UPDATE 25/10/2021
A year on from being placed into administration and we hear there is a chance of rescue for Bury FC.
According to latest news, a group of Bury FC supporters, called Est 1885, has struck a deal to purchase the club and Gigg Lane from administrators – and this has been accepted, meaning they could get keys to the stadium as early as December.
Included in the deal is the intellectual property of the club; assets, history and trading name.
The fan group hope that this can save the club, and bring them into a position ready to start the 2022-23 season, after three years of not playing football.
UPDATE 30/10/2019
Two weeks ago, Bury FC hit the news for being presented a Winding Up Petition.
Today, lawyers for the club have told the court that an extension is required to investigate if too much tax was paid by the club to HMRC. The case has therefore been adjourned until December 4th.
Despite an extension being granted, plans are being put in place for a phoneix club to be created, if liquidation does occur. The new club would need to apply to the Football Association for entry at the non-league level of the pyramid.
Bury FC face a Winding up Petition today at the companies court. It is understood to have been presented by former assistant boss Chris Brass, who is claimed to be a creditor. This is the second winding up petition to have been served on the club in the last year. HMRC launched a claim for an undisclosed amount but the debt was understood to have been paid and the petition was dismissed. It was said at the time that the club was facing financial pressures and was working through them.
Yesterday, the club issued a statement confirming it was experiencing “internal financial restrictions” and that this had been discussed with players and staff.
Readers Guide To the Administration Process
As Bury nearly went into formal insolvency, stakeholders often face significant uncertainty. Here is a breakdown of the legal framework and what it means for those affected.
1. What is a “Basic” Administration?
Administration is a powerful statutory process governed by the Insolvency Act 1986. It is triggered when a company is insolvent and can no longer meet its debts. An independent Licensed Insolvency Practitioner (IP) is appointed to take control from the directors. A key feature is the statutory moratorium—a legal “shield” that instantly stops all legal actions, such as winding-up petitions or bailiff visits, providing the “breathing space” needed to rescue the business or achieve a better result for creditors than immediate closure.
2. Who Gets Paid First?
The law dictates a strict hierarchy for the distribution of funds. Fixed charge holders (typically banks with security over property) are paid first. Once the administrator’s fees are covered, preferential creditors are next; this includes employees (for specific arrears) and HMRC for taxes like VAT and PAYE. Following these are floating charge holders, and finally, unsecured creditors—which include trade suppliers and customers—who are at the back of the queue and frequently receive only a small fraction of their debt.
3. What Happens to Employees?
Entering administration does not mean all jobs are instantly lost. For the first 14 days, the administrator assesses the company’s viability and may make redundancies. If a member of staff is kept on past this 14-day window, the administrator “adopts” their contract, meaning their ongoing wages and rights become a priority expense. Those made redundant can claim for unpaid wages and notice pay via the Redundancy Payments Service if the company has insufficient assets to cover these costs.
4. What About Suppliers and Customers?
Suppliers and customers are generally unsecured creditors. Suppliers should stop granting credit under old agreements and negotiate “pro-forma” (upfront) terms for any new supply to the administrator. For customers, deposits and gift cards are rarely honoured. However, those who paid over £100 via credit card may be protected under Section 75 of the Consumer Credit Act and should contact their bank immediately to initiate a claim.
