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Leeds United Football Club Limited

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Leeds United Football Club, founded 4 May 2007, is a limited company, the directors of which are Ken Bates, Shaun Harvey and Mark Taylor. The company purchased Leeds United A.F.C., via a creditors vote, after the club entered administration but this ownership was challenged by HM Revenue & Customs and the club was subsequently put up for sale by the administrators KPMG.

Entering Administration

Leeds entered voluntary administration on 4th May 2007, thus incurring a 10 point deduction which confirmed the clubs relegation to League One. [1][2]. Administration had been predicted for some time, due to crippling debts created during Peter Ridsdale's chairmanship. For his part, Ridsdale denied any of the current situation was his fault,[3] only days after having admitted it was a mistake to allow David O'Leary to spend so lavishly on players[4]. Ken Bates, however, blamed Leeds financial situation firmly on Ridsdale and his board[5][6].

Bates is Back

KPMG Restructuring were appointed as administrators of Leeds United A.F.C, and within minutes of entering administration the club were sold to Leeds United Football Club Limited, owned by Ken Bates, Shaun Harvey and Mark Taylor [7]. Had the club not voluntarily entered administration, they would have been forced into liquidation on 25th June 2007 by Her Majesty's Revenue and Customs, to whom the club owed £6 million.

Future Ownership

On 6th May 2007 Don Revie's son Duncan announced that he was in the process of forming a consortium to buy the club saying "I've tried to ignore my feelings for a long time as I know the aggravation needed to put things right. But when things get this bad, I can't ignore it. My feelings run too deep. I am interested in trying to get Leeds back where they belong, which is in the top six of the Premiership. I've held talks with some influential people and the feedback has been good. I will be holding more talks in the next few weeks"[8][9] adding on 13th May 2007 that he would be calling Bates the following day regarding his bid[10]. Simon Morris has also launched a rival bid to Ken Bates worth £10 million in hope of the creditors and football league approving his bid above Ken's. The bid includes eventual plans to build a new 50,000 seater stadium as part of a 'world class leisure venue', as well as providing £25million in funds to stabilise the troubled club[11][9]. It has been revealed that a large amount of Leeds' debt is owed to many ex-players whom left up to three years prior to the club entering administration, £18 million of the £35m is however owed to three companys[12], and £6 million owed to HMRC[1] Following the announcement that the CVA would be heard and voted upon by the clubs creditors on 1st June 2007[13], the club's previous chairman Gerald Krasner has offered to represent the club's creditors free of charge to stop Bates from re-gaining control of the club, after it was revealed that each creditor would receive 1p for every pound they were owed if Bates' bid was successful[14]. The deal however contains a clause that this will rise substantially if the club attains promotion the Premiership within the next five seasons (before 2012-13)[15]. On 21st May 2007 32 of the 36 players in the Leeds squad agreed to defer their wages until the club had emerged from administration; the remaining four will be paid by the administrators[16]. On 23rd May 2007 Revie provided proof of funds backing his bid making three bids for the creditors to decide between[17]. Ken Bates has since stated that his bid will be the only one to save Leeds from annihilation[18]. On the day before the CVA, KPMG revealed that there were five offers in total on the table for Leeds United including, Bates', Morris' and Revie's, however KPMG stated they expected Bates' offer to be accepted[19]. On the 1st June 2007 75.02% of the creditors voted in favour of Ken Bates' bid, however it was so close a recount was scheduled for the following Monday. The meeting intended to decide the fate of the club was prolonged due to "heated objections" to the sale process and there was some debate on whether one of the four other bids would be better for creditors[20]. Simon Morris revealed on 2nd June 2007 that he was improving his offer to 40x that of Bates' in order to try and secure CVA approval in his favour, with creditors receiving 20p in the pound straight away and 20p in the pound over a set period of time. Morris' bid may be too late however, with a recount only being due on Monday and not another vote[21]. The recount ended in Bates' favour with 75.20% of the vote going his way meaning Bates now has full control of the club[22]. A period of 28 days still however hangs over the club, to allow any appeal against Bates regaining control to be lodged, and former Leeds director Melvyn Levi has hinted that this may occur[23]. This 28 day period also stops any player transfers from occurring[23].

