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Chester City likely to fold watch

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    You may or may not know that Chester City were prevented by the FA from starting their conference season at Gray's Athletic and are perhaps likely to fold unless they can agree affiliation with the FA. I posted this on the non-league thread but thought it was important for everyone to read. I'm not a Chester fan, but I think all of us should be concerned with their plight.

    So here's the most recent chapter in Chester's history.

    In 2001, Chester were bought by Liverpudlian boxing promoter Stephen Vaughan, a man who had already taken Barrow FC into liquidation and was a suspected money launderer for recently imprisoned scouse drug kingpin Curtis Warren.

    This was greeted with delight by the fans who were at that time boycotting games because of the bizarre and megalomaniacal antics of hated owner/manager Terry Smith who had got them relegated from the league- (an equally long, equally tawdry tale) even as Barrow fans tried to resurrect the dying embers of their club.

    Flushed with cash, Chester got promoted back into the league in 2004. Some questioned at the time certain irregularities in finances (for example, one year, the club apparently sold 7000 shirts, despite average attendances of below 3000) and the club were suspected of fiddling attendance figures, but most were happy to enjoy the good times. Between 2004 and 2007, Chester's big spending attitude was hampered by salary capping rules and low attendances but they managed to preserve mid-table positions in each of those seasons. Vaughan was heavily criticised for playing both of his sons in various Chester sides (notably making his son, Stephen Jr, captain). He began to make veiled threats about the amount he had 'loaned' the club (claiming upwards of £5 million had been lent).

    In the autumn of 2007, Colin Smith, reputedly Curtis Warren's top lieutenant, was gunned down in Liverpool in a gangland shooting. The following saturday, Chester City observed a minutes silence to a "generous benefactor" one Colin Smith. There followed a dramatic loss of form (and personnel in the January transfer window) with previously promotion hopeful Chester narrowly escaping relegation. Rumours abound the club that players were not being paid.

    The following season, Chester were dogged with financial problems, placed under a transfer embargo due to non-payment of wages and finished the season in 23rd place (below Bournemouth and Rotherham, both of whom started the season on minus seventeen points, ahead of Luton who started on minus thirty) and relegated back down to the Conference.

    In the close season, Vaughan announced he was resigning as Chairman and selling the club to businessman Gary Metcalfe. The sale never went through (despite claims by Vaughan of it "just being finalised" ) and Chester were placed into administration. By this time, fans were fed up of Vaughan and saw that he, having taken two clubs into administration would not be allowed (by the FA's Fit and Proper Owner Test) to take charge of the club again. A new owner agreed a CVA (paying 15% to creditors) before the conference AGM and appeared to be prepared to start the season, albeit with a 10 point deduction. The new owner of the club was announced as (and this deserves a drum roll) Stephen Vaughan Jr. The fans were not happy.

    Equally unhappy with this sleight of hand was HMRC. The administrators reported that the club owed £1.8 million to Vaughan himself and £2.2 million to a Vaughan owned company. HMRC were owed around a million pounds in unpaid PAYE/NIC. Oddly enough, HMRC owed the club £1.2 million in an unpaid VAT refund (a seemingly bizarre figure).

    The trade creditors totalled £1.8 million. Among this, Apple Financial services and its owner, Paul Wells, were owed a total of £1.3 million without anyone knowing why. A company called Hannah Industrial & Commercial Services Ltd was owed £143,750, yet that company was only formed in February 2009 and is in the business of contract cleaning. Yet in 3 months Chester City had racked up a debt of that magnitude. If spent on cleaning that works out at over £11,000 per week to keep the Deva spick and span! HMRC, convinced that they were being conned out of their money, but not having the neccessary 25% of debts to block the CVA, took the administrators to court. The CVA was overturned and Chester were denied affiliation to the FA (needed to play in any FA competition).

    Since then, the debacle has been rumbling on with Vaughan insisting that paperwork 'just needed to be finalised'. Then, two days before the start of the season, Chester announced that they had agreed with the conference that they would start the season but with a 25 point penalty. The next day, the FA announced that Chester would not start the season as they were not affiliated. The game against Gray's Athletic was postponed.

    If you've bothered reading all that well done. Even though we have a pretty intense rivalry with Chester, you can't help but feel sorry for their fans. I don't know if many of us could go through all they've been through. But if Chester die, it will help to prove that rich *******s who care about money will always trump poor unimportant people who just care about football.
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    Should make that into a drama series.
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    Read it all. I'm a bit stunned if I'm being perfectly honest. Used to think that supporters of the club should be represented at board level and/or the owner to rid of poor cases such as this but there are examples of clubs being run by people who support their side who have gone through turmoil, though not the same level as Chester admittedly.
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    (Original post by Jeppaloth)
    Should make that into a drama series.
    Yeah, it's quite a story. If you're interested, some more information about Vaughan's links to Curtis Warren and a report about the death of generous benefactor Colin Smith.

    It seems that the recent history of Chester contains more ***** than a lesbian porn film. Other notable *******s are Terry Smith (an American businessman who despite not understanding football, sacked the manager and ran the team himself), Mark Gutterman (a gutless spineless corpulent **** and serial wrecker of football clubs who took Chester to bankruptcy before setting about my club), Eric Barnes (who sold the old ground, Sealand Road leading to the club playing in exile in Macclesfield for several years).

    The latest news is that the Conference are getting members to vote on whether to allow Chester to play. But even if they all vote 'yes' that may not be the end.
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    Exellent post, well summed up.

