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From BBC Football:
The club have appealed against the sanction imposed by the Football League and their case will be heard at a special meeting of all league clubs.
Doubts had been raised over Leeds' future after the club failed to agree a Company Voluntary Arrangement (CVA).
The Football League accepted there were "exceptional circumstances".
But in making their decision, it was stressed they could not allow Leeds to operate outside the strict rules concerning administration.
Leeds are back under the control of Ken Bates after administrators KPMG sold the club to him for an undisclosed sum.
The CVA would have allowed Leeds to pay off an acceptable amount of their debts to creditors.
"The Football League Board agreed that, notwithstanding the manner in which this administration has been conducted, the club should be permitted to continue in the Football League," said a statement.
"Consequently, the board has decided to make use of the 'exceptional circumstances' provision within the League's insolvency policy, for the first time, and agreed to transfer the club's share in The Football League to LeedsUnited 2007 Ltd. Accordingly, the club's share has now been transferred.
"However, it is acknowledged the club did go into administration and has been unable to comply with the terms of the League's well-established insolvency policy.
"As a result, the board determined this transfer of membership should be subject to Leeds United having a 15-point deduction applicable from the beginning of the 2007/08 season."
Football League chairman Lord Mawhinney met with both KPMG and Bates, telling them to change the CVA, which governs how much creditors will get.
Leeds have lodged an appeal against this sanction, which will be heard at a special meeting of all League clubs, to be arranged in due course.
A club statement said: "The club has received an amount of criticism from supporters for not keeping them up to date with developments during what has been a very difficult time for us all.
"We appreciate this policy was difficult for fans to accept, but please be assured that this has been done in the best interests of Leeds United, which is justified by the return of the share.
"We are now planning the appeal and we are able to complete the squad rebuilding for the 2007/08 season, albeit with only one week to go before our first League One game at Tranmere."
The Football League said yesterday it has received further details from the administrator, KPMG, about the sale of Leeds United to a new company, Leeds United 2007 Ltd, owned by the Cayman Islands-registered Forward Sports Fund and chaired by Ken Bates.
The League has so far refused to sign over its "golden share" of membership to this new company, which was not bought via a Company Voluntary Arrangement (CVA) agreement of creditors. In all, 41 other Football League clubs have collapsed into insolvency since the Premier League was formed in 1992, and in every previous case, the League has insisted on a CVA being agreed as a condition of transferring its golden share to the new owners.
Ken Bates is now asking the League to treat his company as an exception. Leeds United is at an impasse, with KPMG having sold the assets to the new company, but the League insisting that the players' registrations are still held by the old company until the golden share is transferred to a new owner. As doubts still hang over the club's future, David Conn and Matt Scott pose 20 significant questions about the ownership and running of Leeds, KPMG's handling of the administration, and what happens now.
1 Why did Leeds collapse into insolvency and administration in the first place, with debts of £35.5m, given that Ken Bates, and his solicitor and fellow Leeds United director Mark Taylor, had said during 2006-07 that the club would be in a dramatically better financial position once the season was over and the contracts of high-earning players would come to an end?
2 How did Leeds come to owe £17.7m to three offshore companies, Astor Investment Holdings (registered in the British Virgin Islands), Krato Trust (Nevis Island, the West Indies), and the owner of the club, Forward Sports Fund (the Cayman Islands), and how did the club spend that money?
3 Why was KPMG in such a hurry to sell Leeds United immediately back to the new company, which is also owned by the Forward Sports Fund and chaired by Bates, for 1p in the pound, when the administrators of other clubs have spent months running clubs and publicly seeking the best possible deal for creditors?
4 Who are the owners or beneficiaries of the Forward Sports Fund, Astor Investment Holdings and Krato Trust, and why have they chosen to register their companies in offshore tax havens where they are not legally required to declare their identity?
5 If Leeds United's owners are the anonymous people behind the Forward Sports Fund, how can the Football League be satisfied they pass its "fit and proper person test"?
6 Why have Astor and Krato agreed to waive any repayment of their huge debts so long as the club was re-sold to Forward and Bates, arguing, according to Taylor, that they had faith in the management of the club?
7 Leeds United's 2006 accounts stated that Astor did have "an interest" in the Forward Sports Fund, then at the creditors meeting on June 1, Taylor stated that the interest had been severed last December. How was this done, why, and what evidence was given of it to KPMG?
8 Why was the previous connection between Astor and Forward not mentioned in KPMG's first report to creditors, nor any explanation given of how the connection had been severed?
9 The 2006 accounts also stated that Patrick Murrin, the former Guernsey accountant, Chelsea director and representative of the large, anonymous offshore shareholding in Chelsea during Bates' time in charge, had "an interest" in the Forward Sports Fund. What is Murrin's interest in Forward?
10 The 2006 accounts stated that a company of which Murrin is a shareholder, Rivoli Limited, also registered in Nevis Island, had been paid £186,000 in "consultancy costs" during the year. What consultancy services did Murrin, and Rivoli Ltd, provide to Leeds United Football Club during 2005-06?