CVA Challenge

One day before the 28 day period was due to end, Bates altered his offer to ensure his offer was not challenged. He altered the clause stating that if Leeds made the premiership in five years then the creditors would receive an extra 30p in the pound, extending this period of time to 10 years, and increased the amount they would receive from 1p in the pound to 8p in the pound straight away[24][25]. The 28 day period was due to come to a close on the 3rd July 2007 at 4pm (BST)[25]. With just minutes to spare HM Revenue & Customs challenged the CVA leaving a very uncertain future and possibly liquidation of the club[26]. Bates had previously stated "If there is a legal challenge, it could take two or three months to get to court and be decided. In the meantime, who is going to pay to run the club? So far it's been funded by the 'new Leeds', but if there is a challenge, the 'new Leeds' won't do it because it's a risk. The implications are that the club would close down. It would mean liquidation. Leeds United would cease to exist, and the loss of 500 jobs would be a further drain on government resources."[27] With the intention to challenge the CVA announced by HMRC, Simon Franks announced he was determined to buy Leeds United through his Redbus investment vehicle. He commented "We are absolutely committed to gaining control of Leeds United and to rebuilding the club, We have already told the liquidator that we will cover short term liquidity problems and that will be standing by our bid and will increase it given certain information. Our bid was significantly better than Ken Bates' and we are in a position to move very quickly if we are offered the right commercial terms."[28] Following the challenge by HMRC the club has been put up for sale by KPMG, with only offers before 5pm (BST) on Monday 9th July 2007 being accepted[29]. Former Leeds commercial director Adam Pearson has is set to make a bid for Leeds however Ken Bates has stated that he will take legal action if any other bid than his own is successful[30]. After the deadline had passed it was revealed that Simon Franks and Simon Morris had joined forces to bid for the club[31]. After Much deliberation KPMG revealed that once again they had chosen Ken Bates' bid[32].

