Vote on '˜Golden Share' proposal set to decide York City's operating status

The Minstermen, sitting fourth in National League North, are chasing promotion back to the fifth tier after a horrendous couple of years that brought back-to-back relegations.

This week, however, it is off-field matters dominating thoughts at Bootham Crescent.

Thursday’s special general meeting will see 910 Trust members vote on a ‘Golden Share’ proposal to hand the body’s shares, held since 2006, back to the club in return for the continued financial support of McGill’s JM Packaging company.

This backing, providing the Trust members vote ‘yes’ to the proposal, would continue until York’s new 8,000 capacity stadium at Monks Cross, due to be completed in time for the 2019-20 season, is built.

In the event of a ‘no’ vote, however, McGill will stop covering losses at Bootham Crescent, which in the last available accounts for 2015-16 stood at around £700,000 for the year.

York will then have to operate on a “break-even” basis unless outside investment can be found.

McGill, in a question-and-answer session organised by the Trust, said: “The club would need to be operated on a break-even basis. Unless additional sources of funding could be identified, it is perhaps inevitable that this would require the club to make substantial cuts both on and off the field and would be unable to retain its Football League infrastructure.

“It is highly likely that the cuts required to the playing budget would result in the club only being able to operate on a part-time basis.”

McGill’s JM Packaging company first became involved with York in March, 2003 when, in conjunction with the Trust, the club were brought out of administration.

At the time the Trust held an 85 per cent shareholding and JM Packaging the rest. The current shareholding make-up has stood since 2006 when Trust members voted in favour of the change in return for JM Packaging providing £1m funding to take the club through to the new stadium’s scheduled opening date of 2011.

Since then numerous delays have hit the Monks Cross project, but work did finally start last December.

If Thursday’s meeting votes ‘yes’, the Trust will lose their current right to receive management accounts and authorise future borrowing. The body will also surrender their entitlement to representation on the club’s board.

Under the proposal – which needs a simple majority to be passed – McGill has clarified how the proceeds of Bootham Crescent’s sale will be shared between the club’s creditors.

The City of York Council are entitled to £2m, which is covered by Football Foundation funds in respect of the loan taken out to buy the ground back from former directors Douglas Craig, Barry Swallow and Colin Webb. Interest from that loan, around £400,000, will be paid from the sale.

Craig, Swallow and Webb are also due £125,000 for their remaining stake in Bootham Crescent Holdings, whose other minority shareholders are entitled to £80,000.

Only then will JM Packaging receive back any of its £4.3m loan to the club, which is interest free. Any surplus money will go to the club.