    I admit I've never been a fan of Chester as a club. It's not the most appealing fixture on paper, the stadium is like it's made of lego, and I've witnessed two terrible performances from us at the Deva in the last two seasons, losing 3-0 and 5-1. But at the end of the day, it's the fans you have to feel sorry for. I really hope they pull through, the loss of any football club is sad and shouldn't happen. Higher authories really need to start taking notice. Scum like Vaughan shouldn't be allowed anywhere near football club.

    Good luck Chester. If it's any consolation, we were moments from going bust in 1992 due to our dodgy ticket touting chairman, but we're still here fighting now.
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    (Original post by whateverwillbe)
    Exellent post, well summed up.

    I admit I've never been a fan of Chester as a club. It's not the most appealing fixture on paper, the stadium is like it's made of lego, and I've witnessed two terrible performances from us at the Deva in the last two seasons, losing 3-0 and 5-1. But at the end of the day, it's the fans you have to feel sorry for. I really hope they pull through, the loss of any football club is sad and shouldn't happen. Higher authories really need to start taking notice. Scum like Vaughan shouldn't be allowed anywhere near football club.
    It's a dreadful stadium in a wasteland. Not a nice place for a day out. But when you leave the stadium after winning two-nil, and walk back to the station, flushed with pride and the knowledge that three thousand Deviants will be crying into their White Lightening in their Blacon council flats knowing that they've lost their biggest game of the season, it's the greatest feeling on earth. I don't want to lose that...

    In other news. Chester's game against Gateshead has been called off. This is despite the Blue Square Premier's 23 clubs voting unanimously to allow Chester to play. The FA are still refusing to allow affiliation and the club (i.e. Vaughan) has released a statement claiming it's all the FA's fault. Sadly confidentiality agreements stop the club (Vaughan) from providing any evidence that this was indeed the case. I can't imagine any Chester fans are very likely to take too much of what Vaughan says on trust.

    Some more further reading: a David Conn report into money laundering in football. No names named sadly...
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    Just thought I'd add this to the mix, Ched Evans who was signed from Chester's academy when it closed has just been sold on for £3 million. Its a bit of a joke that the richest club in the world keeps that while Chester go under.
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    That's a slightly different issue though. When Chester were relegated from the league, they closed their academy. Short sighted, perhaps, but there's no funding for Conference level Centres of Excellence.

    But if Chester go under it will be because Vaughan ruined them not because they lost a few talented youngsters. It's ridiculous...

    Here's the story of Vaughan's time at Barrow.

    Spoiler:
    Show

    The road to ruin is paved with good intentions. Or at least that's what they say. But in the case of Barrow AFC, who are teetering on the edge of the cliff that leads to total extinction, there are precious few good intentions to be found.

    On 24th January, Barrow AFC were wound up in the High Court following the action of a diverse group of creditors who included a building company that had installed crush barriers to meet Conference ground grading regulations, the Inland Revenue, Customs and Excise and a former player. They are now in the hands of a receiver who is allowing the club to complete its fixtures provided no further debt is incurred. A consortium of eight local businessman have put up enough money to ensure that this can happen until the end of the season. But what then? Seven first team players have left and Barrow can't claim a penny for any of them. Since the club was wound up, all the players are out of contract. The new manager (we'll come to the old manager a bit later) hurriedly registered five reserves with the Conference to ensure we can find eleven players to turn up every Saturday. Some supporters are bringing their boots to the next game just in case.

    How on earth did it come to this? Only last May Barrow were on the crest of the wave after a marvellous season in which they were UniBond Premier League champions and reached the last eight of the FA Trophy (only to lose the Replay on penalties). We didn't just win the UniBond; we dominated it, reaching top position in October 1997 and keeping it until the end of the season. At one stage we were twelve points in front of second placed Boston United. The fans flocked to Holker Street. That Trophy Quarter-Final Replay was watched by over 4200 with more than 1000 unable to get in. Nearly 3000 came to see the League game against Boston in which Barrow claimed the victory they needed to clinch their place in the Conference after a long absence of six seasons.

    And now it looks like we're headed back there quicker than a man in a lead overcoat drops to the bottom of the local docks.

    The story starts with the acquisition of the club in 1995 by a Liverpool boxing promoter by the name of Stephen Vaughan. He bought the shares from the retiring Chairman, the late Bill McCullough, and set about restoring Barrow to its days of former glory as a Football League club. Yes, that's what he said. He wanted to take a football club from the nether regions of the non-League pyramid right back into Division Three. He said he was a millionaire and money was no object. He told the manager, Tony Hesketh (now assistant manager at Morecambe) to buy the players he needed without worrying about the finance. Notable amongst his signings was ex-Everton and England u-21 player Billy Kenny. But Billy had a problem. A severe problem. He took drugs and had spent the previous twelve months fighting a cocaine addiction.

    Hesketh couldn't build a team that would win the UniBond, so after a brief caretaker spell by ex-Bury manager, Mike Walsh, now at Swindon, Vaughan appointed fellow Liverpudlian, the little known Owen Brown, whose main claim to fame had been a season as manager of Prescot Cables in the NW Counties League.

    It took Brown two seasons to build his championship winning side. Again, money was no object and during the build up to our first season back in the Conference, Brown assembled an expensive squad that has cost us over £5000 per week in wages. The most costly of these was ex-Wolves striker, Andy Mutch, rumoured to be the club's highest paid player ever on £450 per week.

    Vaughan said he needed crowds of 2100 at home games to pay the bills. This seemed a little reckless, to say the least. The average home gate in the UniBond had been 1400. Not bad. But a long way from break-even. Nonetheless, the fans responded and three of the first four home gates reached the magic break-even figure.

