David Conn: Bury's begging bowl may not avert closure

Club formed in 1885 and twice FA Cup winners likely to face Gigg Lane repossession order in two weeks if £1.35m debt is not paid
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English football is slowly coming to terms with the black hole it has dug for itself during the boom years, but the grim, almost seedy details still have the power to shock.

Bury Football Club, 117 years old, formerly solid inhabitants of the Football League, face closure in two weeks following a calamitous saga involving fraudsters, struck-off solicitors, money-lenders and impossible debts – the football equivalent of a Ken Loach film.

When Terry Robinson, Bury's full-time chairman and chief executive, left last month he said that a company, Mansport Developments, was about to sign a deal to take the club over. Robinson was subsequently appointed full-time "football executive" at Sheffield United. In the event the Mansport deal was never signed and two people involved with the company were exposed last week as convicted fraudsters.

Bury face court proceedings on 4 March by a firm owed £1.35m, secured on the club's historic Gigg Lane ground, which could be repossessed and sold to developers. Interest on the mortgage is running at £984 daily. The current directors, local men John Smith and Fred Mason, have appealed to the town's wealthy people to bail out the club, but there are no known offers. The player-manager, Andy Preece, has also called on the rest of football, wallowing in television millions from BSkyB, to help.

"We are exploring every possible avenue," said Smith. "This crisis threatens the survival of a football club in this town. We appeal to everybody to help."

This is a sorry state for a club with Bury's history. Formed by local Wesleyans and Unitarians in 1885, the club have provided some moments of cheer in the Lancashire town famous for mills and Methodism. The Shakers joined the Second Division in 1894, were immediately promoted and played in the First until 1912. They won the FA Cup in 1900 – before their neighbours Newton Heath changed their name to Manchester United – and again in 1903, beating Derby 6-0, still the most emphatic ever Cup final victory.

As the Manchester and Merseyside clubs burgeoned, Bury settled for respectable lower division status, and have been most noted in recent times for nurturing the Manchester City legend Colin Bell, the Everton goalkeeper Neville Southall, and a famously lush pitch. Now the cry has gone out for millionaires, but Bury's modern troubles stem from just such a character, Hugh Eaves, who emerged in the late 1980s as the saviour of which small clubs dream.

Eaves was a Hampstead stockbroker, a partner in Philips & Drew, which sold out to UBS for £50m in 1985. One of his few apparent passions was Bury FC, whom he had always supported, and he took over the club and poured money in, £4m in total. Bury's successive promotions from the Third to the First Division in 1996 and 1997 under their then manager, Stan Ternent, with players such as Dean Kiely, Paul Butler and David Johnson, were bankrolled by Eaves. Bury also strengthened ties with Manchester United – Jill Neville, mother of United's full-back brothers Gary and Phil, works at Bury and until recently Neville Neville, their father, was the commercial director. United play their reserve matches at Gigg Lane, paying around £2,500 a time to do so. The rugby league club Swinton, who had been taken over by Eaves, also moved to Gigg Lane where they, too, play their home matches. Eaves is still registered as a Swinton director.

The wheels came off the Eaves gravy train in 1999, when he wrote to his former partners confessing that he had lost large sums of money from the proceeds of the sale to UBS, which he was managing. He said he was desperate and was last publicly heard of in the Far East – although John Smith said he had seen him at Gigg Lane around a year ago.

A firm of London solicitors, Ashurst Morris Crisp, sued on behalf of Eaves' former partners and is acting to recover the money, including £750,000 outstanding from Bury. Any takeover deals have to be agreed with the firm.

Lloyds TSB, which had a mortgage on Gigg Lane, became, according to court documents, "extremely nervous of their position". Bury turned in desperation for a loan from a Sheffield solicitor, Richard Prentis, who was running a scheme inviting the public to invest for a guaranteed annual return of 15 per cent on "fully secured loans". In May 2000, Prentis advanced Bury a 12-month loan of £1m, secured on Gigg Lane.

Mason, who was a Bury director then, said: "It was done to get through the summer and get the ground development finished. Then we thought we might sell a player or the club itself and pay them back."

Two weeks later, Prentis's firm was closed down by the Law Society, which said that his "collective investment schemes" could not be legally operated. Last year Prentis was struck off by the Law Society.

The club, though, have not repaid any of the money. Another firm, Russell-Cooke, Potter & Chapman, was entrusted by the High Court with recovering it on behalf of the 53 people who gave Prentis the original loans. In court documents, the firm says it issued proceedings to repossess Gigg Lane in May 2001, but agreed to delay moving on the ground because Bury claimed Mansport Developments was negotiating to buy the club.

Mansport was only formed in January last year and is registered at the Manchester office of David Jones, who has been Swinton's secretary since 1995. The company's shareholders are still unknown. Until a month ago, the sole director was Paul Barrett.

Last year, Jones offered to become Bury's company secretary, to facilitate the Mansport deal. Ashurst Morris Crisp treated Mansport as preferred bidder and, when Robinson resigned from Bury at the end of January, he said it had a deal ready to sign.

Then, last week, the Manchester Evening News revealed that Jones and Barrett had been convicted together in 1997 of obtaining services by deception and imprisoned for 18 months – reduced to 12 on appeal – and eight months respectively. Several of Barrett's companies have also been put into liquidation and are under investigation by the Department of Trade and Industry. On 14 January Barrett resigned from Mansport. Jones is a former bankrupt who in 1998 was disqualified from acting as a company director for 12 years following irregularities in his running of another company, Burling Bond (1986) Limited.

Mansport's apparent withdrawal has left the mortgage proceedings looming. Bury had finally defended the action last September, claiming that Robinson had an oral agreement, not detailed in the mortgage contract, that the mortgage was in fact for 15 years, and would drop to a "conventional rate" of interest after one year. The creditors claim that this is not a valid defence, and have applied to have it struck out on 4 March and judgment given for £1.35m, plus costs, and £984.59 daily interest.

When Smith and Mason took over from Robinson, they found that Jones had been trying to arrange a £1.2m loan with another lender, Ian Battersby. Battersby said yesterday he was a "commercial loan broker" and had been discussing a loan from "a major plc". But Mason regards the terms as too costly and said that they were very unlikely to proceed.

The upshot of this depressing and scarcely credible tale is that Bury are up to their ears in debt and face repossession if the creditors obtain judgment on 4 March. Smith, smoking hard in the chairman's forlorn office, has appealed for 200 wealthy local people to put £10,000 in each, and for crowds of 5,000 to allow Bury to break even. Besides the other problems, the wage bill is around £25,000 per week but Bury only make £25,000 a month. "That's how cock-eyed it is," sighed Mason. The Professional Footballers' Association has lent Bury £170,000, its highest amount ever, to cover wages. The Government-backed initiative Supporters Direct are understood to be meeting Bury and Swinton fans to try to plot a way forward.

Nobody from Mansport answered calls this week. Robinson refused to discuss Bury's plight in detail because, he said: "I'm employed at another club." He was paid around £50,000 a year for his work at Bury, which was generally praised in the good years. Gigg Lane, facing repossession, has been fully developed, with £2.06m grants of public money from the Football Trust. The last stand to be completed, behind the goal, was the Cemetery End. Behind it, on quiet, non-match, days Bury's Wesleyan and Unitarian founding fathers can be heard, slowly turning in their graves.