11 Why did KPMG allow Forward's and Bates' new company to receive the money for Leeds United season tickets - the company agreeing to refund the money if the club went bust - even though the company has not, still, been granted Football League membership, in apparent contravention of FA rules?
12 How has the money, around £4m, received from the 10,000 season tickets which the club say they have sold to their long-suffering fans, been used?
13 KPMG says it did "extensive work" to verify the claims of money owed to Leeds United creditors, while HM Revenue and Customs challenged the CVA, which narrowly approved the first sale, on the grounds of "material irregularities", arguing partly with the levels of debt claimed. So how much investigation did KPMG carry out into the club's debts?
14 Why did the club owe their own company Yorkshire Radio, of which Bates and Taylor are also directors, £480,000, and why was this debt first revealed only in the final voting at the creditors meeting, not in the initial statement of debts issued by KPMG?
15 When KPMG responded to HMRC's legal challenge to the CVA by announcing it was selling the club again, this time without going through a CVA, why did it give bidders less than three working days to make their offers, and no access to detailed financial information?
16 On what basis did Bates and Forward win the bid for the club the second time, and how did their offer beat those of other bidders, and why did KPMG agree to sell the club without being satisfied that the League would grant this company the "golden share" membership of the League?
17 Why has Forward's and Bates' new company not paid the players for the month of June?
18 What did KPMG actually sell to Forward's and Bates' new company if, as the League insists, players' registrations remain with the old company until any new company is awarded the "golden share"?
19 Why have Bates and Taylor apparently not yet obtained the permission of a court to act as directors of the new Leeds United Football Club Ltd, as required by s216 of the Insolvency Act, because both were directors of a company with the same name, which went into liquidation last year?
20 Why should the Football League make an exception for Leeds and grant Forward's and Bates' new company its "golden share" of membership despite the purchase not having been done via a CVA, given that the League has insisted on the CVA process for all 41 of its other clubs which have fallen into insolvency since 1992?
From BBC Football:
The club was put up for sale on Friday by administrators KPMG, who are looking at the offers submitted on Monday.
Leeds chairman Ken Bates has an offer on the table, while investment firm Redbus and property developer Simon Morris have submitted a joint bid.
KPMG's Richard Fleming said: "We are evaluating the expressions of interest and will make a further announcement."
Ex-Hull owner Adam Pearson is also believed to have put in a bid before the deadline of 1700 BST on Monday, which was set by the administrators.
Redbus chairman Simon Franks told BBC Radio Leeds: "The risks are huge and that's why so few people have bid.
"I think that Simon Morris has come to the same conclusion.
"We had a very frank conversation and I told him my reservations that we knew we were utterly committed to the club going forward and I wanted to hear that from him.
"And I have to say he is utterly committed to getting Leeds United back into top flight football."
Bates plans to take legal action if the club is sold to a rival bidder.
He re-submitted his offer after a legal challenge was made by HM Revenue and Customs (HMRC) over his original takeover plans.
The 75-year-old said: "Our bid is the original deal that was done in the meeting of creditors when we placed the Company Voluntary Agreement (CVA) on1 June.
"We have amended it twice to try to meet the Inland Revenue's objections and now we have withdrawn the conditionality of it, so it's now unconditional.
"We believe in fact our offer is valid. Therefore it should be the only one to be accepted."
Leeds have debts of £35m, including the money owed to HMRC in unpaid taxes, and Bates had proposed to take the club out of administration by repaying creditors eight pence in every pound that it owed.
Franks claims only Bates has been allowed full access to the club's accounts in recent months.
"I'm furious. This is utterly prejudicial. We have to reduce our bids because of the 'known unknowns'. Mr Bates doesn't have to," said Franks.
"We don't know what we are bidding for."
Pearson, who left Hull in June after selling the club to a consortium fronted by Paul Duffen for £10m, is expected to make a formal approach along with Internet guru Peter Wilkinson.
Duncan Revie, son of former Leeds manager Don, has also previously declared an interest in buying the Yorkshire club.
See also: Supporters Trust Demands Action
From Guardian Football:
A statement on the Yorkshire club's website said that the tax authority had confirmed its opposition to the planned re-sale of the club to Bates.
"The club can confirm that the Inland Revenue have served notice of their intentions to challenge the CVA (Company Voluntary Agreement)," said the statement.
"We do not have all the details as yet and do have a number of options available to us," the club added. "We remain confident of a positive outcome despite this disappointing news and will carry on with business as usual in the meantime."
Creditors had until 1500 GMT on Tuesday to contest the CVA proposed by Bates.
The Revenue lodged its appeal at the High Court around an hour before this deadline, which marked the close of the 28-day statutory period granted to creditors to contest the plan.
The Revenue lost over 7.0 million pounds ($14.11 million) in unpaid tax when Leeds went into administration on May 4 with debts of 35.0 million pounds.
Bates, the former Chelsea chairman who bought Leeds in January 2005, had initially regained control of the club when 75.2 per cent of creditors approved his plan to offer them just one pence for every one pound owed.