    Stephen Vaughan was no stranger to controversy. He'd already resigned once as Barrow chairman, in late 1997, during a Customs and Excise investigation into his financial affairs. He was suspected of laundering the profits of drug deals set up by Europe's biggest drugs baron, Curtis Warren, who is currently doing time in a Dutch jail. Vaughan denied the charge. He knew Warren and had used bouncers supplied by Warren's security company at some of his boxing promotions. He'd also acted for him as a middle man in some property deals. But money laundering? No way, exclaimed Vaughan. Some cynical fans suggested that this must be the reason why Vaughan was able to throw his money about on an obscure non-League football club in the far north-west. But Customs and Excise subsequently dropped the charges and Vaughan was free to return as chairman just in time to see Barrow get promotion back to the Conference.

    Now, at the start of this season, he decided he needed help on the financial front. He offered to sell his 180,000 shares at £1 a share to any takers. Fans sent in money, but they never received any share certificates. The Fraud Squad launched an investigation and Vaughan's solicitors advised him to suspend the share sale. He resigned again at the end of November 1998, this time for good. He'd had enough, he said. People always put obstacles in his way and he wasn't going to put up with it anymore. And off he went, taking the ground with him.

    Not literally, of course, but it came as a surprise to a lot of people when Vaughan announced that he held the title deeds to the Holker Street ground in return for the £400,000 he'd put into the club over the last four years. Since that money had not been repaid, he now owned the ground. But didn't the articles of Barrow AFC require a shareholders meeting to approve any sale of the ground? No such meeting had been held, but it didn't stop Vaughan. He sold the ground to another Liverpool property developer, one James Oliver, who is reckoned to be the father of the actor who plays Tinhead in Brookside. Vaughan pocketed upwards of £250 grand from this nifty piece of footwork.

    The remaining Directors were now really up against the wall. Vaughan had been funding the day to day expenses of the club, predominantly the wages of five grand per week. He announced that he'd been waiving the weekly £450 per week rent on the ground, but this would now have to be paid in full. The club was more than £200,000 in debt despite Vaughan's promise some two years back that he would clear all the debts by making a CVA (Company Voluntary Agreement) with all the club's creditors.

    The players had not been paid since October. The Board found the money from December's home games to pay the players for those, but most were owed six weeks' money. Manager Owen Brown was instructed to cut the wage bill just before Christmas. Instead, he went out and increased it by signing a new player. After the 2-1 home win over Welling in mid-January he was sacked for failing to act on the Board's instructions.

    Shane Westley, ex-Lincoln City, has been appointed as the new manager, with his old mentor, John Beck, standing behind him as and "adviser".

    The winding-up order was made forty-eight hours after they were appointed. When seven players walked out in the next week, the wage bill was slashed by more than half. Unfortunately, it also left us without a team good enough to stay in the Conference.

    The receiver reckons that Vaughan may have acted improperly over the sale of the Holker Street ground. He is investigating. Since that is the only worthwhile asset it's quite important that the true legal owner is identified. If it does belong to the club it could be sold to clear the debts and satisfy the winding-up order. True, we'd have nowhere to play, but maybe Barrow rugby league club would take pity on us and let us groundshare.

    There is a lot of doubt over whether the local businessmen will be able to keep the club going until the end of the season. If the receiver has any doubts over the club's ability to continue without incurring any more debt, he will stop the club from fulfilling its fixtures and then Barrow will be thrown out of the Conference.

    The only way back then is to do an Aldershot; reform at the lowest level of the non-League pyramid and claw our way back. What a horrific prospect, playing at Congleton and Farsley Celtic in front of two men, a dog, and a flock of sheep. We'd even have to renew our acquaintance with our old adversaries, Workington.

    So with the club in the hands of a receiver, it's very much touch and go whether Barrow AFC can stick around long enough for the next game, let alone to the end of the season. And it all came about because we trusted a boxing promoter from Liverpool, who, like the fairy story, promised to make our dreams of a return to the Football League a reality. And we believed him. He took us all for suckers.


    Barrow were thrown out of the Conference in the summer of 1999 but (after a long dispute) were, thanks to the FA, allowed to enter the Northern Premier League (at that time one level below the Conference) a month after it had commenced (the fixture backlog required them to play on New Year's Eve). They achieved promotion back into the conference in 2008.
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    Read most of that.

    It disgusts me the way the Fa treat football clubs that go into administration. The FA are there to protect football clubs. But recently they don't seem to care if a club closes (note: Newcastle BlueStar, Fisher Athletic & Scarborough - That the Fa done nothing to help).

    Its disgraceful how someone can come into a club and ruin it from the insides out. Trust me i know. I'm a Newcastle fan.

    I truly hope Chester can survive this.

    Have the Chester fans tried to do anything? The Fa really need to do something to stop clubs going under. to many recently are going out of business.
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    Curiouser and curiouser.

    A 'demonstration of unity' to get publicity for the club's plight was apparently scheduled for last night. However, the protest was moved to tonight so that Sky Sports News could cover it. A post on Deva Chat messageboard announced that now Vaughan could attend the protest against the FA.

    Some of the Chester fans have reacted with outrage that Vaughan could attempt to hijack the protest like that. However, some posts under pseudonyms on the messageboard have made thinly-veiled threats about how "fans with the best interests of Chester at heart will curb any (anti-Vaughan) disruption".

