http://www.yorkshirepost.co.uk/leeds?articleid=2857083
By Richard Sutcliffe KEN BATES insists Leeds United can finally move on from the damaging financial legacy left by previous regimes following yesterday's dramatic events. The administrators were called in by the club's directors at 3.15pm amid debts of £35m. The balance sheet indicated an injection of £10m was needed to keep United alive. A winding-up petition had also been served on the club by the Inland Revenue over an unpaid bill of £5m. The move meant Leeds were immediately relegated from the Championship courtesy of the 10-point deduction that the Football League impose on any club that goes into administration. KPMG Restructuring was appointed as the administrators at the request of the club's directors and within minutes, they had agreed to sell the business and its assets to a newly-formed company called Leeds United Football Club Limited. The directors of this company are listed as Ken Bates, (United chief executive) Shaun Harvey and (United director) Mark Taylor. The Yorkshire Post received confirmation the deal had gone through at 3.27pm via a statement from KPMG. The sale is subject to approval by its creditors via a Company Voluntary Arrangement (CVA), which if agreed will see creditors foregoing a significant element of their debt. The creditors meeting will be held before the end of May and the Football League will also have to approve the sale. Astor Investment Holdings, Krato Trust and Forward Sports Fund, the three institutions from which Bates's board arranged funding, are owed a total of more than £22m – making them by far the biggest creditors. Bates said: "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 £22m. "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 so that we can mount a challenge to firstly gain promotion from League One and, ultimately, arrive back in the Premiership. "Since January 2005, we have sought additional investment and have followed up every approach received but refused to deal with unnamed consortiums represented by third parties, if indeed they ever existed. "To avoid timewasters, we have always required proof of funds first, whereupon they often disappear. "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. "It is my intention to contact all the club's members to tell them of our plans going forward and season tickets will soon be available. "The club is staying at Elland Road. We must unite together behind the club and take on all those in front of us." Richard Fleming, joint administrator and KPMG Restructuring partner, said: "We were asked by the board of directors to advise Leeds United on Monday April 30, 2007. "The club has experienced significant financial difficulty for some years and was burdened with historic debt and wage structures. "It was necessary for the club to enter administration as its balance sheet dated March 31, 2007, indicated debts totalling approximately £35m, with a cash injection of approximately £10m required to continue trading. "Further, Her Majesty's Revenue & Customs recently issued a winding-up petition for approximately £5m. If this debt had not been paid by June 25 2007, the club may have been forced into liquidation." The timing of the brief stint in administration was key in terms of United's prospects in League One next season with the club incurring the points penalty this time around. John Nagle, the head of communications for the Football League, said: "Following confirmation that Leeds United have obtained an administration order, we can confirm that the club has been deducted 10 points from its 2006/07 tally. "Given the recent reduction in the numbers of clubs resorting to insolvency proceedings, it is disappointing Leeds United have had to seek the protection of an administration order." Nagle confirmed that the necessary parties had already started the process of getting Leeds back on track. He added: "Discussions have already begun aimed at establishing how Leeds United intend exiting administration. "This will have to include complying with the League's insolvency policy under which all 'football debts' must be settled in full." _______________________________________________ the Leeds List is an unmoderated mailing list and the list administrators accept no liability for the personal views and opinions of contributors. Leedslist mailing list [email protected] http://list.zetnet.co.uk/mailman/listinfo/leedslist The Leeds List - "where never is heard a discouraging word..."
