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High Court dismisses Bury winding-up petition

High Court dismisses Bury winding-up petition
© Reuters
The Shakers' opening game against MK Dons has been postponed because of their financial problems.

Bury's dire financial straits eased slightly on Wednesday when the High Court dismissed a winding-up petition against the League One club for £1million in unpaid taxes.

The news was confirmed in a typically combative statement on the club's website from owner Steve Dale.

"I am pleased to advise our winding up-petition from HMRC has been dismissed today, so Bury's legacy continues in the face of adversity," he wrote.

"We hope that our ongoing talks with the English Football League will allow them to see what we are facing with saving our club and to please work with us. They are now the only thing stopping Bury's survival and we implore them to help us."

He continued by saying the club, which was promoted to League One last season after finishing second in League Two, is still "clearing hurdles" left by the previous owners but is "picking them off one by one".

Dale urged fans to get behind those working 20-hour days to save the club and stop "this slander on social media" and the protests outside his house.

"Protesting at my house again, really? Against what? Saving Bury?" he wrote.

Former Bury coach Chris Brass originally brought the winding-up petition against the club
Former Bury coach Chris Brass originally brought the winding-up petition against the club (Alistair Wilson 50/50)

"Any more of this disgraceful behaviour and photos of those concerned will be taken, names logged and lifetime bans issued."

He signed off by saying the club will go "from strength to strength" once the EFL gives them permission to start their season.

The petition was initially brought against them by former coach Chris Brass over unpaid wages but was taken over by HM Revenue and Customs after the cash-strapped club stopped paying PAYE, National Insurance and VAT in February.

But HMRC's hopes of ever seeing that full amount disappeared earlier this month when Dale agreed a company voluntary arrangement – a deal struck between insolvent companies and their creditors to pay back some of what they owe in order to start again with a clean slate.

Bury owe about £6million to creditors
Bury owe about £6million to unsecured creditors (Dave Thompson/PA)

For CVAs to be approved, they need the support of half of the total number of creditors, representing at least 75 per cent of the amount owed.

In Bury's case, they owe about £6million to unsecured creditors, including £3.6million to Dale himself, which means he is in effective control of the insolvency process.

The taxman never votes in favour of football CVAs on principle, as the game's rules give preferential treatment to 'football creditors'.

As a result of the CVA agreed by Dale on July 18, HMRC and the other unsecured creditors – usually local companies who supply food and drink, office equipment, stewards and so on – will only receive 25 per cent of what they are owed, while Bury's current and former players, coaches and other clubs will get the full £1million they are due.

A hearing on the winding-up petition had already been postponed three times since April while the club was given time to sort out its finances. And once the CVA was agreed, it was inevitable that Companies Court would dismiss the case.

Whether this will be enough for the EFL to give Bury permission to actually start their League One campaign remains to be seen.

On Monday, the league announced that the Gigg Lane club's opening fixture against MK Dons, which was scheduled for Saturday, has been postponed because it is "not satisfied" with the club's financial assurances.

This prompted a furious response from Dale on Tuesday when he accused the league of working against the club.

He also criticised the league for making "incendiary" statements and accused the media of reporting "garbage" to "incite unrest".

But the EFL's decision came after it had already extended a deadline for more information from the club from last week to Monday evening – a deadline fellow crisis-club Bolton met and have therefore been allowed to start their League One campaign on Saturday.

Bury have been given a new deadline of noon on Friday to provide the proof of funds and business plan the EFL needs, otherwise their second game, against Accrington on August 10, will also be postponed.

Both Bolton and Bury have already been given 12-point penalties to start the season for experiencing "insolvency events".

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