    The police have also been informed about the demonstration. (It should be noted that while most of the Chester fans want Vaughan to leave, there are certain small groups who support Vaughan and a slightly larger minority who blame Vaughan for the problems associated with the club but can't see any options other than him remaining in charge). Something like 95% of the fans (according to a recent poll on the website) blame Vaughan over the FA for the current problems, so for the protest to be hijacked in this way is a farce.

    Expect one of a full scale riot or a protest fully in support of Vaughan.

    It's looking grim for Chester at the moment. I would say that the current most likely outcome is Vaughan to remain in charge in one capacity or another.
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    Well, it appears the second of the two possibilities occurred. Here's a video of some of the aftermath of the 'protest'...

    http://www.youtube.com/watch?v=nw7tWKF_2QI

    I can't believe they allow someone associated with the club to lie so brazenly. To me, I think their best chance of survival was to make it known that the fans wanted Vaughan out and would be willing to force him out. I think they've blown it.

    Tomorrow's the important day though. FA and the conference to meet to sort out Chester City. But even if they start or not this season, it will be with a hefty points deduction and Vaughan still in charge. I can't really believe it.
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    Couldn't view that clip. But it seems strange. Its like us Newcastle fans turning out to support Mike Ashley.
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    Apparently the club has been granted affiliation for the next season. Whether they'll get an additional points deduction is not apparent yet. And Vaughan remains in charge...
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    Great article from twohundredpercent.net
    Part 5: Vaughan's Chester & The Authorities: Can You Guess Who Blinked First?
    Spoiler:
    Show

    So, Steven Vaughan wins and the game of football dies a little more inside. The FA have decided to back the Football Conference and have given Vaughan’s Chester the right to start the new season, in flagrant contravention of rule 2.7 of the Conference’s own constitution and awarded the club a licence to play football for this season. It has been a busy week for the Football Conference and the FA. At the end of last week, the Football Conference announced unilaterally that Vaughan’s Chester would be given the go ahead for the club start the new season, even though the FA still hadn’t ratified that they had an actual licence to play. The FA stepped in at this point and told the Football Conference in no uncertain terms that their match against Grays Athletic would not go ahead until they had granted their permission for it to do so, and the match was called off, as was Tuesday night’s match against Gateshead.

    At the start of this week, the Conference put the matter to a vote amongst all twenty-three other BSP clubs, who voted (very much in the way that turkeys are not universally known for their tendency to vote for Christmas) unanimously that the club could start the new season this week. Earlier this week, what was supposed to be a protest at what had been going on at the club drew television cameras to The Deva Stadium, but with a significant number of Vaughan’s Chester supporters having now seemed to decide that this whole debacle was somehow the fault of the FA rather than the fault of their own club, it was not difficult for those sympathetic to Vaughan to turn the protest into an almost embarrassingly pro-Vaughan, anti-FA demonstration, under the pretence of it being “a show of unity for the club”. It’s unsurprising that this came to pass, considering the thinly-veiled threats of violence made against people that may have protested against Vaughan on the club’s unofficial message board, Deva Chat.

    The FA and Football Conference have, ultimately, made a decision which is spineless, a cop out and an insult to anybody that believes that football clubs should abide by rules that are in place in the greater interests of the game. The Football Conference’s rule 2.7, the one which was the sticking point when it came to the club’s eligibility to start the season, may as well be abolished right now. That is the grim truth of the matter. There is no point even having a rule designed to stop clubs body-swerving their obligations towards their creditors if, when push comes to shove, the authorities relent and allow these rules to be bypassed. The Conference has broken its own rules, and the FA have sanctioned it. This disregard for the rules - and, man alive, these guys are rigid enough about rules when they want to be - has wider ramifications. Every asset stripper, every huckster, every two-bit who thinks that there may be a couple of shillings to made from picking at a small club’s carcass will have been watching developments at Vaughan’s Chester thinking, “He’ll never get away with it, will he?”, and he has. There is a little less reason for unscrupulous club owners to manage their football club within its means this evening.

    What arguably makes this even worse, even more insulting, is that they have admitted as much. The FA have fined the Football Conference £5,000 (suspended for a year) for breaking their own rules and warned them that their rules now have to be reviewed before the end of this season. The Conference, in issuing their own statement describing how they are looking forward to working with the FA to review their insolvency rules, have - in not complaining about it - effectively admitted not merely that they bent the rules to help out a club but that they broke their own rules to allow Vaughan’s Chester to stay in the BSP this season. Goodness only knows what will come out of this “review”. It would be nice to think that the FA would sit down all of the leagues and draw up identical insolvency rules for all of the leagues, from the Premier League down to the amateur leagues, and that these rules will be stiff, with absolute penalties for transgressors. The likelihood of this happening, however, is slim to zero. In the mean time, back in Footyworld, that surreal parallel universe in which the normal laws of physics often don’t seem to apply, life will return to normal. The Football Conference hasn’t upset the Football League, and it will have twenty-four competing clubs this season.

    Vaughan’s Chester’s supporters may well be celebrating this evening, but their hard work starts here. The points deduction stands, and the lack of a proper pre-season will hurt manager Mick Wadsworth and his team. Even if they avoid relegation this season, it is still possible that they will be expelled at the start of next summer if their house isn’t in order by then and with a new CVA now being almost if not completely impossible to obtain, it is difficult to see a long term way forward for them with Vaughan in charge. He has no obligation to sell at the moment, though. It now seems likely that the old company will be put into liquidation and that suppliers, local businesses and HMRC (in other words, you and I - let’s not forget that, ultimately, all money raised from tax revenues is our money) will be left without any recompense. Vaughan’s Chester’s supporters have been very, very lucky, and the very least that they owe the rest of us is to work tirelessly until Vaughan is removed from Vaughan’s Chester.

