Rod's Clear Vision: 'Do Ya Think I'm Transparent?
I have previously given an update on where we are with the structure of the organisation and the relationship with the benefactors, but with more questions and so much misinformation in circulation I have prepared this more detailed note which summarises how we have arrived at the current position.
As secretary of the Football Supporters’ Society of Bury (FSSB) I have no vote, my role is to record discussions and decisions made and where appropriate share these with members.
My role is primarily to protect the members’ interests and if, as Secretary, I believe the society is not acting in the best interests of its members then I must remedy the situation.
As a result, these notes are intended to be a factual record of events, rather than a statement of opinion. External advice has been sought and received all the way through this process, and I will refer to this where relevant.
In summary:
The current ownership structure was agreed by all seven of the board members present. There were no objections and one person was absent due to holiday. We have acted in accordance with the external advice we sought from both our lawyers and the FSA. The facts were supported by other impartial individuals involved in discussions, including the Investment Director at Greater Manchester Combined Authority. Opportunities to discuss or comment on our previous communications have been offered to the benefactors. There is no reason the structure cannot change once the promised funds are committed, it just needs member approval. The contents of this report have all been agreed as accurate by the board of FSSB. There was very little difference in the information presented to members from the first amalgamation vote in October 2022, which did not pass, and the second vote in May 2023 which was approved. The formalities of the motions themselves were identical and all of the actions required from these motions are complete. Specifically, Bury FC Supporters’ Society members (BFCSS) were asked to approve the amalgamation of the two societies. Shakers Community Society (SCS) members were asked to approve the amalgamation of the two societies, change the playing name to Bury Football Club, and move playing venue to Gigg Lane. The differences between the two votes simply reflect that SCS owned the football club, then playing as Bury AFC, which needed member approval to change playing name and home ground. BFCSS owned a controlling interest (in that they owned the majority of voting rights) in the company which owns the stadium, called The Bury Football Club Company Limited. The other co-owner of The Bury Football Club Company Limited is Bury FC Benefactors Limited, which is the vehicle which holds the shares on behalf of the benefactors who invested in half of the cost of the acquisition of Gigg Lane, the other half funded by central government money in the form of the Community Ownership Fund, which falls under the remit of the Department for Levelling Up, Housing & Communities (DLUHC). In regard to the benefactors’ contribution to acquire Gigg Lane they have no expectation or desire to earn a financial reward.
Two other key pieces of information were noted within the documentation issued to members prior to the vote, which are pertinent to the current situation.
One was that the organisation would be restructured so that the football club would fall under the ownership of The Bury Football Club Company Limited, which would give Bury FC Benefactors Limited an equal share in the football club, albeit without voting control.
The other was that a successful vote to amalgamate would result in additional capital committed to the project. This included £300k from the two societies, £450k from Bury Council, the remaining £300k from DLUHC and around £300k from Bury FC Benefactors Limited. There is some dispute as to the exact figure which should be used for the benefactor contribution but as no monies have been committed at all so far, I do not think this point is relevant at this point. DLUHC have confirmed that around £300k of the £1m agreed is still available to draw down from their fund. Prior to the second vote SCS board members wished to evidence to its members that this money was still available. It was evident from its own finances that the society could meet its obligations. Bury Council reconfirmed their own commitment, subject to the conditions previously outlined, and DLUHC confirmed the remaining funding was still available. Understandably, it was not possible to evidence the Bury FC Benefactors Limited money was available as it had not been committed and we were advised it would not be committed unless the second amalgamation vote was successful. This was not a surprise. No additional funding has been provided from Bury FC Benefactors Limited to The Bury Football Club Company Limited other than the initial funding required to purchase the stadium in early 2021. A request for a letter of intent from benefactors was requested but not provided and it was accepted this would have no binding legal status. There was a desire from both sides to find a solution to this, as the SCS board was uncomfortable recommending the merger to members based on this level of uncertainty. The Investment Director at Greater Manchester Combined Authority, who had chaired various meetings on the second amalgamation, was asked to discuss the availability of the benefactor funding with a director and representative of Bury FC Benefactors Limited, who confirmed that the funding was available and conditional only on the merger. This information was relayed to the SCS board to provide some additional comfort and evidence that this information had been provided to a third party, not just the SCS board. We received written confirmation from that Investment Director on the 11th2023 that this conversation took place and I have copied the relevant statement below:
“At the working group meeting on 10th February, the minutes show that in order to move forwards towards a vote one of the points you (SCS) needed was confirmation that the £300k of funding from the Benefactors was still available. The minutes note that the £300k was subject to a positive outcome of the vote.”
