THE former owner of Dunfermline Athletic has admitted he faces financial ruin.

Gavin Masterton said a petition to wind up his company, Charlestown Holdings Ltd (CHL), in the High Court of Edinburgh would not be defended.

The legal action relates to a failure by the company to repay a loan to current club director Kip McBay and “has resulted in an irretrievable financial position for CHL”.

Mr Masterton added it would “inevitably lead to my personal bankruptcy”.

Earlier this month, Mr McBay petitioned the Court of Session requesting that CHL be “wound up by the court and an interim liquidator appointed”.

Mr Masterton is the sole shareholder in the company, which owned Dunfermline Athletic until the club’s financial problems ended in administration last year.

The former managing director of the Bank of Scotland said this had cost the company and his family around £9million.

The loan from Mr McBay was originally made to CHL in 2010 and Mr Masterton said some of the money was immediately invested in the football club, with the loan due to be repaid by August 2014.

It was not repaid and 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, on behalf of CHL and Mr Masterton, added, “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 added, “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 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.” He continued, “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.

“The administration of DAFC resulted in CHL, and my family, having to write off around £9million 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.” Meanwhile, the legal dispute over the Pars’ training ground at Pitreavie is now due back in court in December.

The club wanted to evict the Pars Trust, a charity set up by Gavin Masterton, from the site after a row over who should control it.

Fife Council own Pitreavie, Dunfermline Athletic signed a 60-year lease in 2002 and a sub-lease was later given to the trust. The Pars train there and the trust operate the site through a management contract with LK Galaxy.

The club gave the trust six months’ notice that the sub-lease would be terminated – that was due to expire last week – but the court action was postponed.

In Dunfermline Sheriff Court last Friday the case was put back for 12 weeks.

A club spokesman said, “It’s been continued. The matter is being dealt with by the legal process.”