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A legal challenge against the re-sale of Leeds United to Ken Bates could have 'disastrous' consequences for the Elland Road outfit, according to a leading insolvency practitioner. The club's players return to pre-season training today as the countdown for the new season begins, but the next few days could have a major influence on the ten months ahead. United remain in administration, weighted down by the transfer embargo placed on the club by the Football League, and the immediate flow of new players into Elland Road is entirely dependant on Bates' attempt to buy Leeds back from the administrators. The end of the club's two-month period in administration and the lifting of the transfer embargo rests initially on securing undisputed approval from the buy-back agreement between Bates and administrators KPMG. KPMG have set tomorrow as a deadline for dissatisfied creditors to contest the Company Voluntary Arrangement (CVA) proposed by Bates and Leeds United Football Club Limited. Expectations of a legal challenge from Her Majesty's Revenue and Customs, who stand to lose around £7 million in tax, have grown following repeated calls from Yorkshire MPs for tax officials to fight the terms of the CVA. Tax officials are said to be angry at the terms of the agreement, which will pay them around £77,000 of the £7 million they are owed. A second group of local creditors are also considering whether to lodge an appeal in the High Court, and one source close to the group described the chances of a challenge as '50-50'. Mark Howell, a partner with Manchester solicitors George Davis, says the prospect of legal action would create severe problems for Leeds and could threaten to leave the club in administration when the League One season kicks off on August 11th. Howell has warned that a delay in exiting administration, which could happen as early as next week if Bates' deal is allowed to proceed, would wreck the recruitment plans of manager Dennis Wise, and raise serious doubts over who would finance summer transfers while the club's future ownership remained undecided. He said: "I would be amazed if a legal challenge was decided before the start of the season. As a lawyer you want to see due process but I am a Leeds supporter and this would leave the club in a state of limbo. "The situation would be disastrous for Leeds United, or any club at this stage of the year. How would they sanction signing new players, and who would pay for them? "The administrators could take it upon themselves to sign players but it's difficult to know whether they would want to do that while the outcome of the legal challenge remains uncertain. The same goes for Ken Bates or any parties who were interested in buying Leeds last month." _______________________________________________ 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 Join The Leeds United Supporters Trust at www.lufctrust.org