“Further to this meeting I had a conversation with Matt Barker to understand the position with respect to the additional benefactor monies as given the status of the vote at that time, Matt had not wanted to revert to Benefactors and ask for a letter of commitment. In my conversation Matt was clear that whilst he did not feel it was the right time to go back and ask for a letter of commitment from the Benefactors, that he was comfortable that this funding was available subject to a positive vote outcome and that I could reiterate this message to you ( SCS).
In addition, the Q&As, which were approved by that same director and representative of Bury FC Benefactors Limited, and issued to members of both societies ahead of the merger vote read:
“All of the previous funding is available again should a vote go through this time. This is an instant £1.3m rising to an estimated £2.3m over time. This includes a further £300,000 from the existing benefactors. There has been no further capital invested or donated to the project since the first vote. There will be some confirmatory diligence undertaken to confirm all funds are in place as expected before the merger completes.”
It was understood, therefore, that the additional benefactor money was readily available, and subject to no conditions other than a positive amalgamation vote, given that it was to come from existing benefactors who had already committed funds. The exact source of the funds, whether it be new or existing benefactors is not material, other than by stating the money could come from existing benefactors it gave the SCS board far more confidence it would be made available.
Bury Council were also concerned to establish that this funding was available. The terms of their own funding which are detailed in their cabinet paper of 13th June 2022 states:
“The business plan includes a commitment of £1m from private benefactors of which £730k has been invested to date. The balance of £270k will be invested if the merger discussions are successful and will be used as match funding, alongside the Bury Council funding, to release the balancing £300k of grant from the Community Ownership Fund.”
The business plan originally submitted included additional funding from Bury FC Benefactor Limited.
We were advised that there were no available Bury FC Benefactor Limited funds after voting had closed. There was no immediate financial pressure caused by this situation, however once it became apparent that the money would not be committed a discussion amongst the FSSB board members was held at a board meeting on firstly the 4th July 2023 ( where seven board members were present) and later on the 18th July 2023 ( where seven board members were present) ) about the next steps.
At the meeting on the 4th July 2023 the relevant minute confirms that:
‘It was agreed by all that it would be wrong to transfer Bury Football Club (2019) Ltd to The Bury
Football Club Company Ltd as the financial diligence has not been completed and Bury FC Benefactors Ltd have not provided an additional £300k into that company as set out in the original merger proposal.’
It was also agreed at the meeting on the 4th July 2023 that:
“advice from Anthony Collins Solicitors LLP would be sought (should these funds be made available in future) about whether a member vote would be required. Bury Football Club (2019) Ltd trading as Bury Football Club would remain a wholly owned subsidiary of the Football Supporters’ Society of Bury’
A course of action was agreed at board meeting on the 18th July 2023 attended by seven of the eight board members. All seven voted in favour of this and the relevant minute is copied below.
“MB has confirmed there is £240k outstanding from the Benefactors who want a meeting to discuss. We can arrange a meeting but even with this figure there seems to be a £60k downfall. Benefactors feel £760k has been paid in to date. JW said there was an understanding that there would be £1mil of funding from existing benefactors at the time of the vote amongst members. MB spoke to PY prior to vote results being announced to say that additional benefactor funding would not immediately be available. DT raised that current position of the benefactors suggest that they do not or are unwilling to immediately invest existing funds. MB has stated that the current position is ‘uninvestible’ KL says we’re currently in transition period. Deadline has been given until the end of the month for the benefactors to provide additional funds but keen that all avenues should still be explored with the benefactors to resolve the matter. PY agreed that the deadline was sensible and then we can draw a line under it and decide on a new way forward. PY happy to meet to discuss with benefactors as requested along with other Interim Board members. . Meeting to be facilitated in forthcoming weeks between Benefactors and IB members, Face to Face is going to be more difficult due to geographical and proximity issues involved of IB members and benefactors. KL suggested that a minute taker be present and a second set of eyes and ears. ACTION: Meeting to be arranged between Benefactors and IB members to discuss this current impasse. Remote meeting would be most suitable.”
