TThe newly confident Bury Football Club knocked out Hemel Hempstead 3-1 in the FA Cup first round on Sunday and, despite losing to Tranmere Rovers in the Johnstone’s Paint Trophy quarter-finals on Tuesday night, he made a terrific start to the game. . League 2 season, a transformation in the club’s fortunes since the arrival of new owners last summer.
Under Stewart Day, a 33-year-old real estate developer from Burnley, and his colleague, Glenn Thomas, Bury reorganized the pitch at Gigg Lane and stocked manager David Flitcroft with new signings including lower division quality trio Ryan Lowe of Tranmere, Nicky Adams of Rotherham United and Danny Mayor of Sheffield on Wednesday to become real contenders for the promotion.
But these happy days are tempered by memories, still raw, of the administration in 2001. This crisis of over-indebtedness was followed by promises that despite the club still struggling in the shadow of Manchester, the administrators would never play with it again. Bury’s future. The trauma was precipitated by a £ 1million loan secured on Gigg Lane at 15% annual interest which the club had deemed excessive and which court documents described as ‘a true loan of last resort’.
Yet public documents from Companies House show that since Bury’s takeover Day’s company has borrowed the exact same amount, £ 1million, also secured on Gigg Lane, but at an exponentially higher interest rate. : 10% per month. This is a cumulative annual rate of 138%, which means that after one year, £ 1million borrowed in August will amount, with interest, to £ 2.38million payable. The Bury Football Club itself, formed in 1885 at the dawn of professional football and members of the Football League for 120 years, guaranteed this high interest loan of £ 1million.
It was acquired by Day’s company SG Sports Management Limited of Rainbow House, Burnley on August 11. By then SG Sports Management had already borrowed £ 450,000, at the same interest rate, 10% per month, from a company called, somewhat promisingly, Cash4Assets Limited. Day’s company borrowed from this company twice: £ 200,000 on May 14, around the time the club signed Lowe, Adams and Mayor, then £ 250,000 less than a month later on June 9 .
Bury FC guaranteed these two loans; the guarantee is indicated in the mortgages as being “a first legal charge… on the freehold ownership of the football field and stadium in Bury, Gigg Lane”.
Just two months later, on August 11, SG Sports Management borrowed £ 1million from Goldmann and Sons Limited, a single-shareholder company officially classified as ‘dormant’. The loan included the £ 450,000 already borrowed from Cash4Assets, plus an additional £ 550,000, to make £ 1million. Like the previous two, this loan was indicated at one month, at an interest rate of 7.5% if the entire loan was repaid in the month, then, otherwise, at 10% per month. As the mortgage is still registered against Bury and Gigg Lane, it appears that it was not paid off immediately, so interest is £ 100,000 for the first month and then 10% per month of the loan in Classes ; 138% per year.
In October 2013, SG Sports Management took out a mortgage, for unspecified loans, with another company, Datum Finance Ltd, registered in Burnley. The agreement provides that SG Sports Management would in turn lend money to Bury and Datum would have a mortgage on this loan.
Bury’s most recent accounts cover the year up to May 31, 2013, before Day’s ownership, when the club had an income of £ 2.7million but suffered a loss of £ 724,688. Principal owner Brian Fenton, a man and local fan, called the clock after loaning £ 191,043 to fund the club’s losses and the club faced yet another financial crisis before Day stepped in.
Listeners said Bury’s directors considered the club to have only “sufficient resources to continue to exist for the foreseeable future” as Day’s company made available “a revolving credit facility of up to £ 2million. sterling”. SG Sports Management had previously loaned the club £ 335,000; the accounts do not say what the interest rate was.
After the 2001 crash, Bury was saved from ruin by thousands of donations from people across the country and even overseas who did not want a venerable English football club to fold. In return, the names of the donors have been affixed to the backs of the Gigg Lane seats and the old field still has them, a testament to this generosity.
Stuart Cook, spokesperson for a concerned group of small Bury shareholders, said: “We are long-time fans whose parents and grandparents have dated Gigg Lane; we want a club that performs well but is based on sustainable spending. While last year’s improvements are encouraging, we’re concerned that the expense appears to come from money borrowed against the ground, at a very high cost. There is a lack of transparency and accountability that would give us assurance on this subject. “
A club statement when Day took over said, “The new board will bring in key people to help bring in new ideas and new business models to ensure financial security.”
The Guardian sent detailed questions to Day via the club, mainly asking where his company’s £ 2million credit facility came from at the club, whether the borrowed money had been used to fund player signings, what is the club’s current payroll and what plan they need to ensure that 10% per month, 138% per annum interest can be achieved. He did not answer.