Middlesbrough F.C. survival from liquidation
Encyclopedia
This article details Middlesbrough Football Club
's liquidation in 1986
.
season, Middlesbrough were in the Football League First Division
. The season ended with them finishing bottom of the league and being relegated. It has been claimed that the team had been severely weakened by the sales of star players such as Craig Johnston
, David Armstrong and Mark Proctor
. Dutch midfielder Heini Otto
had, however, successfully integrated into the team.
In February of that year, Boro chairman Charles Amer and his son Kevin, who was a director, both resigned from the board. George Kitching
moved in to take over as chairman but it was his unenviable task (at the club's ninetieth annual meeting in December 1982
) to report to shareholders that the club had suffered an annual loss of £307,718.
The Manager Bobby Murdoch
was asked to resign in September 1982 after poor performances, and Harold Shepherdson
was appointed caretaker until a permanent replacement could be installed. After only 6 months as chairman, Kitching resigned and Mike McCullagh took over, with Keith Varley as vice-chairman. The board appointed Malcolm Allison
as full-time manager. Allison took the team to a point away from home in his first game in charge but the team only went on to finish 16th.
The next season, things continued to decline. Boro's form was poor in both the League and cup (although they were never in serious danger of relegation), but more worryingly for the board the club was getting into serious financial problems. Malcolm Allison was being pressured into off-loading star players to keep the club afloat. Late in March 1984, Allison sensationally claimed that it was "better for the club to die than to linger slowly on its deathbed", a quote which was swiftly followed by his sacking. Jack Charlton
guided the club through the rest of the season, assisted by Willie Maddren
, and they finished 17th, a place down on the previous season.
Steve Gibson
joined the board as a director in November 1984, and Maddren, now appointed as permanent manager, miraculously guided the club to safety in 1984-85
. On the last day of the season, the team needed three points to survive, and the team delivered a 2–0 win, leaving the team 19th.
McCullagh resigned as chairman and Alf Duffield was installed as chairman. He made the right noises in the press and pleased the fans initially. Middlesbrough desperately needed capital but the opinions of board members were split over the idea to raise £1 million by a public share issue
. Gibson realised Duffield didn't have control over the shareholders but he tried to do his best for the club.
was brought in to assist him. However, only six weeks later, Maddren left and Rioch took over full-time.
In April 1986
, the club had to borrow £30,000 from the Professional Footballers' Association
to pay players' wages and things were looking bad. Rioch's strict disciplinary methods had upset senior players and he instead relied on youth. Tensions between Rioch and chairman Duffield grew during the final four weeks of the season and, following an allegedly mighty row during a meeting over dinner, Duffield resigned.
Duffield had lent money to the club himself or arranged bank loans which he had secured. Unfortunately, instead of giving the club financial stability, they were only getting further and further into debt. Gibson tried to keep the problems "in house" but information was leaked to the press about the difficulties soon after.
On the pitch, Boro tumbled down into the Third Division
for only the second time in their history, after a loss on the final day of the season. Debts were discovered to be bigger than initially thought. £100,000 was still owed to former chairman Charles Amer for construction of the sports hall at Ayresome Park
eight years earlier, money for which Amer was planning steps to retrieve.
On 21 May 1986, with debts amounting to almost £2 million, the club called in the provisional liquidator
. In late July, the Inland Revenue
took the club to court. The club owed £115,156 in tax and the judge issued a winding up
order. On the second of August, Rioch and twenty-nine other non-playing staff were sacked and the gates to Ayresome Park were padlocked. Some players chose to remain and train under Rioch and coach Colin Todd
, while others such as Don O'Riordan
and Peter Beagrie
(since nicknamed 'Judas' because of this) chose to leave.
Gibson's haulage company, Bulkhaul Limited
, was expanding and doing well, but he was still relatively new to the business and lacked big time credibility. In order to help salvage the situation, Gibson approached the council for help, who in turn approached ICI
. He also contacted Graham Fordy of Scottish & Newcastle
. An advert was placed in The Times
for help, and Henry Moszkowicz was one of those who replied. The consortium realised the structure of the club had to change and so Gibson approached the board asking for total executive powers. He got his wish, after a heated argument. Gibson reached an agreement with Duffield, who was owed £500,000, that he would wind up the company. Clubs in less serious situations had previously used liquidation to get out of problems, but when it came to Middlesbrough's turn, the Football League
showed a lack of support and Gibson claimed they wanted to “crucify a football club, and this small club in the north east was the one they picked on.”
A problem arose when the council was unable to meet its £200,000 share of the pot, meaning Gibson and Moszkowicz had to raise their inputs. Things continued to work against them. Three days before the start of the season, the league introduced a ruling meaning the club had to have £350,000 in working capital and show it could pay all creditors 100 pence in the pound. The death of the club was then announced on Tyne Tees Television
.