He improved that original offer by eight times in an attempt to head off a potential challenge. The improved offer would have given the Revenue an improved payment of 600,000 pounds instead of the 77,000 pounds afforded it by the original plan.
The Revenue's decision casts further doubt on the immediate future of the Elland Road club.
So long as administrators KPMG retain control of Leeds, manager Dennis Wise is unable to begin the process of rebuilding a team preparing for life in the third tier of English football for the first time in their 87-year history following their relegation last season.
A Yorkshire MP has called on the Serious and Organised Crime Agency (SOCA) and the Serious Fraud Office (SFO) to probe the involvement of anonymously-owned offshore companies in forcing through the resale of Leeds, which had gone into administration, to a company represented by Ken Bates - even though it was claimed they had no connection with the club chairman.
Phil Willis, a Leeds United fan and Liberal Democrat MP for Harrogate and Knaresborough, is highly critical of the way Leeds went into administration with debts of £35m and then was immediately resold to the same owners on the same day, subject to approval by creditors.
The deal was voted through by creditors last week after they were told by the administrator, accountancy firm KPMG, that offshore companies with a key stake in the club would only accept Mr Bates's offer despite other bids for the club offering a greater return on money owed.
Mr Willis, who has used the device of an early day motion in the Commons to raise what happened at Leeds, said: "What puzzles me is that within 24 hours what was an unsaleable portfolio became a potentially highly profitable portfolio. I think that requires some examination.
"It's not unreasonable for fans and certainly creditors to know who are the people who are writing off these large sums of money and on what basis."
Mr Bates responded yesterday by calling Mr Willis "stupid".
A club statement issued later added: "We challenge him to repeat his allegations outside the House of Commons and we will see him in court if he does."
The early day motion urges SOCA "to investigate whether criminal activity including money laundering has taken place" during the financial turmoil at Leeds.
Mr Willis is concerned about the general lack of transparency in football, including transfer dealings, and also uses the motion to call on the Government to make it a criminal offence for those involved in the ownership of football clubs not to openly declare their interest.
At the heart of the issue is Leeds' largest creditor, Astor Investment Holdings, registered in the British Virgin Islands, which effectively played a controlling hand during the club's recent administration by refusing to support any other survival package other than that put forward by Mr Bates.
As a result of it and another offshore company, Krato, registered in Nevis in the West Indies, using their block vote, both companies lost virtually all their combined investment in the club of more than £15m because the offer to creditors from Mr Bates was just 1p for every pound they were owed.
The offer was voted through at a creditors meeting earlier this month, leaving Mr Bates with a potentially profitable club now permanently divorced from its £35m debt which could be attractive to a would-be buyer.
Astor also blocked attempts to put a clause into the company voluntary agreement, the mechanism used to re-emerge from administration, which would stop Mr Bates from reselling the club for a period of five years or pay a penalty to creditors. Instead, the club could be resold in six months.
With other bidders for the club offering more money to creditors, the actions of Astor and Krato were questioned by a significant number of creditors who specifically queried why Astor and Krato would agree to give up so much money and whether there was any connection between them and Mr Bates.
KPMG told creditors it had received a letter from Astor, which had taken on Krato's debt of over £2m, saying it was not connected to Mr Bates who in turn, along with his long-term business associate, Mark Taylor, had provided sworn statements that they were not connected to Astor.
But during the creditors meeting it transpired that Leeds United's last company accounts included a direct reference to Astor having "an interest in Forward Sports Fund", the club's owners and the company Mr Bates represents, as of June 30 last year.
The administrator admitted the link had not been known, but Mr Taylor told the meeting: "There was an association on June 30 ; there isn't now."
Hundreds of small creditors lost out as a result of the deal the administrator agreed with Mr Bates but the biggest loser was the taxman, with £7m lost in unpaid taxes.
Mr Willis's motion calls on HM Revenue and Customs to take action to recover the debt and questions the role of KPMG, specifically why they didn't "ascertain the beneficiaries" behind Astor and Krato during their investigations in the administration period.
All creditors have 28 days from the day the deal was voted through to challenge the outcome but HM Revenue and Customs have so far declined to say what action, if any, they will take.
A spokesman for KPMG said: "As far as we are concerned there are no concerns about money laundering and if we had concerns we would report them in the normal way."
The MP also raises the similarities in ownership between Chelsea and Leeds, which both had significant involvement from offshore companies and, questioning whether they were connected to Mr Bates, calls on the Financial Services Authority (FSA) to investigate.
The FSA did investigate the ownership of Chelsea after Mr Bates sold the club to Russian billionaire Roman Abramovich in 2003 but ultimately took no further action. It found that Mr Bates did not own shares in the offshore companies but couldn't reach a conclusive view as to whether Mr Bates had any degree of control over them.
The FSA, SOCA and the SFO all said they could not comment last night.
From BBC Football:
After putting the club in administration with debts of £35m on 4 May, Mr Bates required 75% of creditors' votes to buy the club back.
The recount showed that 75.2% of creditors backed his plans to offer them just 1p in the £1 of debts owed.
His plan faced strong opposition at Friday's meeting, with some creditors backing rival offers.
