A former Bank of Scotland boss who borrowed money to invest in Dunfermline Athletic Football Club is facing financial ruin.
A company belonging to former Pars chairman Gavin Masterton has been placed in an “irretrievable financial position” which, he said, will inevitably lead to his personal bankruptcy.
In a joint statement released on behalf of Charlestown Holdings Ltd (CHL) and Mr Masterton as its sole shareholder, it was confirmed that a petition to wind up CHL has been placed before the High Court in Edinburgh.
The action has been raised by Christopher McBay, a current director of Dunfermline Athletic and also a previous director of the club prior to October 2012.
It relates to a failure by CHL to repay an undisclosed loan Mr McBay made to CHL in 2010 some of which was immediately invested in Dunfermline Athletic with the responsibility for repayment, with interest, by August this year resting with CHL.
The statement revealed that the petition will not be defended by CHL as a previous offer to spread the payments to meet the debt due to Mr McBay in full over a revised period has been declined by Mr McBay’s appointed legal representative.
The statement said CHL has outstanding debtors, the monies due from which would have been used to settle the debt due to Mr McBay if this action had not been progressed.
Mr Masterton, who is a former managing director of the Bank of Scotland, said: “In addition to the value my company, CHL, has had taken from it over the past two years, I inherited substantial guarantee commitments that, when agreed, were taken on willingly and in good faith on behalf of the DAFC.
“I saw such commitments as being part and parcel of the responsibilities that came with being the major shareholder and reflected the vision all of the then directors shared in creating what we regarded as being one of the best football stadiums in Scotland.
“During my stewardship, the club was also one of the most successful in Scotland and I only look back with pride at the many visits to Hampden Park and numerous other high spots we all enjoyed over the years.
“Perhaps the only upside of the whole sorry debacle associated with the administration of DAFC was that the football club could remain a going concern with possibly the best opportunity to move forward under new stewardship.
“However, that in no way compensates for the stress that my family and I have been subject to for an extended period of time.
“It is also highly disappointing to see long-term friendships cast aside because of what went on in the lead up to, during, and since the administration of DAFC,” he said.
“The administration of DAFC resulted in CHL, and my family, having to write off around £9 million of its combined investment in the football club.
“The action by Mr McBay has therefore made what was already a very difficult overall trading situation wholly untenable and has resulted in an irretrievable financial position for CHL.
“This will also inevitably lead to my personal bankruptcy.
“This matter is now one for the courts and as such further comments, questions or even idle speculation would be inappropriate.”
Mr McBay, who is managing director of Guitar Guitar Ltd, a retailer which supplies guitars and musical instruments throughout the UK and Europe, could not be contacted.
Dunfermline Athletic declined to comment.