.

‘We have reached a stage in the deal to sell the club to Football Ventures and are working tirelessly to complete the transaction’, continued the statement. ‘One outstanding element of the deal, which is not under my control, is the sale of Whites Hotel. Football Ventures’ ownership model, one supported by the EFL, is based on a deal for both the club and hotel.’

However, two Directors have recently resigned from Football Ventures, according to filings at Companies House. Parminder Basran resigned on 16 July, and Jeff Thomas’s position as a Director was terminated on 6 August. As such, there are doubts as to whether the deal will go through.

Bury’s issues

Steven Dale took over as the new owner of Bury FC in December last year. A club statement described him as a ‘very successful businessman’. He is still listed as a Director of Terrapin Limited, which has overdue accounts, according to Companies House. His history shows himself as the sole Director of CJD Hollingworth Ltd., a property management company incorporated on Christmas Eve last year. He has also been a Director of eight companies that have been dissolved, five of which have the same address and postcode. 

One of the companies, Old Market Tavern Limited, was set up via Dale buying £1,000 in share capital and was dissolved via Compulsory Strike Off (i.e. for failure to file accounts or pay tax) less than six months after incorporation. The company shares its name and address with a popular historic pub that was sold in November last year to an undisclosed buyer. There is no suggestion that Dale was that buyer or was involved, and the dissolution of Old Market Tavern Limited may suggest that he reconsidered a plan to buy the pub.

In an interview (audio below or click here to open in new window) on TalkSport, Dale disputed accusations from his players that he had failed to pay them. It is understood that he has refused an offer to sell the club to new owners.

Local MP James Frith has written to Debbie Jevans, Executive Chair of the EFL, asking her to postpone Friday’s deadline for Dale to provide the required information. ‘Interested parties tell me they are still awaiting vital information from the owner in order to compile a credible bid’, he writes. ‘The EFL’s intervention at this point in terms for an extension can prevent Bury FC from its outgoing owner, maintain its membership in the League and remove the threat to all your other members whilst this remains unresolved’.

Frith’s letter also states that his insight into ‘financial dealings at the club’ have revealed:

• Lending agreements that have seen ‘close to 50% of the principal sum’ being paid as an ‘introductory fee’ to unnamed third parties, yet being required to be repaid as part of the loan agreement to Bury FC;
• The inclusion in the CVA of a £7 million debt to RCR Holdings, a company incorporated on 16 July this year, with just £100 of share capital.

‘This date of incorporation was just two days before the CVA was passed (on the 18th of July), which RCR Holdings played a significant role in facilitating the passing of, due to the size of their debt’, writes Frith (full letter below). ‘In my eyes, this raises serious questions about the relationship between Mederco (and their administrators), RCR Holdings and the current owner, which I believe require time to be investigated by both yourselves and any prospective buyers’. Stewart Day, Bury FC’s former owner, is listed as a Director of Mederco, which entered administration in March, with over £27 million understood to be owed to creditors.

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