The chairman of Everton offered to make a personal donation in the region of £1m to help Bury FC during the club's recent battle to stay in the football league, the BBC can reveal.
Bill Kenwright made the pledge when the Shakers were locked in last-ditch talks over their future.
However, such gifts would be forbidden by Premier League rules made to prevent conflict of interest between clubs.
Bury were expelled from the league in August amid financial difficulties.
The decision came after the club's first six fixtures of the season were suspended while the English Football League (EFL) awaited evidence of how it could pay creditors, and a takeover bid collapsed.
It became the first club to have its league membership withdrawn since Maidstone United was liquidated in 1992. EFL chief executive Debbie Jevans said Mr Kenwright's gesture was appreciated but said it would have been impossible under current Premier League rules.
This was despite the offer being for a gift from theatre producer Mr Kenwright's personal fortune rather than Everton's club finances, and not intended as a bid for a stake in the club.
Ms Jevans said: "He was great. [Everton] do a huge amount of work in the community.
"The Premier League clubs do a huge amount through solidarity payments and parachute payments, but a football club owner cannot have interests in more than one club.
"If there was an opportunity for help through the community work that happens at Everton, and they do a huge amount, then there is a conversation to be potentially had, but that is very different to Premier League clubs having an involvement in a second club." Other non-financial offers of help were accepted, including Manchester City allowing Bury to use the club's Carrington training ground rent-free for five years.
Earlier this month a prospective new buyer for Bury ended their interest after doing due diligence, according to supporters' group Forever Bury.
The club, which plans to apply for a place in the 2019-20 National League, is currently facing a winding-up petition and could be liquidated.
Both Everton and Mr Kenwright declined to comment on the chairman's offer.
Bury FC have again avoided liquidation after a High Court judge allowed the club more time to settle its debts.
Lawyers for the crisis club told a specialist insolvency and companies court in London that a further extension was needed to investigate whether the club has paid too much tax to HM Revenue and Customs.
Judge Nicholas Briggs adjourned the case until December 4.
Two weeks ago, the Shakers were handed a 14-day reprieve to allow more time to repay tax debts.
As the club returned to court this morning, it was widely expected it would be liquidated, with supporters saying it would allow them to press on with plans for a phoenix club.
However, in a statement published on the club's website last week, Bury owner Steve Dale denied the club was 'dead', adding that he expected it to play football again.
The Shakers' Football League membership was withdrawn on August 27 after Dale failed to meet a deadline to provide guarantees that Bury were in a position to fulfil their Sky Bet League One fixtures.
They became the first club to drop out of the EFL since Maidstone were liquidated in 1992.
A bid to reinstate the club in League Two for the start of next season was rejected by the remaining 71 member clubs of the EFL.
Bury’s owner Steve Dale has defaulted on the company voluntary arrangement (CVA) he agreed last summer to settle the club’s £5m debts, having failed to provide the money required to fund it.
The deadline passed on Tuesday and the supervisor of the CVA, the accountant Steven Wiseglass, confirmed that the funding had not been provided to service it. Dale’s failure makes it almost certain that the 135-year-old club, expelled from the Football League in August because Dale did not provide convincing evidence that he had the money to fund it for a season, will go into liquidation.
Wiseglass, a director at the insolvency firm Inquesta, said in a statement: “The CVA has formally defaulted and we will now be looking at taking the necessary action to deal with the default.”
According to another insolvency practitioner with experience of working on football clubs in crisis, the normal procedure when a CVA defaults is that the supervisor of the CVA, in this case Wiseglass, will formally petition for the winding up of a company. If that happens, Bury’s few remaining assets will be sold by a liquidator, which could include the right to use the name Bury FC. Dale has not yet responded to a request for comment.
The Gigg Lane ground has a mortgage on it of more than £3.8m held by a company, Capital Bridging Finance Solutions, which would in effect repossess the stadium. It could be expected to sell it if the supporters’ “phoenix club,” or a consortium of businessmen or other group, can agree a deal and has the money to buy it.
Wiseglass told creditors last month that Dale had missed the maximum six-month deadline to provide the money to fund the CVA, and had been given a further 21 days to do so, or the CVA would be terminated. In that settlement, agreed on 18 July, Dale committed to paying the former players and other “football creditors”, owed approximately £1m, in full, and 25p in the pound to HMRC and other “non-football creditors” owed approximately £4m.
“The terms of the CVA were that funds should be introduced within a maximum period of six months,” Inquesta said in the letter to creditors last month. “This came to an end on 18 January 2020. Due to no funds being received, we have issued a notice of breach to the director, giving 21 days for the funds to be introduced. Should the breach not be remedied within the defined timescale, the supervisor will review the position and will terminate the agreement.”
Dale, whose business record shows that he has been involved with companies in financial difficulties which have often then been dissolved or liquidated, took over Bury for £1 from the previous owner, Stewart Day, in December 2018. He said he was doing so as a philanthropic venture, but he never satisfied the EFL that he had the “source and sufficiency” of funds required to run it, either before or after the takeover.
The team managed by Ryan Lowe won promotion to League One last season, but the players, including some who had been signed under Day the previous summer, revealed in May that they had not been paid since February.
Dale was listed in the CVA as having £3.6m owed to him, which was understood to have been originally loaned to the club by Day. In July a company, RCR Ltd, owned by the partner of Dale’s daughter, bought for £70,000 a £7.1m debt Bury owed to Day’s property company, Mederco, which had collapsed into administration. The £7.1m debt that RCR wielded in the subsequent creditors’ meeting was crucial in having the votes to approve the CVA, as HMRC and a number of other creditors voted against it.
Dale had committed to providing the money to pay off the creditors, with the proposal by Inquesta stating: “Mr Dale has confirmed that he will personally guarantee that sufficient funds will be introduced.”
Dale told the Guardian after the notice of breach was issued that he was still intending to settle the club’s debts, and was “just finalising saving the club through the CVA and applying to play football next season”.
Shortly after the club was expelled by the EFL the Insolvency Practitioners Association announced that it was to hold an investigation into the “operation” of the CVA, following concerns and information which had been brought to its attention.
Bury FC’s future is in further limbo with owner Steve Dale attempting to force through another plan to settle the club’s debts.
Dale defaulted on his initial company voluntary agreement in January with a document sent to creditors revealing it was officially terminated on March 9.
Now he has asked those owed money to accept a new deal by April 1 or the club will be plunged into liquidation, ending 135 years of history.
“It is understood, that the director is looking to propose a new CVA which should be issued shortly,” read the report, issued by CVA supervisor Steven Wiseglass and seen by the Bury Times.
“The director has requested that creditors take no action within the next few weeks to facilitate this.
“If no CVA is forthcoming by April 1 then I will issue a winding-up petition against the company and I intend to seek the appointment as liquidator.”
A consortium has been looking to complete a solvent sale of the Shakers from Dale while a new phoenix club, Bury AFC, are working to ensure there is football in the town next season having made an application to the North West Counties League, the club having been expelled from the EFL last August.
Last July’s initial agreement would have seen unsecured creditors, including HM Revenue and Customs paid 25p for every pound owed.
Football creditors would have been paid in full. The initial agreement resulted in the Shakers, fresh from winning League Two promotion, being deducted 12 points.
Dale then failed to satisfy the EFL he had the funds to take the club forward leading to the two-time FA Cup winners being kicked out of the league.