A meeting with the Football League took place on Friday 22 August. Notes were passed from room to room between the league's representatives and the consortium. Colin Henderson agreed a deal with ICI for a bond
, meaning that they would pick up a major part of any subsequent debt, and the consortium put in their £825,000. With ten minutes to spare before the registration deadline, the documents were signed by Graham Fordy, Reg Corbridge and Henry Moszkowicz. In recognition of Henderson's achievements in delivering the bond in a format acceptable to everyone, he was named chairman of Middlesbrough Football & Athletic Company (1986) Ltd., the new company formed by the purchase of Blackplay Ltd., a dead company, off the shelf. Gibson, Fordy, Corbridge and Moszkowicz formed the board. The club had been saved and the deal was announced to the public at the town hall.
season as people came forward to claim old debts, but this was overshadowed by the achievements of Rioch's side on the pitch.
The side, which had been relegated the season before, finished second in the table, regaining a place in the Second Division. The following season, the club finished third in the place, winning promotion to the First Division by the play-offs. Although the club would be relegated back to the second flight after the next season, the recovery from such a precarious situation surprised everyone in the football world.
Middlesbrough F.C.
Middlesbrough Football Club , also known as Boro, are an English football club based in Middlesbrough, who play in the Football League Championship. Formed in 1876, they have played at the Riverside Stadium since August 1995, their third ground since turning professional in 1889...
's liquidation in 1986
1986 in football (soccer)
The following are the football events of the year 1986 throughout the world.- Events :* March 11 – Germany's Siegfried Held makes his debut as the manager of Iceland, losing against Bahrain....
.
Lead-up
At the start of the 1981-821981-82 in English football
The 1981–82 season was the 102nd season of competitive football in England.It was also the first season that the Three points for a win system was introduced.- First Division :Three points for a win was introduced for the first time in England...
season, Middlesbrough were in the Football League First Division
Football League First Division
The First Division was a division of The Football League between 1888 and 2004 and the highest division in English football until the creation of the Premier League in 1992. The secondary tier in English football has since become known as the Championship....
. The season ended with them finishing bottom of the league and being relegated. It has been claimed that the team had been severely weakened by the sales of star players such as Craig Johnston
Craig Johnston
Craig Johnston is a former football player who was one of the first Australians to make a major impact in the English game. He is remembered for his time spent with Liverpool throughout the 1980s...
, David Armstrong and Mark Proctor
Mark Proctor (footballer)
Mark Proctor is an English former footballer and former football manager. He is currently first team coach of Middlesbrough.-Playing career:...
. Dutch midfielder Heini Otto
Heini Otto
Heini Otto is a retired football player from the Netherlands.-Early career:Otto worked for his father-in-law in the gold business, and then in a whisky distillery before becoming a professional footballer...
had, however, successfully integrated into the team.
In February of that year, Boro chairman Charles Amer and his son Kevin, who was a director, both resigned from the board. George Kitching
George Kitching
George Kitching CBE, DSO, CD was a Canadian general active in World War II.George Kitching was born on 9 September 1910 in Guangzhou , China. He died on 15 June 1999 in Victoria, Canada. He was the guest of Prince Bernhard of Lippe-Biesterfeld a couple of days before when he fell ill...
moved in to take over as chairman but it was his unenviable task (at the club's ninetieth annual meeting in December 1982
1982 in football (soccer)
The following are the football events of the year 1982 throughout the world.- Events :* March 14 – Johannes Atlason makes his debut as the manager of Iceland, when the team draws against Kuwait....
) to report to shareholders that the club had suffered an annual loss of £307,718.
The Manager Bobby Murdoch
Bobby Murdoch
Bobby Murdoch was a Scottish professional footballer who played for Celtic and was one of the Lisbon Lions, the Celtic team who won the European Cup in 1967. He and Bertie Auld formed Celtic's central midfield....
was asked to resign in September 1982 after poor performances, and Harold Shepherdson
Harold Shepherdson
Harold Shepherdson was an English football player, coach and manager.Born in Middlesbrough, Shepherdson signed for his home town club in 1936, but saw his playing career interrupted by the Second World War and ultimately made just 17 league appearances.He is most notable for having been Alf...
was appointed caretaker until a permanent replacement could be installed. After only 6 months as chairman, Kitching resigned and Mike McCullagh took over, with Keith Varley as vice-chairman. The board appointed Malcolm Allison
Malcolm Allison
Malcolm Alexander Allison was an English football player and manager. Nicknamed "Big Mal", he was one of English football's most flamboyant and intriguing characters because of his panache, fedora and cigar, controversies off the pitch and outspoken nature.Allison's managerial potential become...
as full-time manager. Allison took the team to a point away from home in his first game in charge but the team only went on to finish 16th.
