The details of the legal battle engulfing York City have been revealed.
YorkMix broke the news last week that former owner Jason McGill was suing York City Football Club Ltd for alleged breach of contract.
Now the particulars of claim have been opened and the nature of the dispute is laid out.
Mr McGill’s Malton-based company JM Packaging Ltd (JMP) owned a 75% stake of York City and loaned the club several million pounds between between 2007 and 2022.
JMP’s lawyers Andrew Jackson Solicitors say that the majority of these loans were paid off, mostly by the £7 million sale of former ground Bootham Crescent to housebuilders Persimmon Homes.
However, £1 million in loans remained outstanding. That was reduced to £650,000 when JMP sold its 75% stake to the York City Supporters’ Trust for £350,000 in 2006.
Mr McGill agreed to waive any interest on those loans. But, according to JMP’s legal case, a compromise agreement was drawn up.
In this, the owners of the club agreed to repay the £650,000 if and when it met certain agreed financial targets. These targets included increased ticket sales and transfer fees that accrued from the club’s move to its new stadium.
That agreement was originally brokered with the supporters’ trust but was then transferred to the new owners – first, Glen Henderson and now 394 Sports Ltd, co-owned by Matthew Uggla and Julie-Anne Uggla.
According to JMP’s lawyers, no repayments have been made. And with the end date for that agreement – April 2026 – approaching, JMP is suing the club for breach of contract.
The High Court claim says if the £650,000 is not repaid, interest on two loans from 2006 and 2010 would be legally due to JM Packaging, which could total as much as £4.2 million.
However, a report in The Times says: “The Ugglas’ view is that McGill received what was owed to him when Bootham Crescent was sold for £7million.
“Not least because they also believe he received a seven-figure sum from the sell-on fee for the former York defender Ben Godfrey when he moved from Norwich City to Everton in 2020.”
Godfrey made the £25 million move from Norwich to Everton in October of that year.
The Times report says that by Matt and Julie-Anne Uggla’s calculations, “York were due a sell-on fee of £1.9million plus VAT. It is their understanding that three payments related to that sell-on fee, totalling nearly £1.8 million, were made to JMP, including a payment in 2022 when McGill was no longer a shareholder”.
The paper also reports that the Ugglas’ lawyers “will argue that the 2007 and 2022 loan agreements, as well as the 2022 compromise agreement, are unenforceable because McGill breached FA rules by signing these documents on behalf of both his company and York City without independent oversight”.
YorkMix understands that JMP’s lawyers will argue that the money from the Godfrey transfer was paid to York City FC and used to reduce the debts.
In a statement on behalf of JMP, Rob Ripley of Andrew Jackson Solicitors said: “The details of the loans made by JMP to the Club were set out in the Club’s annual accounts filed at Companies House.
“Any payments made to JMP by the Club related to repayment of those loans. Neither JMP nor Mr McGill personally ever received dividends or other financial benefit from the Club.
“The Club’s filed accounts show that it had healthy net assets of more than £3.5 million for the year ended 30 June 2022 (shortly before Mr McGill sold his interest in the Club and ceased to be a director).
“Mr McGill remains a loyal and committed supporter of the Club, as he has been over many years.”
The full legal statement is in the panel below.
Matt and Julie-Anne Uggla have yet to comment. But a statement issued by York City employees supported the owners, who have led a turnaround in the club’s fortunes after years of sporting decline.
City sit second in the National League, having already scored 100 league goals this season, and are battling with Rochdale for the one automatic promotion spot.
In a statement today, Matt and Julie-Anne Uggla said: “We remain fully committed and dedicated to the future success of YCFC.
“We will not be commenting on the recent Times article, as we firmly believe that Mr McGill was paid in full by the club.
“We are committed to YCFC to strengthen its foundations, support its growth, and build lasting success.
“We will continue to invest in the club with a clear vision of creating a sustainable organisation that can stand independently and thrive for years to come.”
JMP legal statement
Statement from Rob Ripley of Andrew Jackson Solicitors on behalf of JM Packaging Limited (JMP):
JMP provided significant loans and funding to the Club during Mr McGill’s ownership of the Club between 2007 and 2022. It is with deep regret that JMP has been forced to issue a claim against the Club for non-payment of the sum of £650,000 due to it.
The details of the claim are set out in the Particulars of Claim, which can be obtained from the Court file.
The Club has not yet filed a Defence and it would be inappropriate to comment on ongoing litigation or the confidential settlement agreement which is the subject of that litigation. However, JMP and Mr McGill acted on the legal advice of their former solicitors and do not understand that there are any proper grounds to suggest that any agreement with the Club is unenforceable or that Mr McGill breached his fiduciary and statutory duties to the Club in providing it with loans and other funding.
The details of the loans made by JMP to the Club were set out in the Club’s annual accounts filed at Companies House. Any payments made to JMP by the Club related to repayment of those loans. Neither JMP nor Mr McGill personally ever received dividends or other financial benefit from the Club. The Club’s filed accounts show that it had healthy net assets of more than £3.5 million for the year ended 30 June 2022 (shortly before Mr McGill sold his interest in the Club and ceased to be a director).
Discussions with HMRC in relation to any corporation tax due from the Club’s subsidiary Bootham Crescent Holdings Ltd on chargeable gains from the sale of Bootham Crescent remain ongoing and are separate to the dispute with the Club over its non-payment of the sum due to JMP.
Mr McGill remains a loyal and committed supporter of the Club, as he has been over many years.