"I am satisfied that, in voting to accept this proposal, the creditors have approved a solution that allows the club to plan ahead for next season, reduced uncertainty for all those with an interest in Leeds United, provided some return to creditors and avoids liquidation," said joint administrator Richard Fleming of KPMG.
The administrators said last week that there were five consortia who had proved they had the funds in place to buy the stricken Yorkshire club.
While KPMG refused to say who were Mr Bates' rivals, local property developer Simon Morris and Duncan Revie, son of former manager Don, had lodged an interest.
The Football League issued a short statement, "noting the decision" of Leeds' creditors to approve the proposed Company Voluntary Agreement (CVA).
"The League has confirmed to the administrator that conditions must be satisfied before the League board can consider transferring the club's share in The Football League to the new company," it read.
"These conditions include the need for all 'football debts' to be settled in full."
The League will make no further comment during the 28 days it will take for the CVA to be formalised.
During the 28-day period any creditor who wishes to dispute the sale can pursue the option of taking the matter to court.
"The important thing now is we make progress," said Mr Bates.
"There's been a suggestion of challenging what has happened, but you can't challenge for the sake of challenging, you have to have a reason.
"If someone decides to challenge what's happened they will affect the running of Leeds United - and we will take them on because we want to move forward."
Mr Bates, formerly owner of Chelsea, arrived at Leeds Utd in January 2005, when he bought a 50% stake.
The club went into administration last month, a move that meant it was docked 10 points which ensured its relegation to League One.
Leeds Utd's financial problems stretch back several years. In 2001, Leeds reached the semi-final of the European Champions League, however, despite spending millions on players, the club failed to qualify for the competition in the following seasons.
This failure to qualify led the club to rack up huge debts. In October 2003, Leeds reported a pre-tax loss of £49.5m for the year to 30 June 2003, which at the time was a record annual deficit for a Premiership football club.
From BBC Sport Football:
Ken Bates, who put the club into administration on 4 May with debts of £35m, needed 75% of the votes of creditors to win control.
The original count showed he had 75.02% of the vote, administrators KPMG said. The recount is scheduled for Monday.
Mr Bates has offered to repay 1 pence for every pound of the club's debt.
Funds in place
The closed meeting had been prolonged because of "heated objections" to the sale process, the BBC learned.
It is understood there was some debate on whether one of four other consortia would be better for creditors.
All five consortia have proved they have the funds in place to buy the stricken Yorkshire club, KPMG said.
But Mr Bates was clear favourite to emerge victorious from the meeting.
KPMG has refused to identify the five would-be investors ahead of the company voluntary arrangement (CVA) meeting.
But local property developer Simon Morris and Duncan Revie, son of former manager Don, have lodged an interest.
Mr Bates was forced to call in the administrators on 4 May prior to the final game of the season, a decision which confirmed their relegation to League One.
The club is £35m in debt and the Inland Revenue has issued a winding-up order because the club has an unpaid bill of £7m.
And the balance sheet revealed a £10m cash injection was required to keep the club alive.
But with the approval of administrators KPMG, the club were immediately sold to a newly-formed company, Leeds United Football Club Limited, of which Mr Bates is a listed director.
Joint administrator and KPMG Restructuring partner Richard Fleming said: "While we have marketed the business and secured alternative offers for the club, we have also had to advise creditors that more than 25% of the creditors by value have informed us that the deal on the table, to sell the club to the newly-formed Leeds United Football Club Ltd, is the only proposal they will support.
"Given a CVA proposal requires the support of 75% of creditors by value, this would appear to make it difficult for any other offer to be successfully progressed."
Amid the wreckage of Leeds United, in the appalling, familiar list of those left unpaid by another bust football club, sits an organisation which does not even charge for its services, just asks clubs to contribute towards expenses. Nevertheless, there it is again, in the £35m mountain of debts which Ken Bates's Leeds is not paying: St John Ambulance, owed £165.
At what is expected to be an angry creditors' meeting on Friday, the administrator, Richard Fleming of accountants KPMG, is proposing that Leeds be sold to a new company headed by Bates, in return for a payment of only 1p for every pound of debt. That proposal is backed by the three anonymously-owned, offshore companies who claim collectively to be owed £17.78m. If it is passed, St John Ambulance will be given £1.65 and will still be expected to turn up again next season to tend to the Elland Road injured.
Other organisations which will suffer the same fate, contained in a tightly-typed, 25-page list of creditors produced by the administrators, include suppliers of all the basics to a football club: local schools, hospitals and universities, the gas, electricity and water utilities, and Leeds City Council's leisure department, which is owed £124,121.
The speed with which the deal to sell the club was done, and questions about the identity and motives of the offshore companies, have infuriated many people in Leeds, a city now deeply embarrassed by the car-crash plight of its only professional football club. Bates, despite being a belligerent and unabashed chairman, is not even officially a shareholder; Leeds United is owned by the Forward Sports Fund, registered at a Cayman Islands PO box, with a Swiss-based company Chateau Fiduciaire named as its director. Bates's solicitor, Mark Taylor, has described Bates as Forward's "UK representative", the closest Bates comes to ownership of the club.