The legal opinion, obtained from a mutual law expert at the firm who had advised us throughout the amalgamation process confirmed this course of action. In particular, it re-iterated that in the absence of any binding legal agreement on the matter the society could not force benefactors individually or collectively to pay the outstanding amount, nor could the benefactors force transfer of the football cub ownership. Given that this would effectively be transferring half of the ownership of the football club for no financial contribution it was clear this would not be in the interests of the society, which may wish to accept investment into the football club at a future date, subject to member vote.
We were advised to provide a deadline date of seven or fourteen days to Bury FC Benefactors
Limited for the investment to allow another opportunity for investment and gave a deadline of the 31st July 2023. It was confirmed that the outstanding monies would not be paid, and the matter closed. We had also advised further investment could be made, along with changes to the ownership structure but this would be subject to another consultation and member vote, as the terms of the previous agreement had expired. Again, this was in accordance with the legal advice we received and also the advice received from the Football Supporters Association (FSA) who had been involved throughout.
It was expected that the benefactors would not agree with this, as they still believe the football club ownership should be transferred without any additional financial contribution from Bury FC Benefactors Limited. The dispute between board members of FSSB occurred when it was suggested that this situation be disclosed to members. The board was equally split on this issue and we did not have a majority vote to disclose the information to members. The statement which was eventually released and can be seen here, and is repeated below, had been passed to the board of Bury FC Benefactors Limited for comment on the 1st August 2023 and we had received no comment on it other than that it had been received and they were not in agreement with its release. By the 6th August 2023 we had still received no comment on it, and I, acting as Secretary, took advice from the FSA on my obligations as I felt it was something FSSB members should be informed of given we had been asked about funding by some members, questions had been raised about the football club ownership and it was pertinent to the amalgamation vote which was a hugely significant event for members of both societies. It was issued to members by email on the 7th August 2023 at 6.00pm and is reproduced below.
Update from The Secretary of the Football Supporters' Society of Bury
We have completed the amalgamation of the two societies, the name change to Bury Football Club and made Gigg Lane our home ground, which were the three items voted on by members in May.
We also advised as part of the pre-vote information pack that we would move the ownership of the football club, which is Bury Football Club (2019) Ltd trading as Bury Football Club, under the ownership of The Bury Football Club Company Limited, subject to further financial due diligence. We have been advised by Bury FC Benefactors Ltd that at this stage they will not be investing the further £300, 000 they had committed to in the business plan presented to members. This does not place the stadium or club in any significant jeopardy as we are still able to access both central and local government funding in addition to holding our own cash reserves.
There is no obligation on Bury FC Benefactors Ltd to invest this money, and we will continue to work with them as normal. Equally there is no requirement for the Football Supporters’ Society of Bury to make any changes to the ownership of the club, and so it will remain 100% owned by the Society, and separate from The Bury Football Club Company Limited, which the Society co-owns with Bury FC Benefactors Ltd. The Football Supporters’ Society of Bury also owns the majority of voting rights in The Bury Football Club Company Limited, so should not be prejudiced in any way by keeping the organisational structure in its current format.
Should any party, including Bury FC Benefactors Ltd, wish to invest into either Bury Football Club (2019) Ltd or The Bury Football Club Company Limited at a future date they may do so by an approach to the board of the Football Supporters’ Society of Bury, who can take this forward to member consultation and a member vote if they believe it is a credible offer in the best interests of the club and the society.
There are some significant legal and tax issues to consider as part of any transaction like this, in addition to the need for member approval, and so it is unlikely that any offer could be agreed and put forward for a vote quickly or without professional advice.
Rod Peters
Secretary to the Interim Board