    For now, though, he’s still there. The man that sold his shares in Barrow for a nominal fee when the club played Vaughan’s Chester in the FA Cup to a painter and decorator, only to buy them back a couple of days after the match was played. The man that held a minute’s silence at The Deva Stadium for Colin Smith, a gangster shot dead outside a Liverpool gymnasium in 2007. The man that either did or didn’t pay £11,000 per week for “cleaning services” earlier this year. The man that signed the club over to his son at the end of April without making it public. The man that attempted a CVA with himself as the biggest creditor and saw an appeal against it upheld in court. Moreover, he still passes the FA’s Fit & Proper Person test to be a director of a club. In some respects, this at least makes sense, at least logically. After all, if he wasn’t a “fit & proper person” to run a football club, the Football Conference wouldn’t have accepted his application to join their league and the FA wouldn’t have ratified the decision, would they?
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    Actually, the whole coverage of the crisis from twohundredpercent.net has been excellent. Probably explains it better than I could have...

    Part 1: Chester City's Administration and Stephen Vaughan
    Spoiler:
    Show



    There are some football clubs that seem to be in a perpetual state of flux and crisis. One such club is Chester City where, over the last two decades or so, there has been mismanagement on such a grand scale that one wonders how unlucky a club can be to have run into such problems so regularly. Chester have already been relegated once from the Football League and won promotion back, but they were relegated again last season and it seems unlikely that they will be able to repeat the trick. With the club’s current playing staff reportedly down to single figures and an embargo brought in by the Professional Footballers Association meaning that they cannot sign experienced replacements, their outlook looks bleak. The major question now is exactly how bleak this future will be.

    The club went into administration at the end last week, the final chapter in an agonising season during which they were the worst team in the Football League (they were kept from bottom place by Luton Town’s thirty point deduction). There is, however, a wider issue at stake here regarding the Football Association’s rather limp definition of who may be defined as being “fit and proper” to run a football club, since the club’s chairman, Stephen Vaughan, has a little bit of “previous” with regard to the mismanagement of football clubs. Supporters of Barrow AFC (who Chester may or may not - more on this shortly - be playing in the Blue Square Premier next season) may be forgiven for saying “we told you so”.

    Vaughan is a boxing promoter from Merseyside, and became involved at Barrow in the mid-1990s. Initially he was successful, and the club won promotion to the Football Conference in 1998, but Vaughan resigned as chairman after an investigation by HMRC into money laundering and his links with the Liverpool gangster and drug trafficker Curtis Warren. He reinstated himself when he was cleared of any involvement (it was said at the time that he had used security provided by Warren at his boxing events and acted as a middle man in his property deals, but drew the line at money laundering), but Barrow were already said to be in serious financial difficulties and Vaughan resigned as chairman and removed his financial backing in November 1998, although he retained his shares in the club.

    Barrow were liquidated in January 1999 (a new company, Barrow AFC (1999), was formed in its place) and were demoted back to the Unibond League at the end of that season, but their problems were only just beginning. They almost didn’t start the following season (indeed, they started the 1999/2000 season a month late), but this was a comparatively small problem next to the fact that Vaughan had transferred ownership of the club’s Holker Street stadium into the name of his company, Vaughan Promotions, as repayment for the money that he had poured into the club before this money ran out. The liquidator Jim Duckworth, however, smelled a rat and took him to court over it. In 2002, Holker Street was returned to the liquidators, who sold it back to the new directors of the club for £265,000.

    Vaughan turned up at Chester City in 2001, but immediately ran into controversy again when Chester were drawn to play Barrow in the FA Cup Fourth Qualifying Round. Since Vaughan still owned shares in Barrow, the FA threatened to expel both clubs from the competition, but Vaughan sold the shares in Barrow for a nominal sum to Bobby Brown, a painter and decorator, for £1 a couple of days before the match. He bought them back after the match (which Barrow won 1-0) and then sold them to the directors of the new company for £29,500, but his links to the club weren’t fully severed until the court found against him over ownership of the ground. The FA’s handling of the matter was widely criticised at the time, and it is a reflection upon the weakness of the rules regarding club ownership that Vaughan has remained in charge at Chester without censure.

    Vaughan’s time at The Deva Stadium hasn’t been without controversy. On the pitch, the Chester were successful again - having been relegated from the Football League in 2000, they were promoted back in 2004 - and Vaughan also oversaw improvements to their facilities. However, in February 2007 he was charged with violent conduct by the FA following an incident in the players tunnel after a match against Shrewsbury Town. In November of that year, the club held a minute’s silence for one Colin Smith, who was announced by the club as “a major benefactor” to them. Afterwards, however, it became clear that Smith was nothing of the sort - rather, he was the right hand man of Curtis Warren, and had been murdered outside a gymnasium in the Speke area of Liverpool in a gangland hit. Vaughan resigned as chairman shortly afterwards, but remains as the club’s owner and a majority shareholder. In January 2008, he was charged with fraud and deception in relation to car finance, and was cleared.