On May 4, the same day that Leeds were placed in administration, Fleming announced the deal to sell the club for 1p in the £1 to a new company, of which Bates and Taylor are directors, again owned by the Forward Sport Fund. It will have to pay what are known as "football creditors" - players and other clubs owed money - in full if the club is to be allowed to compete in League One next season, but all other debts will be all but wiped out.
Forward, according to club records cited in the administrators' report, paid £4.5m to take over Leeds in January 2005 from the previous owners, a group of local businessmen chaired by the insolvency accountant, Gerald Krasner. Forward now claims it is owed £2.419m, loaned in the failed attempt to keep the ailing club in business.
One of the two other offshore companies, Krato Trust, registered at a PO box in Charlestown, Nevis in the West Indies, claims to be owed £2.5m, having lent the club £2.25m between December 2005 and June 2006. Astor Investment Holdings, registered at a PO box in the British Virgin Islands, with an office in another tax haven, Guernsey, claims to be owed £12,839,309, having loaned the club £11,285,269 between August 2005 and October last year.
Both Krato and Astor Investment have told the administrator they have no connection to Bates, Forward Sports Fund or any other director of Leeds. Fleming told me his firm had made "fairly extensive inquiries" to confirm there was no legal connection between them and said, in fact, the owners of Astor were unknown.
Krato and Astor have stated that they have no connection with Forward or Bates. Nevertheless they have agreed to the proposal to sell the club to Forward for 1p in the pound, even agreeing to reduce the amount they will receive. Astor has agreed to write off half its claim if creditors approve the sale, while Krato has agreed to accept nothing at all.
Asked why the two anonymously-owned offshore entities should agree so dramatically to write off millions of pounds put into Leeds, in return for a sale to a new company in which they state they have no interest, Fleming said: "At the time we agreed it, there were no other offers. Maybe they had football in their hearts and wanted the club to survive."
The proposals need 75% of creditors to agree, so the offshore companies can block any alternative because their debts amount to 45% of the total. However, the transfer of the club is not expected to proceed without a storm. Several creditors have said they intend to challenge the administrator, demanding to know who is behind Astor and Krato to see proof they are not connected to Bates, and ask for solid evidence of the money the offshore trusts claim to have put in. Krasner, the former chairman, has offered to represent creditors free of charge to challenge the sale to Forward for what he describes as: "A derisory offer to creditors, people who have supported Leeds through thick and thin."
After a season in which Leeds were relegated, often watched by a depressed, half-full Elland Road where adult ticket prices averaged about £35, there is not a great popular appetite for Bates retaining control. Rick Duniec, chair of the Leeds United Supporters Trust, says:"Our main concern is to see our club restored to health, and it seems quite a widespread opinion that people want a change to more local ownership."
Leeds, a city which has been thriving economically, still has no major venue capable of hosting concerts and Elland Road has long seemed an obvious site for development, especially if it had a thriving modern football club at its heart. United's debt-laden collapse since the team reached the 2001 Champions League semi-final is infamous enough, but the detail of the last three years, chronicled in the administrator's report, still makes shocking reading.
Krasner and his consortium took over in March 2004, with £95.5m of the debts taken on by the former chairman, Peter Ridsdale, and his board written off. Krasner's consortium sold Paul Robinson, Alan Smith, James Milner, Mark Viduka, Elland Road, the Thorpe Arch training ground and, for £5m, an option to develop Elland Road, but still could not stem the club's losses.
In January 2005, with the Inland Revenue pressing for payment of £1.2m, the consortium sold the club to the Forward Sports Fund. Bates became the chairman and the offshore companies put their millions in, yet despite reaching the play-off final in 2006, selling Rob Hulse and Matthew Kilgallon, and receiving £4m compensation from Chelsea for two youth players, Tom Taiwo and Michael Woods, Leeds continued to haemorrhage money. The administrator's report does not make clear why that happened. Creditors piled up and last month HM Revenue and Customs issued a winding-up petition. Leeds owe almost £7m in unpaid tax and VAT.
It will be a surprise if the taxman accepts 1p in the pound, and with ordinary creditors likely to challenge too, the club's destiny appears to lie with the decision on Friday of two opaque funds, registered in the West Indies and BVI.
St John Ambulance, though, is unlikely to involve itself in any rows. The charity has tended not to make a fuss and avoided public statements, as it has been left unpaid, time and again, by football in its boom time.
Wages still owed to several former players including Michael Ricketts, Paul Butler, Eirik Bakke, Steve Stone and Jermaine Wright
Money still owed to Danny Mills, who last played a competitive match for Leeds in May 2003
Owed to New Burley Window Cleaners
Owed to Leeds Metropolitan University
Owed to Boo's Disco of Bramhope in Leeds for the hiring of mobile discos
Owed to the West Yorkshire Ambulance Service
From To Ell And Back, by Tim Whelan.