RedCafe

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Notes

  1. ^ a b "Leeds Utd calls in administrators". BBC Sport. BBC. 04 May 2007. Retrieved 2007-05-04. {{cite web}}: Check date values in: |date= (help)
  2. ^ "Relegated Leeds in administration". BBC Sport. BBC. 04 May 2007. Retrieved 2007-05-04. {{cite web}}: Check date values in: |date= (help)
  3. ^ "Ridsdale: Stop Blaming Me". BBC Sport. BBC. 04 May 2007. Retrieved 2007-05-04. {{cite web}}: Check date values in: |date= (help)
  4. ^ "Ridsdale: I should have said no to O'Leary". ESPN. 30 April 2007. Retrieved 2007-05-04. {{cite web}}: Check date values in: |date= (help)
  5. ^ "Bates Blames Past Spending". Sky Sports. 4th May 2007. Retrieved 2007-05-05. {{cite web}}: Check date values in: |date= (help)
  6. ^ "Bates Issues Frank Assessment". Sky Sports. 7th May 2007. Retrieved 2007-05-07. {{cite web}}: Check date values in: |date= (help)
  7. ^ "Leeds United Football Club – KPMG Administrators appointed". KPMG UK News. 4 May 2007. Retrieved 2007-05-04. {{cite web}}: Check date values in: |date= (help)
  8. ^ "Revie Plots Leeds Takeover". Sky Sports. 6th May 2007. Retrieved 2007-05-06. {{cite web}}: Check date values in: |date= (help)
  9. ^ a b "Revie's son joins chase for Leeds". BBC Sport. 10th May 2007. Retrieved 2007-05-10. {{cite web}}: Check date values in: |date= (help)
  10. ^ "Revie's son pushing Leeds buy-out". BBC Sport. 13th May 2007. Retrieved 2007-05-13. {{cite web}}: Check date values in: |date= (help)
  11. ^ "Morris Makes Move For Leeds". Sky Sports. 9th May 2007. Retrieved 2007-05-09. {{cite web}}: Check date values in: |date= (help)
  12. ^ "Leeds' debts broken down". Sky Sports. 17th May 2007. Retrieved 2007-05-22. {{cite web}}: Check date values in: |date= (help)
  13. ^ "Statement". LeedsUnited.com. 16th May 2007. Retrieved 2007-05-17. {{cite web}}: Check date values in: |date= (help)
  14. ^ "Krasner fury at Bates' Leeds bid". BBC Sport. 17th May 2007. Retrieved 2007-05-17. {{cite web}}: Check date values in: |date= (help)
  15. ^ "Bates back at the helm". Sky Sports. 4th June 2007. Retrieved 2007-06-04. {{cite web}}: Check date values in: |date= (help)
  16. ^ "Leeds players agree wage deferral". BBC Sport. 21st May 2007. Retrieved 2007-05-21. {{cite web}}: Check date values in: |date= (help)
  17. ^ "Revie edges closer to Leeds bid". BBC Sport. 23rd May 2007. Retrieved 2007-05-23. {{cite web}}: Check date values in: |date= (help)
  18. ^ "Bates warning over Leeds future". BBC Sport. 29th May 2007. Retrieved 2007-05-29. {{cite web}}: Check date values in: |date= (help)
  19. ^ "Five consortia lodge Leeds intent". BBC Sport. 31st May 2007. Retrieved 2007-05-31. {{cite web}}: Check date values in: |date= (help)
  20. ^ "Recount for Leeds Utd sale vote". BBC Sport. 1st June 2007. Retrieved 2007-06-01. {{cite web}}: Check date values in: |date= (help)
  21. ^ "Morris makes late Leeds bid". Sky Sports. 2nd June 2007. Retrieved 2007-06-02. {{cite web}}: Check date values in: |date= (help)
  22. ^ "Bates regains Leeds Utd control". BBC News. 4th June 2007. Retrieved 2007-06-04. {{cite web}}: Check date values in: |date= (help)
  23. ^ a b "BBC Sport Player - Bates regains control of Leeds United". BBC Sport. 4th June 2007. Retrieved 2007-06-04. {{cite web}}: Check date values in: |date= (help)
  24. ^ "Leeds Utd creditors get more cash". BBC News. 2nd July 2007. Retrieved 2007-07-02. {{cite web}}: Check date values in: |date= (help)
  25. ^ a b "Statement". LeedsUnited.com. 2nd July 2007. Retrieved 2007-07-02. {{cite web}}: Check date values in: |date= (help)
  26. ^ "HM Revenue to challenge Leeds Utd". BBC News. 3rd July 2007. Retrieved 2007-07-03. {{cite web}}: Check date values in: |date= (help)
  27. ^ "Bates: Leeds could close down". Sky Sports. 4th July 2007. Retrieved 2007-07-04. {{cite web}}: Check date values in: |date= (help)
  28. ^ "Rival suitor eyes Leeds Utd bid". BBC News. 4th July 2007. Retrieved 2007-07-04. {{cite web}}: Check date values in: |date= (help)
  29. ^ "Debt-ridden Leeds put up for sale". BBC News. 6th July 2007. Retrieved 2007-07-07. {{cite web}}: Check date values in: |date= (help)
  30. ^ "Pearson set to make Leeds offer". BBC Sport. 8th July 2007. Retrieved 2007-07-08. {{cite web}}: Check date values in: |date= (help)
  31. ^ "Battle to buy Leeds intensifies". BBC Sport. 9th July 2007. Retrieved 2007-07-09. {{cite web}}: Check date values in: |date= (help)
  32. ^ "Leeds United resold to Ken Bates". BBC News. 11th July 2007. Retrieved 2007-07-11. {{cite web}}: Check date values in: |date= (help)
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