OPEN LETTER
Leeds United Opportunities
United chairman Ken bates(FUKK chelsea) this week wrote to all Season Ticket
holders, Members, lapsed Season Ticket holders from 2006/07, lapsed Members,
and current and lapsed corporate clients.
For those of you that haven't received a letter, here is a copy....
Dear Leeds Club Member August 2007
I have delayed my usual pre season letter until the outcome of recent events
was resolved.
I can understand if you feel frustrated by the lack of information coming
out of the Club but negotiations on many fronts have been both delicate and
confidential. Unfortunately information given to fans is picked up by the
media and we are then at the mercy of individual media reporters and editors
who sometimes interpret (or in some cases misinterpret) a story according to
their views or prejudices.
Only now do I feel comfortable in informing you of the position and it will
be a long letter because you should know of the many aspects of the recent
past including many parties, plots, intrigue and much more.
THE ADMINISTRATION (CVA)
KPMG were advised throughout by Walker Morris the Leeds based Insolvency
Lawyers as well as two Senior Barristers. In view of several press articles
and comments by the Football League it is essential to state that all
parties behaved properly at all times. The common desire was to save Leeds
United and stop the taxman's attempt to close it.
In view of the behaviour of certain parties with hidden agendas, KPMG
decided to invite fresh offers but at the end of the day the offer from the
Forward Sports Fun ('FSF') was still the highest and best.
After the original creditors meeting there is a period of 28 days for
anybody to object. The taxman objected at 3pm on the last day just before
the court closed.
At the insistence of the League, KPMG tried very hard to meet the Taxman's
objections and the negotiations were conducted at the highest level. The
first demand/condition was that all monies from FSF to KPMG should be paid
upfront. That was agreed. The second demand was that the Football Creditors
should not get preference and be paid any more than anybody else. This was
an impossible demand. If Leeds didn't pay the Football Creditors in full
then the Club didn't get membership of the League. We were between the devil
and the deep blue sea. Damned if we do, damned if we don't. The Taxman then
proposed that a sum equal to that going to the Football Creditors be paid
into the general pool for all Creditors putting them in a better position.
FSF agreed. The Taxman then refused to withdraw their appeal and further
stated officially that they would vote against any other proposal if
Football Creditors were ever paid in full. Indeed they stated that they
would oppose any further CVA when Football Clubs were involved. Clearly this
is an impossible situation.
What really irks the Taxman is that until 2003 they got preferential
treatment in any insolvency. Now they don't. That is not Leeds fault or that
of the League.
Finally, we believe that the actions of the Taxman were illegal. In the case
of Wimbledon the very question of the Football Creditors was challenged in
the High Court and the Taxman lost on Appeal.
Secondly, Newcastle United won in the High Court against the Taxman because
of their refusal to allow VAT on Agents' fees as a deduction. Despite
losing, the Taxman still submitted a huge claim for VAT on Agents' fees
which was illegal. The Taxman is questioning the validity of some creditors'
claims. They do not have clean hands in this matter. This dispute is not
about Leeds United, it is about opposing the Football League's Rule that
Football Creditors must be paid in full.
ALTERNATIVE BUYERS
At the time of buying the Club from the Administrators, FSF promised to talk
to any other would be purchasers with a view to any possible cooperation. We
did the best we could. This is a summary of what did or did not happen.
1. DUNCAN REVIE - Did not and has not made any offer at all. Neither has he
contacted me or any other Director.
2. SO CALLED AMERICAN INVESTMENT FUND - One phone call and they have not
been in contact since. Absolutely no discussion.
3. REDBUS - Mark Taylor, a lawyer, had one meeting and one phone call. No
proposal.
4. SIMON MORRIS - He made contact through a middle man. We informed him to
call us direct. We weren't prepared to negotiate through a third party. We
haven't heard from him. In the newspaper it was reported that in buying
Leeds it would be part of a £500/600 million pound development in the
surrounding area. Unfortunately (for him) he doesn't own the land and Leeds
citeh Council have put it out to possible public tender.
He also employed two PR companies to run a dirty tricks campaign against me
which backfired. We obtained a background memo, a copy of which is enclosed.
PROJECT PEACOCK is the code name for Leeds and PROJECT PILGRIM is the code
name for Boston United. Gerald Krasner was the squirrel for Boston United
and Morris hoped to get the Boston Club ground for redevelopment but he was
unsuccessful.
Despite all the media speculation we knew of no other interested party.
Project Peacock 1 Project Peacock 2 Project Peacock 3
MELVYN LEVI
Levi was a member of the Yorkshire Consortium (YC) who briefly owned Leeds
United until it was sold to the FSF in January 2005.