The statement reads 'At 3.15pm on Friday afternoon, Leeds United Association Football Club Limited was placed into Administration. Richard Fleming, Mark Firmin and Howard Smith of KPMG were appointed as Joint Administrators. The appointment will result in the immediate deduction of 10 points from the Club's current points tally in the Championship pursuant to the Regulations of the Football League. This means that next season the Club will play in League One, but with no further points deducted.
Shortly after the appointment of the Administrators, the business and assets of the Club were sold to a new company Leeds United Football Club Limited (Leeds) whose investors have been introduced by Ken Bates. The sale is subject to creditor and Football League approval before the beginning of the new season. In the meantime Leeds will complete its season at Derby on Sunday and will continue to operate it's conference and banqueting and retail businesses as normal.'
Ken Bates commented on the official site 'The financial burden of the past finally pushed the club into Administration following the issuing of a winding up petition by HM Revenue & Customs who will be one of the Company's major creditors. The other parties who will suffer the biggest financial loss are institutions from which the Board arranged funding, Astor Investment Holdings, Krato Trust and Forward Sports Fund who collectively will lose in excess of £22.0m.
The shares in Leeds United Football Club Limited are owned by Forward Sports Fund who would welcome serious investors to help make this club financially strong again. The action taken brings to an end the financial legacy left by others that we have spent millions of pounds trying to settle but the important thing now is not to view this as the end, but the beginning of a new era.'
On the face of it, it seems odd that Ken Bates is able to sell the club to himself while attempting to wipe off a huge portion of the debt, but it's understood (as much as anything is clear in the murky world of Leeds United) both Astor and the Forward Sports Fund are also Bates companies. In retrospect, it's probably a good thing that we did fail to beat Ipswich on Saturday, so this decision can now be taken! If we had beaten the Suffolk mob, Bates might have been tempted to delay administration till next season, leaving the possibility that we might still have gone down and then suffered the ten point deduction next season.
The sale of the club is subject to approval by its creditors who will meet before the end of May to consider a Company Voluntary Agreement, whereby they would forgo some of their debt. The Football League would also need to approve the sale. A statement from KPMG revealed the club had debts 'totalling approximately £35 million, with a cash injection of approximately £10m required to continue trading.
KPMG also revealed that Her Majesty's Revenue and Customs recently issued a winding-up petition for approximately £5m and had this debt not been paid by June 25 the club may have been forced into liquidation. They went on to say that 'This agreement has been reached quickly to maximise the possibility of survival of this major football club, to minimise uncertainty for all the club's stakeholders and supporters and to allow the club to plan ahead for next season. There is now a big decision for the creditors to make at their forthcoming meeting.'
Leeds were all-but relegated to League One on Saturday after a 1-1 draw with Ipswich, leaving them three points adrift with only one game left. The club's second relegation in three years could lead to serious financial implications.
Leeds sold Elland Road and their Thorp Arch training ground in November 2004 to avoid going into administration.
Meanwhile, chairman Ken Bates has given his backing to manager Dennis Wise, despite the expected drop into the third tier of English football. Wise took over as boss from Kevin Blackwell in October but was unable to halt the club's dip in form.
Bates told the Yorkshire Post: 'Dennis has done a much better job than many people realise. We were in a much worse position when Dennis came in than people know about. Some of the difficulties he inherited cannot be made public but there were real problems in the dressing room. The playing side was in complete disarray.'
Leeds will be relegated on Sunday unless they score a hatful of goals to beat Derby and Hull City lose at home to Plymouth.
From Unofficial Leeds United:
Leeds could go into Administration
Breaking news today that Leeds United could go into Administration by the end of this week. A crisis meeting is being held at Elland Road at the moment following the sides virtual relegation on Saturday.
Leeds were effectively relegated on Saturday, drawing with Ipswich whilst Hull took three points at Cardiff - the result left Leeds three points away from safety but with a goal differnce of -9 against Hull. The club is now meeting to discuss the crisis.
If we go into adminsitration, we understand that the club will lose ten points from NEXT season, as well as a possible fine and further punishment of playing behind closed door. more news as we get it....
From Team Talk:
Leeds meeting to discuss future
Leeds were holding a board meeting at Elland Road on Monday to discuss the future of the club after relegation was all-but sealed on Saturday.
Leeds' 1-1 draw with Ipswich, combined with Hull's win at Cardiff, left Leeds three points adrift of Hull with only one game left and a goal difference deficit of nine.
BBC Radio 5 Live on Monday morning reported that a well-placed source had told them the club could go into administration within a week.
But Leeds chairman Ken Bates, who took over the club in January 2005, did not appear to be considering such a move when telling the Yorkshire Post that today 'we will start the first day of the 2007-08 promotion season.
'We can have a complete clean out and start again. It is time to look forwards, not backwards.'
Leeds, who sold Elland Road and their Thorp Arch training ground in November 2004 to avoid going into administration, are facing an Football Association investigation into the pitch invasion that marred the end of Saturday's match.
But an FA spokesman said on Sunday that the club is highly unlikely to face a points deduction.
The group, headed by Norman Stubbs, appear to be the club's last chance of staying clear of administration.