    In March 2009 and with Chester sliding out of the Football League again, it was announced that Chester had sold out to Liverpool based property developer Gary Metcalf. Metcalf (whose son, and you may need to read between the lines here, is a Liverpool-based boxer) was all but announced to have bought the controlling stake in the club, but at the start of April Chester supporters established that ownership of the shares had instead passed from Stephen Vaughan into the name of his son, Stephen Vaughan Junior, a twenty-four year old that had played fifty-eight times for Chester. Vaughan Junior had made seventy appearances for Liverpool reserves, but it would be stretching credibility somewhat to suggest that this would give him the means to run the club. Metcalf, who may or may not be linked to the Vaughans, is still said to be interested in the takeover of the club, but this has so far come to nothing. Vaughan Senior is believed to have said that he is owed between two and four million pounds by Chester City.

    What, then, does all of this mean for Chester City? Well, the involvement of the administrators could be good news for the club. If the Supporters Trust can lobby them stating that it is in the best interests of all concerned that the club’s ownership is passed to them, they could theoretically take it over. It isn’t, however, that simple. If, as many believe, the transfer of ownership of Chester City into Vaughan Junior’s name was to ensure that Vaughan Senior didn’t get an administration marker against his name when the club were declared insolvent, then it could be more complex than that. Indeed, if Vaughan Senior is the club’s biggest single creditor, then he will hold the ace hand in dealings with the administrator, and he may simply inherit the club again with its debts wiped clean.

    Chester supporters’ best hope comes in the form of the authorities. The FA is a broadly different beast to the one that allowed him to run roughshod over their own rules regarding club ownership in 2001, and the Football Conference are notoriously tough over insolvency. They have it within their powers (in a way that not even the administrators do) to shape the destiny of Chester City Football Club. The Football Conference has an agreement with the Football League that it will accept two relegated clubs per season, but they relegated Boston United straight into the Blue Square North and then into the Unibond League because of financial irregularities. Certainly Vaughan Senior’s previous run-ins with the game’s authorities and his associations outside of the game are unlikely to engender much sympathy within those running at the game. At best, Chester will start next season ten points behind everyone else, but things could yet turn out to get much, much worse for them before they get any better.


    Part 2: Chester's Summer Crisis Continues
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    It’s one step forward and two steps back for the long-suffering supporters of Chester City. They might have hoped (or even expected) that relegation back into the Blue Square Premier and a spell in administration might have been as bad as things could get, but the Football Association last week suspended the club’s license to play, forcing them to cancel their pre-season matches and throwing into doubt yet again the likelihood of their starting the Blue Square Premier season in three weeks’ time. Yet again, we have to look at the behaviour of Stephen Vaughan - one of lower division football’s more “colourful” owners - to see the reasons for the FA’s disquiet over goings-on at The Deva Stadium.

    The story seems to have started earlier this year when the legal ownership of Chester City Football Club was transferred from Vaughan into the name of his son, Stephen Vaughan Junior. Following their relegation from the Football League at the end of last season, Chester brought in the administrators, and it is this that seems to be the reason for the transfer of ownership of the club. The FA’s “fit & proper person” test may be weak and feeble, but anyone that takes a club into administration more than once is barred from being a club director. Vaughan circumvented this ruling - he wasn’t in charge, on paper at least.

    He did, however, remain their biggest single creditor and was able to call the shots with regard to the sale of the club via the administrators. Negotiations with a former Chester player, David Jones, had reached the advanced stage of due diligence before he was unable to reach agreement with the administrators. Vaughan then confirmed that he would buy the club back from the adminstrators with a CVA to pay 15p in the pound, meaning that Chester City’s other creditors would have to accept a tiny proportion of the money that they are owed. Vaughan himself would write off the debentures that he had put into the club, but whether this was an act of overwhelming generosity is something of a moot point. How, realistically, would Vaughan have got that money back by other means? Chester City have no significant assets, after all.

    With his new company in charge at The Deva Stadium, it seemed likely that a debt-free Chester City would start life in the BSP this season without too many major problems off the pitch. They have a new manager (Mick Wadsworth having replaced Mark Wright), and a ten point deduction isn’t insurmountable if they are seeking a season of consolidation this year. The Football Association, however, threw a spanner in the works at the end of last week when they refused to renew the club’s license for the coming season. As an unlicenced club, they are barred from playing until the FA’s concerns have been addressed. Their pre-season friendly at Marine on Saturday was called off and the club has since called off all of their other pre-season matches.

    Exactly what the FA’s concerns are is not yet known and Vaughan is bullish about the club’s prospects, stating that this is just a matter concerning some paperwork, but the fact that such a perfunctory piece of paperwork as a licence to play football has been refused by the FA is clearly of great concern. They clearly feel that something is wrong at The Deva Stadium. The Chester supporters seem split on the issue. Some are blaming the FA themselves, claiming victimisation. Others believe that Vaughan may have stretched the patience of the authorities too far. The truth will almost certainly out over the next few days or so, but if this is merely a problem with paperwork, why have the FA taken the drastic step of banning them from playing anybody? This is not an organisation that ordinarily rules with an iron fist when it comes to such matters, after all.

    It is not completely implausible that the FA have lost patience with the sleight of hand that seems to surround football club ownership these days. That Chester have entered into administration and emerged from it with the same owner that they had five months ago and without him having earnt a black mark for taking the club into administration is certainly perverse, and we should perhaps hope that this is the sort of loophole that the FA will seek to close over the next few months or so. If nothing else, the fact that this is what has come to pass at Chester shows up the weakness of the current regulations. There will always be those that seek to play the system. The FA’s most urgent issue at hand should be to make life as difficult as possible for these people.