The next season, things continued to decline. Boro's form was poor in both the League and cup (although they were never in serious danger of relegation), but more worryingly for the board the club was getting into serious financial problems. Malcolm Allison was being pressured into off-loading star players to keep the club afloat. Late in March 1984, Allison sensationally claimed that it was "better for the club to die than to linger slowly on its deathbed", a quote which was swiftly followed by his sacking. Jack Charlton
Jack Charlton
John "Jack" Charlton, OBE, DL is a former footballer and manager who played for Leeds United in the 1950s, 1960s and 1970s, and was part of the England team who won the 1966 World Cup...
guided the club through the rest of the season, assisted by Willie Maddren
Willie Maddren
William Dixon 'Willie' Maddren was a football player for Middlesbrough Football Club between 1968 and 1979.-Footballer at Middlesbrough:...
, and they finished 17th, a place down on the previous season.
Steve Gibson
Steve Gibson (chairman)
Steve Gibson is an entrepreneur and the chairman and owner of Middlesbrough Football Club. He is acclaimed in Middlesbrough for being a local working class man who made good...
joined the board as a director in November 1984, and Maddren, now appointed as permanent manager, miraculously guided the club to safety in 1984-85
1984-85 in English football
The 1984–85 season was the 105th season of competitive football in England.-Bradford City disaster:56 spectators died and more than 200 were injured when a fire ripped through the Main Stand at Valley Parade during Bradford City's Third Division fixture with Lincoln City on 11 May...
. On the last day of the season, the team needed three points to survive, and the team delivered a 2–0 win, leaving the team 19th.
McCullagh resigned as chairman and Alf Duffield was installed as chairman. He made the right noises in the press and pleased the fans initially. Middlesbrough desperately needed capital but the opinions of board members were split over the idea to raise £1 million by a public share issue
Rights issue
A rights issue is an issue of additional shares by a company to raise capital under a seasoned equity offering. The rights issue is a special form of shelf offering or shelf registration. With the issued rights, existing shareholders have the privilege to buy a specified number of new shares from...
. Gibson realised Duffield didn't have control over the shareholders but he tried to do his best for the club.
1986
With Maddren struggling with results, coach Bruce RiochBruce Rioch
Bruce David Rioch is an English-born football manager and former player. He was manager of Aalborg BK in the Danish Superliga, until his sacking on 23 October 2008....
was brought in to assist him. However, only six weeks later, Maddren left and Rioch took over full-time.
In April 1986
1986 in football (soccer)
The following are the football events of the year 1986 throughout the world.- Events :* March 11 – Germany's Siegfried Held makes his debut as the manager of Iceland, losing against Bahrain....
, the club had to borrow £30,000 from the Professional Footballers' Association
Professional Footballers' Association
The Professional Footballers' Association is the trade union for professional footballers in England and Wales. The world's oldest professional sport trade union, it has 4,000 members....
to pay players' wages and things were looking bad. Rioch's strict disciplinary methods had upset senior players and he instead relied on youth. Tensions between Rioch and chairman Duffield grew during the final four weeks of the season and, following an allegedly mighty row during a meeting over dinner, Duffield resigned.
Duffield had lent money to the club himself or arranged bank loans which he had secured. Unfortunately, instead of giving the club financial stability, they were only getting further and further into debt. Gibson tried to keep the problems "in house" but information was leaked to the press about the difficulties soon after.
On the pitch, Boro tumbled down into the Third Division
Football League Third Division
The Football League Third Division was the 3 tier of English Football from 1920 until 1992 when after the formation of the Football Association Premier League saw the league renamed The Football League Division Two...
for only the second time in their history, after a loss on the final day of the season. Debts were discovered to be bigger than initially thought. £100,000 was still owed to former chairman Charles Amer for construction of the sports hall at Ayresome Park
Ayresome Park
-External links:**-References:...
eight years earlier, money for which Amer was planning steps to retrieve.
On 21 May 1986, with debts amounting to almost £2 million, the club called in the provisional liquidator
Liquidator (law)
In law, a liquidator is the officer appointed when a company goes into winding-up or liquidation who has responsibility for collecting in all of the assets of the company and settling all claims against the company before putting the company into dissolution....
. In late July, the Inland Revenue
Inland Revenue
The Inland Revenue was, until April 2005, a department of the British Government responsible for the collection of direct taxation, including income tax, national insurance contributions, capital gains tax, inheritance tax, corporation tax, petroleum revenue tax and stamp duty...
took the club to court. The club owed £115,156 in tax and the judge issued a winding up
Liquidation
In law, liquidation is the process by which a company is brought to an end, and the assets and property of the company redistributed. Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation...
order. On the second of August, Rioch and twenty-nine other non-playing staff were sacked and the gates to Ayresome Park were padlocked. Some players chose to remain and train under Rioch and coach Colin Todd
Colin Todd
Colin Todd is an English football manager and former player. As a player, he made more than 600 appearances in the Football League, playing for Sunderland, Derby County, Everton, Birmingham City, Nottingham Forest, Oxford United and Luton Town, and also played in the North American Soccer League...