'A successful conclusion to the transaction depends on negotiations with a number of third parties,' said a statement from the consortium.
'We expect that these negotiations will take approximately seven to 10 days.'
Stubbs' proposed offer depends on whether he can successfully negotiate renewed terms with the club's major creditors, in particular the Inland Revenue, Customs & Excise, the bondholders and a number of former players and managers still being paid by the club.
Leeds, currently around £25m in debt, still owe around £3.5m to the Inland Revenue, and last month defaulted on a £1.2m payment.
The Revenue could choose to serve a winding-up order on Leeds, with Stubbs representing the last hope of averting such a prospect, and with it administration.
Chairman Gerald Krasner said 'We have the right to buy it back at any time at a pre-arranged formula,' 'It is a bit like a house - you either rent it or own it but the main thing is you live in it'. 'I am hopeful that in a few years we will have re-established the club, have got some more backing and be able to buy the ground back,' said Krasner
Krasner says the the individual who has bought the ground only wants his rent paid and that is all he is interested in. He has not said why 'the individual' has remaind un-named
Leeds United and a local consortium, headed by businessman Norman Stubbs, have already reached advanced talks and chairman Gerald Krasner claims once again to be confident of finalising a deal soon. 'I'm hopeful of this,' he added. 'After 13 failed attempts of consortiums producing money, these are local business people who have plans for the future.
'It is more important than anything that they are die-hard Leeds United fans.
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The BBC Football website reports Leeds have been warned by a consortium bidding to buy the club that its £25m takeover offer is the only realistic way they can keep Elland Road. Sebastian Sainsbury confirmed the bid is being discussed at a board meeting.
'The board has two options - the option we have put forward or that of selling Elland Road, the pride and joy of Leeds United for the past 85 years,' he said.
'They have to make a decision in the best interests of the shareholders, the players and particularly the fans.'
The club have been drastically reducing their debt since relegation from the Premiership at the end of last season, selling their big-name players, Leeds have also recently sold their Thorp Arch training ground and the club are set to receive a £5m windfall when they sell land close to Elland Road for a casino development.
The current Leeds board took charge last March and have since reduced crippling debts from more than £100m to just over £30m.
Chairman Gerald Krasner had earlier said that the club was 'continuing to negotiate with various parties' - but no statement would be issued until after Thursday's meeting.
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Toellandback website (rivals link below) reports Leeds now have to face a vital fixture against dangerous opposition in the shape of the Inland Revenue, but Gerald Krasner has reassured supporters the directors have got the situation in hand.
The club are faced with a tax bill of almost £9 million relating to deductions from staff wages (PAYE), including the playing staff, which is bound to raise concerns among supporters.
Debts at Elland Road are still believed to be in excess of £40 million, despite cost-cutting measures. Krasner, however, insists the tax bill dates back to before the present board assumed control at Elland Road and is something that is being dealt with. Negotiations between the club and the Inland Revenue have been successful, and Krasner said: 'This is nothing that has just come at us out of the blue. We have been aware of this because it relates to PAYE, in other words deductions from wages. I can assure supporters that there is nothing to be concerned about. The situation has been dealt with and we are moving forward as normal.'
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Following fears that the ground could fall into the wrong hands fans have launched a plan to raise £10m in an effort to buy the Elland Road Stadium. 'What better landlord to have than loyal Leeds United supporters?' said Leeds United Supporters Trust spokesman John Boocock. 'This would protect the club, supporters and the local community from any speculation as to the future use of the ground as well as raise much-needed cash for the new owners to meet their current commitments.
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There is speculation that Leeds United will have the Kraaner-Consortium installed by next-Monday reports Ell and Back website
As far as I'm concerned it's non-stop work with the lawyers, just as it was over the weekend,' Gerald Krasner revealed on Monday. Throughout the weekend, it was speculated that at long last, Mr. Krasner and co would be Leeds United's new-owners. Some press reports are even suggesting that the consortium could be unveiled in time for next Monday's televised visit from Manchester City.
Whether that is the case remains to be seen. Meanwhile Mr.Krasner also spoke-out regarding rumours that Ken Bates is involved with the consortium.
Having been forced to reveal that the grossly unpopular ex-Bradford chairman Geoffrey Richmond had acted as an advisor to the group, regarding Mr. Bates, Krasner said: 'I can categorically deny he is not involved.'
The ex-Chelsea chairman was reportedly interested in buying Sheffield Wednesday, but, he recieved a hostile resistance at Hillsborough.
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One of the groups expected to make an offer to take over Leeds has announced they will not make a bid for the club.
The consortium, fronted by former Huddersfield chairman Terry Fisher, reluctantly concluded it would not be making a bid.
The news comes 24 hours before the latest deadline imposed by the club's creditors and leaves just one group in the running.
The BBC report that negotiations between the remaining group, the club and the creditors have been ongoing for the past five weeks and it now appears as if they will be given the green light.
'Things are progressing and we're further on than we were last week,' said Gerald Krasner, the second consortium's representative.
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The BBC reports that Bolton-based businessman Ian Curry hopes his consortium will launch a bid for Leeds United 'by the end of the week'.