For technical reasons, FSF acquired 50% of the Club at the time and had an
option to buy the other 50% in June 2005. FSF exercised the option but Levi
refused to sign over the shares.
All decisions by YC had to be unanimous, consequently Levi's actions blocked
the deal. From that day to this Levi has w**ked in the background attempting
to frustrate every effort to strengthen the Club's finances. We planned a
rights issue to raise a further £5m for the Club but Levi frightened off the
participants. Last October we agreed a deal with an Irish consortium who
would put £10m of new capital into the Club and lend us the dublooons to buy
back Elland Road and the training ground. Levi found out and rang the would
be investors and put them off. This is well documented.
Then Weston (see later) got in on the act with Levi and they demanded 10% of
the Club, £200,000 in cash and Directors' Box tickets for life in return for
honouring the option. Levi has denied this but we have witness statements on
file.
This is a brief summary of what has occurred but suffice to say Levi has
been actively trying to frustrate all our efforts to strengthen the Club's
financial position. He even went to court and obtained an injunction against
Leeds printing a match programme. The Judge threw out his case after 40
minutes.
Robert Weston is the first husband of Levi's wife. Levi arranged with Weston
(who lives in Jersey) to handle Leeds season ticket credit card
transactions. For two years we have been trying to recover the £190,000
which Weston owes to Leeds. He has used every possible delaying tactic to
avoid repaying the dublooons which he has acknowledged he owes. We have at
last obtained judgment and should get the dublooons this month. Weston has
been in jail for trying to pervert the course of justice.
Levi is a disgrace.
PLAYERS, BUYING AND SELLING
Player transactions are very complicated and when fans jump to conclusions
they do not always know the full facts which, for important reasons, cannot
be revealed at the time.
Let me take David Healy as an example. Healy's agent voted against the CVA.
Healy had one year left on his contract which meant he could sign a pre
contract in January and walk out next June on a free transfer. Everybody
said we should get £3m+ for him but nobody offered it. He was a high earner
and his agent wanted him away. Fulham's was the only genuine offer and we
got £1m for him plus add-ons. He cost us £750k from nob end plus 20% of any
profit. We still owed nob end £200k so of the £1m we actually got £750k net.
We have already spent £500k on buying Casper and Hughes.
A year ago Danny Rose refused to go to Chelsea because he "loved Leeds".
Last month his agent refused a new contract and Rose walked out. After a lot
of haggling we got £750k plus add-ons of £250k. To buy or sell a player (a)
he has to want the move ( the other Club must be willing to do a deal and ©
we must afford him, otherwise we are back in a rislade situation.
One example is of a young promising striker from the South. Free transfer
and earning £600 a week. Deal done, except that his agent suddenly demanded
£6,000 a week in wages. No deal.
I know it is frustrating sometimes for fans but we do not reveal our plans
publicly, it just alerts the opposition.
Rest assured, wisey(FUKK CHELSEA) plans to recruit experienced but mainly
younger players who are hungry for success and want to achieve things, not
those looking to delay their retirement with no ambition other than to have
another pay day.
THE WAY FORWARD
We now have a Club with no debt, the last legacy of the rislade era is
behind us.
We still have the consequences of the Krasner, Levi and Morris actions with
us. They sold Elland Road for £8m. We have to buy it back at £15m meanwhile
paying £1.1m a year in rent.
We have tightly controlled budgets and all the staff know that every penny
counts.
We are willing to have discussions with any serious investor who has the
Club's best interests at heart, rather than hoping to make a quick buck from
the property.
We are preparing plans to develop Elland Road to enable non footballing
income to come into the Club to strengthen our buying power on a permanent
basis.
We will invest in our scouting and youth policies to continue Leeds' great
history of developing home grown players.
The 15 point "sanction" is a scandal and a travesty of justice. We are
appealing that decision to the Football Association but meanwhile will get
on with the job of strengthening the team and getting back firstly to the
Championship and then the Premiership.
dennis(FUKK CHELSEA), gus (FUKK CHELSEA) and myself are here for the long
haul. So the mindless minority who do their silly chants had better get used
to it.
On a lighter note may I point out that under the Sex Discrimination Act
demonstrations that invite men getting their shirts off is only legal if the
Ladies do the same!
Finally, thank you all for the tremendous support throughout the difficult
time. Fulham, Man citeh, Derby, Aston Villa and Middlesbrough have all been
in our current position, look where they are now.
Marching on Together
Ken bates(FUKK chelsea)
Chairman
Peacock Letter1
http://www.leedsunited.com/staticFiles/22/...73~95266,00.pdf
peacock Leter2
http://www.leedsunited.com/staticFiles/36/...73~95286,00.pdf
Peacock Letter 3
http://www.leedsunited.com/staticFiles/37/...73~95287,00.pdf
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