    Part 3: The Taxman Bites Back
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    Upon first sight, it may seem surprising that a victory for the tax man should be greeted with the faintly audible sound of cheering in the distance but such was the mess that is Chester City Football Club that it feels increasingly as if their demise is the only way that the game will rid itself of their owner, Stephen Vaughan. The question of which Stephen Vaughan we are talking about is, of course, a moot point since his son took a directorship at the club earlier this year in place of his father. What has become increasingly apparent over the last few weeks is that the authorities have become increasingly impatient with the goings-on at The Deva Stadium, and the situation took a turn for the worse for the club’s supporters earlier this week.

    Since the club put itself into administration earlier this summer, there had been a hint that all was not what it might be at Chester City Football Club. This was most starkly exposed by the Football Association’s refusal to grant the club a licence to play, even in pre-season friendlies. The club thought that it had agreed an escape route to its insolvency with a CVA, but this was challenged by Her Majesty’s Revenues and Customs at court this week and, in a move that seems to demonstrates just how far down the line Chester are at the moment, HMRC won their case with an objection against the CVA at court on Wednesday. The club is now back in administration, without a licence to play from the Football Association and with just weeks to go before the start of the new season.

    What, then, were HMRC objecting to? Insolvency laws relating to Company Voluntary Arrangements are pretty specific, and HMRC lost their legal status as a preferred creditor several years ago. The amount believed to be owed by Chester City to HMRC was in the region of £1m. It’s a sizeable amount of money, and under normal circumstances it might have given HMRC a blocking vote against any proposed CVA (any creditor owed more than 25% of the total amount of money to be included in the CVA can block the approval of the arrangement). In the case of Chester City, however, there were £4m of other debts to be taken into account. The HMRC could vote, but they didn’t have a blocking vote in the case of the Chester City CVA. The arrangement was agreed at a creditors’ meeting on June 11th.

    So far, so good, then. Nothing illegal going on - a little side-stepping to get around the rules on insolvency and the ownership of football clubs, perhaps, but nothing we haven’t seen before. What was extraordinary, however, was this post on the Conference Forum yesterday morning. Could it be true that Chester City Football Club spent £143, 750 on services to a company called Hannah Industrial Services that was only formed in February 2009? A cleaning bill of over £11,000 per week? The cold feet of the Football Association and the blocking tactics of HMRC suddenly start to make a good deal more sense, as does Judge Pelling QC’s decision to revoke the arrangement. The 1986 Insolvency Act only allows two specific grounds for the revoking of a CVA - either the CVA unfairly prejudices the interests of a creditor or shareholder, or there has been some material irregularity at the shareholders’ or creditors’ meeting. The judge’s verdict, therefore, was a damning indictment of whatever has been going on at Chester over the last few months or so.

    Now is surely the time for Chester City supporters to admit that this club and this regime is nothing that they can conscionably be involved with. Their club may yet stagger and lurch into the new season, bloodied, bruised and carrying a hopelessly punative points deduction. They may not, though, and it’s difficult to see where their salvation will come from at this point. The timing couldn’t come at a much worse time, of course. Any new club in Chester would almost certainly have no league to play in for a year. As things stand, however, the existing Chester City club seem unlikely to be starting next season either. The time might be right for the club’s supporters to step back from their predicament and take control of their own destinies.


    Part 4: Minus Twenty-Five for Chester
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    Never let it be said that the FA and Football Conference never help out member clubs. If a story in this morning’s Liverpool Daily Post is to be believed, the beleagured Blue Square Premier club Chester City seem set to start this season, albeit with a twenty-five point deduction. Such a punative deduction will almost certainly mean that the 2009/10 season is another season of struggle for Chester, and likely relegation to the Blue Square North. What would happen to the club next would be anybody’s guess. For now, though, the Conference has spared itself it’s biggest nightmare - all twenty-four member clubs will at least start the new season.

    The alternative for the FA and the Football Conference would have been a refusal to allow Chester to start the new season, which would have almost certainly led to the closure of the club. This follows the initial refusal of the FA to allow the club a license to play this season (which led to the cancellation of all of their pre-season friendly matches) and a challenge to the club’s CVA by Her Majesty’s Revenues and Customs, which was upheld in court a couple of weeks ago. This situation remains unresolved - Chester City Football Club remains legally insolvent.

    The news is being met with a mixture of relief and anger by the club’s put-upon supporters. On the one hand, the sense of relief is obvious. The overwhelming majority of football supporters simply want to watch their club play, and their ultimate nightmare would have been for there not to be a Chester City to support. On the other hand, the feeling of anger is also understandable. Relegated from the Football League and now staring down the barrel of a second successive relegation, it is fair to ask how exactly they have benefitted from this series of events. The answer to that question is, of course, that none of the actions taken over the last few months at The Deva Stadium have been taken with their interests in mind.

    What, then is the immediate prognosis for the club? On the pitch, it looks pretty grim. Based on last season, they would need to win sixty-nine points in order to avoid the relegation. Based on the 2007/08 season, the news is a little better - sixty-seven points would be enough to keep them up. Based on the 2006/07 season, though they would need seventy-seven points in order to avoid relegation. This would be a tall enough order if it weren’t for the financial pickle in which they find themselves. How will the club be able to attract players to a club which has no chance at all of promotion and is sentenced to a relegation battle before a ball is kicked? “Money” is usually the answer to that question, but Chester don’t have any of that. At least, that’s the received wisdom on their financial position.