The consortium, which includes ex-Leeds star Trevor Cherry and former Huddersfield chairman Terry Fisher, has emerged as a potential buyer.
Curry told BBC Radio Leeds: 'We are all very interested in making sure Leeds survives.'
He added: 'The group includes a number of Leeds businessmen and we are working towards a timescale of the end of the week. None of us are in the business of wasting our time.'
The group has spent the last few weeks working with corporate finance experts Zeus Capital to put together a rescue package. We have the funding in place and we are not far off from making a bid 'The figures we've been hearing are around the £25-30m mark to take care of the existing creditors and provide some working capital going forward.
'The people we have got involved have a track record of being very successful in business and can assist the club.
'There's been a lot of sleepless nights and we're not doing that for the fun of it. We're all interested in making sure that Leeds survives.'
Richard Hughes, co-founder and a director of Zeus Capital, believes their funding is '100% equity and not repayable'.
'We are extremely serious about finding a solution that is in the best interests of the club and providing sufficient funding for it to go forward rather than backwards,' added Hughes.
'We are looking at the process of what the funding requirement is, but we have the funding in place and we are not far off from making a bid.
'We know it is in our interests to do something sooner rather than later.'
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Leeds United have confirmed they are at an advanced stage in their talks with a consortium of Yorkshire businessmen wanting to take over the club.
Leeds currently have until midnight on 26 January to secure a deal to stave off administration.
Now it appears that the necessary bid which failed to materialise on 19 January could finally be on the horizon.
Negotiations are said to be being conducted through solicitors as the consortium wishes to remain anonymous until a deal is done.
The group, thought to come from Leeds' Jewish community but not linked to former deputy chairman Allan Leighton, is said to have offered £20m for the club.
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The Board of Leeds United PLC have announced that the Company's principal finance creditors have agreed to extend the standstill period by a further week, to midnight on 26 January 2004.
This agreement also provides for a further two week extension to 6 February 2004, conditional on achievement of certain financial and other covenants.'
This will give Leeds 7-14 days to find the funding to keep the club running until the end of the season.
The Leeds Rivals website reports
With new-buyers or investors looking remote, the onus now appears to be asking the players to accept a wage-deferral of around 30%. It is widely reported that Leeds are having ongoing talks with the PFA about this.
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Leeds United have been given six-weeks by their creditors to 'sort out' their finances according to the rivals site (link below) Leeds Utd are expected to confirm the story soon.
It is reported that United's chief-executive Trevor Birch has bought the club a precious few-weeks by managing to persuade United's creditors to give the club until mid-January to try and sort their financial problems out.
Although seen by some as a 'last chance', it is expected to buy Leeds some time to step up their search for new investors.
Deputy Chairman Allan Leighton is expected to step down so that he can invest a reported £2.2m in a new-shares issue.
'We have a consortium ready if things go to plan and the main target is to avoid administration.
'Reports that I am waiting for Leeds to go into administration are wrong. I am not a vulture.'
However today's move is bound to increase speculation that Leeds may be forced to sell in the January transfer-window to raise funds!
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Leeds United have revealed they could be forced into administration if talks with their creditors break down. The troubled Premiership club were hoping to announce a restructuring of their £80m debts following negotiations with their major creditors.
But Leeds have failed to reach a satisfactory conclusion so far with the American bondholders to whom they owe almost £60m, and a Guernsey based finance company who helped fund player purchases to the tune of £21m.
Leeds, who announced a British club record £50m loss for the last financial year, confirmed to the Stock Exchange on Wednesday morning that they 'may be forced to seek the protection of an administration order'. That would be a preliminary step to protect themselves from the prospect of creditors attempting to wind the club up.
Leeds, who have caretaker boss Eddie Gray in charge, are bottom of the Premiership. Their financial plight will almost certainly prevent them from making a move for Southampton manager Gordon Strachan. Any move for Strachan would mean a compensation payment to the Saints of about £1m. Relegation from the Premiership, and with it the loss of television income, has already led to forecasts that the club could go out of business.
Leeds' failure to reach agreement with their creditors has forced them to postpone plans to accept a £4.4m cash-for-shares injection from deputy plc chairman Allan Leighton and oil-rich Sheikh Abdul din Mubarak Al-Khalifa.
The statement to the Stock Exchange outlined Leeds' desperate attempts to stay afloat. It said: 'The directors have been negotiating the first phase of a complex debt restructuring of the group's finances with its principal finance creditors to provide the group with additional working capital and to give it time to implement a more permanent restructuring plan. 'We also referred to a commitment through a share issue to inject £4.4m from Allan Leighton and ARM Holdings Group Ltd. Unfortunately, after a long period of constructive discussions, negotiations have failed to reach a satisfactory conclusion. As a result, it has been decided not to go ahead with the planned subscription for shares. Nevertheless, the company continues to be in constructive discussions with a view to providing additional working capital and to give it time to implement a more permanent restructuring plan. But, if the negotiations referred to above are unsuccessful, the directors may be forced to seek the protection of an administration order.'