, while others such as Don O'Riordan
Don O'Riordan
Donald Joseph O'Riordan is an Irish former professional footballer and football manager currently in charge of American side FC New York. O'Riordan notably played for Grimsby Town amongst others and has previously been on the coaching staff at Sheffield United, in the role of technical...
and Peter Beagrie
Peter Beagrie
Peter Sidney Beagrie is a former English footballer who played as a left-winger. He played for ten different clubs at professional level notably Everton, Manchester City, Bradford City and Scunthorpe United...
(since nicknamed 'Judas' because of this) chose to leave.
Gibson's haulage company, Bulkhaul Limited
Bulkhaul Limited
Bulkhaul Limited is a British company specialising in global tank transportation of bulk liquids, powders and gases. The company also repairs its own tanks. It was established in 1981 by Steve Gibson in Middlesbrough, North Yorkshire. Bulkhaul Limited is run under the holding company Gibson O'Neill...
, was expanding and doing well, but he was still relatively new to the business and lacked big time credibility. In order to help salvage the situation, Gibson approached the council for help, who in turn approached ICI
Imperial Chemical Industries
Imperial Chemical Industries was a British chemical company, taken over by AkzoNobel, a Dutch conglomerate, one of the largest chemical producers in the world. In its heyday, ICI was the largest manufacturing company in the British Empire, and commonly regarded as a "bellwether of the British...
. He also contacted Graham Fordy of Scottish & Newcastle
Scottish & Newcastle
Scottish & Newcastle plc was a "long alcoholic drinks" company with positions in 15 countries, including UK, France and Russia. It was headquartered in Edinburgh, Scotland, UK. In the last 20 years, S&N expanded significantly from its home base to become an international business with beer...
. An advert was placed in The Times
The Times
The Times is a British daily national newspaper, first published in London in 1785 under the title The Daily Universal Register . The Times and its sister paper The Sunday Times are published by Times Newspapers Limited, a subsidiary since 1981 of News International...
for help, and Henry Moszkowicz was one of those who replied. The consortium realised the structure of the club had to change and so Gibson approached the board asking for total executive powers. He got his wish, after a heated argument. Gibson reached an agreement with Duffield, who was owed £500,000, that he would wind up the company. Clubs in less serious situations had previously used liquidation to get out of problems, but when it came to Middlesbrough's turn, the Football League
The Football League
The Football League, also known as the npower Football League for sponsorship reasons, is a league competition featuring professional association football clubs from England and Wales. Founded in 1888, it is the oldest such competition in world football...
showed a lack of support and Gibson claimed they wanted to “crucify a football club, and this small club in the north east was the one they picked on.”
A problem arose when the council was unable to meet its £200,000 share of the pot, meaning Gibson and Moszkowicz had to raise their inputs. Things continued to work against them. Three days before the start of the season, the league introduced a ruling meaning the club had to have £350,000 in working capital and show it could pay all creditors 100 pence in the pound. The death of the club was then announced on Tyne Tees Television
Tyne Tees Television
Tyne Tees Television is the ITV television franchise for North East England and parts of North Yorkshire. As of 2009, it forms part of a non-franchise ITV Tyne Tees & Border region, shared with the ITV Border region...
.
A meeting with the Football League took place on Friday 22 August. Notes were passed from room to room between the league's representatives and the consortium. Colin Henderson agreed a deal with ICI for a bond
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
, meaning that they would pick up a major part of any subsequent debt, and the consortium put in their £825,000. With ten minutes to spare before the registration deadline, the documents were signed by Graham Fordy, Reg Corbridge and Henry Moszkowicz. In recognition of Henderson's achievements in delivering the bond in a format acceptable to everyone, he was named chairman of Middlesbrough Football & Athletic Company (1986) Ltd., the new company formed by the purchase of Blackplay Ltd., a dead company, off the shelf. Gibson, Fordy, Corbridge and Moszkowicz formed the board. The club had been saved and the deal was announced to the public at the town hall.
Aftermath
Legal matters continued throughout the 1986–87Middlesbrough F.C. season 1986-87
During the 1986-87 season, Middlesbrough participated in the Football League Third Division following their relegation the previous season. They were promoted back to the Second Division at the end of the season having finished second in the league....
season as people came forward to claim old debts, but this was overshadowed by the achievements of Rioch's side on the pitch.
The side, which had been relegated the season before, finished second in the table, regaining a place in the Second Division. The following season, the club finished third in the place, winning promotion to the First Division by the play-offs. Although the club would be relegated back to the second flight after the next season, the recovery from such a precarious situation surprised everyone in the football world.