    The other question relating to their immediate position is how they can list the town to get behind the team. In Luton, a massive points deduction brought out the latent support, but Chester may prove to be a different matter. The city of Chester has long been held to be somewhat apathetic towards its own football club. There are a wealth of other footballing options in the immediate vicinity of Chester, from the Merseyside and Manchester giants down to clubs of similar size to Chester and smaller. In such a competitive marketplace, what is the justification for the floating voter to fall in behind Stephen Vaughan and the chaos at The Deva Stadium?

    For now, though, the speculation continues. The decision on whether the club would be allowed to start the season was delayed by forty-eight hours on Monday, and nothing official was forthcoming last night either. There are, of course, several different ways in which these delays could be interpreted, but few of them give much cause for optimism. The best that one can say about this is that the delay indicates that all sides are doing everything that they can to reach an agreement that allows the club to start the season. This, in turn, raises some uncomfortable questions for the FA and the Football Conference: considering everything that has happened at the club over the last six months or so - the transfer of ownership into someone else’s name, the CVA being challenged by HMRC and the challenge being upheld, the club’s seemingly perpetually crippled status - what exactly will it take for the authorities to draw a line in the sand, say “you are bringing the entire game int0 disrepute” and expel a club?

    This question isn’t meant as criticism of Chester City Football Club. Detractors of the non-league game point towards the seemingly perpetual financial crisis engulfing some of its clubs for ammunition, but the game’s authorities have a responsibility here, as well. To an extent, they have been back into a corner with regards to Chester. The timing of the events there over the summer meant that there was no opportunity for the supporters to start a new club and no opportunity for the Football Conference to rejig its constituent members so that Chester City could be ejected. However, should Chester City start the new season (and, further down the line, should they avoid relegation and the club get a CVA which sentences HMRC and their suppliers to a fraction of what they are actually owed - in other words, if Vaughan somehow wins), what message will have been sent out to those within the game and outside of it but looking in?

    It is difficult to escape the conclusion that it suits everyone’s vested interests for Chester City to start the new season. The Football Conference gets the twenty-four club league that it wants, the supporters get a team to support, the owners get another chance to push through the CVA that they want, and this is what will guide the decision that is made regarding their future. To an extent, the damage to the reputation of the non-league game has already been done. Another sticking plaster is applied, and everybody is happy - until, that is, the next Chester City comes along and the same thing happens again. For Chester’s supporters, another season is likely to start at Grays Athletic on Saturday with Vaughan still pulling the strings and events as far from their control as they ever have been. Perhaps the time has come for them to start considering a somewhat unpalatable question - what, exactly, is it that they are supporting?
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    As a Luton fan I can sympathise with Chester being screwed over by the clubs owners, directors, the FA and having to start on a minus number of points that almost certainly relegates you. I don't particularly like Chester as a club but it just shows how the FA in particular don't care about the effect these measures have on fans.
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    (Original post by pasta_man_beast)
    As a Luton fan I can sympathise with Chester being screwed over by the clubs owners, directors, the FA and having to start on a minus number of points that almost certainly relegates you. I don't particularly like Chester as a club but it just shows how the FA in particular don't care about the effect these measures have on fans.
    The FA haven't screwed over Chester, though. Or at least, they haven't screwed over Stephen Vaughan. By not acting to remove him, they've screwed over the fans, but the fans haven't exactly done much to save themselves either. Given the rules that the Conference have, Chester should not be starting the season. The Conference chose to breach their own rules to allow Chester to start (even with the points deduction). They'd previously been happy to demote Boston, Northwich, Barrow and any number of other clubs that had breached the rules. But because Chester happened so late in the close season, they chose to ignore it. The FA wanted to sort out the conference's breach before allowing Chester to play, hence the delay. In the end, they chose the solution that satisfied everyone's vested interests. Vaughan got his club, the conference got 24 teams.

    I did feel sorry for the fans, but after they cravenly allowed Vaughan to hijack their demonstration, I couldn't give a **** if they stay in business or not. If Vaughan and his cronies had been at my club and said those things, he'd have needed an ambulance or a police escort or both.
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    Curtis Warren lived across the street from my Auntie in Anfield.

    True story.

    Seriously though, if the powers that be can't stop Warren and his machenery then what chance do the FA?
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    (Original post by Arrogant Git)
    The FA haven't screwed over Chester, though. Or at least, they haven't screwed over Stephen Vaughan. By not acting to remove him, they've screwed over the fans, but the fans haven't exactly done much to save themselves either. Given the rules that the Conference have, Chester should not be starting the season. The Conference chose to breach their own rules to allow Chester to start (even with the points deduction). They'd previously been happy to demote Boston, Northwich, Barrow and any number of other clubs that had breached the rules. But because Chester happened so late in the close season, they chose to ignore it. The FA wanted to sort out the conference's breach before allowing Chester to play, hence the delay. In the end, they chose the solution that satisfied everyone's vested interests. Vaughan got his club, the conference got 24 teams.

    I did feel sorry for the fans, but after they cravenly allowed Vaughan to hijack their demonstration, I couldn't give a **** if they stay in business or not. If Vaughan and his cronies had been at my club and said those things, he'd have needed an ambulance or a police escort or both.
    I was referring to the 25 point deduction. I don't think such large point deductions help anyone. By giving such a deduction to a team I believe they are being screwed over. Also, I think the fans and the club are one and the same, you screw the club and you screw the fans. It's not fair that the club is screwed over and not the people who put them in this position. Admittedly, the situation with Luton was different and there were different factors to it but the main point is that the wrong people get punished and they are the fans.
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    TSR Support Team
    As others say it's the fans I feel sorry for, it's owners like that who should not be allowed near football, Steve Evans also springs to mind when I read all this.
 
 
 
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