Bury: EFL warns club could be expelled if financial assurances are not provided

Bury's Gigg Lane
Bury are scheduled to begin their 2019-20 League One campaign by playing MK Dons on 3 August

Bury could potentially be expelled from the English Football League in two weeks' time if they do not provide proof of their financial viability.

A company voluntary arrangement (CVA) to settle some of the club's debts was approved by creditors on 18 July.

The EFL is still awaiting details of how the terms of the CVA will be met.

If they are not provided by Thursday, the EFL board could give Bury 14 days' notice to give the required assurances or have their membership terminated.

The board could also decide to extend the deadline and give Bury more time before implementing the notice.

An EFL spokesman said: "The EFL Board will meet in the next 24 hours to consider the various matters in respect of Bury FC following the expiry of today's deadline imposed on the club in regard to the outstanding information required by the EFL. A further update will be issued following the conclusion of that meeting."

In addition, an EFL statement said it had requested the information - which includes the "means of payment of outstanding football creditor debts" and "source and sufficiency of funding" - on several occasions.

If the Shakers do provide the relevant details by Thursday's deadline, the EFL said it will "commence negotiations with the club to enter into a membership agreement, which will incorporate the ongoing conditions for continued membership in the league and ensure the terms of the CVA are met".

BBC Radio Manchester has contacted Bury for comment.

The Shakers, promoted from League Two last season, will start in League One next season on -12 points as a CVA qualifies as an insolvency event under EFL rules.

Meanwhile, the local Safety Advisory Group (SAG) are meeting on Thursday to decide whether the club meets the requirements to safely stage fixtures at Gigg Lane next season.

The EFL has the ability to suspend the club's fixtures should the SAG confirm the club cannot provide evidence it can hold the opening fixtures of the season.

What is a Company Voluntary Arrangement?

An insolvent company can use a Company Voluntary Arrangement to pay its creditors over a fixed period and, if they agree, the company can continue to trade.

The company needs to apply for its CVA through an insolvency practitioner who, within a month of their appointment, will work out an arrangement to cover how much of the debt it can pay, as well as a payment schedule.

The creditors will then be invited to vote on the arrangement, however, the proposal must be approved by creditors who are owed at least 75% of the debt.

If 75% of creditors cannot agree on the arrangement, the company could face voluntary liquidation.

However, Bury's CVA - which will see football creditors paid in full and unsecured creditors paid 25% of the money they are owed - was eventually approved.

Their points deduction means Bury join local rivals Bolton Wanderers in also starting the season on -12 points after they entered administration in May.

Bury are due to reappear in the High Court on 31 July after a winding-up petition taken on by HM Revenue & Customs over an unpaid tax bill was adjourned in June for a third time.

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