The problems actually go back five years or more. They were spending money they did not have in 2015 when they won promotion under Flitcroft.
That's not quite correct RLC. All creditors have agreed (well a majority of creditors by total amount owed anyhow) have agreed to accept a 75% haircut so they will get 25p in the pound on their debts. Re local companies that may well be the case but the alternative was likely administration/ insolvency when they for sure would get next to nothing. HMRC also are covered by this CVA so the much adjourned court case will fall away.
If the club was declared insolvent and all assets disposed of, the creditors would get more than 25% (at least, any creditors that were secured). The courts always seem to treat football clubs as 'special cases' in situations like this, whereas any commercial enterprise would simply be liquidated in the same circumstances.
The problem with that RLC is that the secured creditors are in fact a company which in itself is in liquidation (Bury's previous Owner) so the chances of Bury's local creditors getting anything in an insolvency is likely zero. As far as I am aware the only difference between a football club and "ordinary" businesses are that football creditors ie players and staff are due 100% and do not take a hit. Liquidators have a legal obligation to do best for all creditors but yes I agree that local interest groups/ councils etc. seem to generate a lot of headlines to pressure survival. My mate who is a Bury fan could go on forever about how badly the club has been run. For anyone interested the attached is a decent summary of the shenanigans!!
I think there is a social pressure on insolvency practitioners and creditors not to put football clubs out of business, whereas they would be more ruthless in dealing with private trading companies in the same circumstances. It will take several clubs going bust to change the behaviour of directors, otherwise there is no incentive for them to behave responsibly.The problem with that RLC is that the secured creditors are in fact a company which in itself is in liquidation (Bury's previous Owner) so the chances of Bury's local creditors getting anything in an insolvency is likely zero. As far as I am aware the only difference between a football club and "ordinary" businesses are that football creditors ie players and staff are due 100% and do not take a hit. Liquidators have a legal obligation to do best for all creditors but yes I agree that local interest groups/ councils etc. seem to generate a lot of headlines to pressure survival. My mate who is a Bury fan could go on forever about how badly the club has been run. For anyone interested the attached is a decent summary of the shenanigans!!
Bury financial crisis deepens amid pressure over £4.2m loan
Bury are facing pressure for the repayment of £4.2m in loans from their former owner’s property company, which has collapsed into administration owing a similar sum to creditorswww.theguardian.com
Supporters of all clubs can have an influence over how their club is run, or at least draw attention to unscrupulous owners - look at Blackpool for example - but there have been no attempts by Bury supporters to challenge their owners until now, when it is far too late. Not only that, but the Bury fans were happy to celebrate a second fraudulent promotion at PP a few weeks ago when we, and they, knew it was illegitimate. More broadly, clubs that behave as recklessly as they have need to be punished or there is no disincentive for other owners to do the same. The financial malpractice at Bury was first highlighted in the national press five years ago but their supporter groups were completely silent on the matter, because they had success in the short term.
