United Trust in battle for shares

A new logo and identity for the Trust in July 2004

The Carlisle and Cumbria United Independent Supporters' Trust (CCUIST) was formed in the spring of 2001 and publicly launched on May 8 2001 at the Sands Centre in Carlisle in front of an audience of 1,100.

Over 1,000 members joined in the course of the first 12 months, with fans paying £5 to join for a year and many also making donations to a special fund set up to acquire shares in the football club at a later date.

In the early months, the focus was on the removal of Michael Knighton as owner. This was achieved in July 2002 when John Courtenay finally agreed a deal with Knighton to buy the club and the popular Irishman took over the reins and immediately offered the Trust a 49% stake in the club, an offer unanimously accepted by the Trust's membership. At this point, United were in the hands of administrators and would remain so for months to come.

Alan Steel was elected to the board as the first fans' representative and took his place at the end of the 2002-03 season following the purchase of the first 20% of shares in March, with a downpayment of £100,000. The Trust were required to pay £400,000 for the first 20% and a further £400,000 for the second 20% batch.

Over 200 regular donors were contributing to the share fund at this point, and although various initiatives were raised to try and push up the level of donations, by early 2004, the Trust board were aware that efforts to raise the £400,000 required by the deadline of March 2006 were faltering. Therefore, when Courtenay approached the Trust for help to ease the club's continuing financial problems, a plan was devised whereby supporters and wealtheir investors could buy shares in the club's holding company with the voting rights on these shares retained by the Trust.

There were various legal difficulties with the plan as it was drawn up, and Alan Steel resigned during this difficult process, which ended up with the option of relinquishing the second 20% option being voted on by members at an SGM in April 2004. The vote went clearly in favour, and the Trust's board, now chaired by Kate Rowley agreed in principle to a new single target of 25.1% with Courtenay.

CCUIST changed its name to the United Trust in the summer and launched a new £350 for United initiative around the new target, which was a further £350,000 spread out over two or three years. This involves the construction of a special 'Wall of 1000' at Brunton Park with the names of all people donating a minimum of £350 appearing on plaques. Unfortunately no legal changes to this agreement were made before Courtenay sold the club to local property developer Fred Story in July last year.

Under the terms of the existing 49% agreement, the Trust had a veto over any change in ownership. They met Story at the end of July and endorsed his ownership. Story agreed to draw up amendments to the 2003 agreement to finalise the new share targets. He also agreed to donate £1 for every £1 donated by Trust members, in order to halve the amount of money needed to reach the new 25.1% target.

Unfortunately, Story reneged on this promise sometime after he formally acquired the club and replaced the Bristol & West finance house as the club's major creditor, with a £2m mortgage to be secured on Brunton Park.

The Trust were invited by him to approach other possible donors and a few weeks later local businessman Brooks Mileson, the chairman of Gretna FC, agreed to do the £1 for £1 scheme, and made an immediate £25,000 donation into the fund. There was still no formal amendment to the existing share agreement despite various approaches by Kate Rowley to Mr Story.

At this stage, the Trust had received a modest increase in share donations, backed by Mileson's generous £1 for £1 pledge. However there was still a significant shortfall on the required target for the 2006 deadline that was still in place. In November, Mileson offered to make a £600,000 donation to the Trust to acquire the first two share options in the existing agreement. With progress on amending the agreement having stalled, the Trust accepted the offer and informed Story of their intentions to acquire 40% of the shareholding, under the terms of the 2003 agreement.

At this point Story went into the public domain with his objections, stating that the fundraising required would harm the club and that the existing agreement contained a flaw that would prevent the Trust from ever owning more than the 20% maximum allowed under the first share option.

Subsequently, the Trust initiated legal action to back their right to acquire a 40% holding, and Story has not to date agreed to abide by the agreement, and still claims there is a flaw in it. Through the media, he has offered a 40% holding, but to be dilutable to 25.1% by the issue of new shares, which it appears will not be offered to the Trust.

In the wake of the club's promotion back to the Football League, both sides are endeavouring to bring an end to the dispute and meetings are planned for the summer months to put off the prospect of a costly court hearing and reach a compromise over shares. Story has asked for the Trust's right of veto to be removed and has not been receptive to the Trust's request for an extra board representative. Solicitors for both sides are in contact and are confident a satisfactory conclusion to the dispute is now within sight.

For more information on The United Trust, and to join and also make online donations, visit the Trust's website: