[Archived] Leeds

[philipl]

Sorry a stray comma changed the meaning of my sentence which should read the article suggests that if no acceptable bids are received, Leeds are perilously close to liquidation.

[bluebruce]

What do Leeds owe us hundreds of thousands for? Can't think who we sold them...

[philipl]

In the Matteo deal, I believe they were supposed to pay us part of his wages. Also the Jonathan Douglas transfer might be in the pot as well.

[Brfcrule1]

hi all,

have to agree good riddance to bad rubbish I went up there when blackburn were playing a friendlyunfortunately blackburn lost that game after the game I was chased into a Leeds hospitalluckily I hid and then got a cab home complete and utter thugs the football leagues will be better without leeds Utd less hooliganism

laters all.

[Jimbo]

Ken Bates has bought back Leeds BBC Link

"Leeds United has been resold to former owner Ken Bates for an undisclosed sum.

The move comes five days after Leeds' administrators, KPMG, said they were selling the club because of a legal challenge from HM Revenue & Customs.

HM Revenue & Customs had mounted a legal bid to block Mr Bates' earlier attempt to buy back the club and give its creditors just 8p in every £1.

It is currently unknown how much of Leeds United's £35m debt Mr Bates now intends to pay off.

KPMG had earlier said that unless the club was able to leave administration, the Football League may not let it start the Season"

[den]

Strange state of affairs: Statement on official Leeds United site, from the Football league.

Philipl?

[philipl]

Sounds like Ken made a grab for the share which would enable Leeds to play in the Football League and the League's Board said hold on a minute, this is the latest in a series of fishy going-ons, we want to have a look at it and be fully re-assured that all is OK.

The last para suggests that if needs be the administrator could be given the share to enable Leeds to start the new season.

[92er]

Whilst I wouldn't class Bates as the most palatable of individuals, I wouldn't call him "dodgy" as such, just an extremely clever businessman who is very adept at using the law as it stands to his own advantage.

I'm sure the existing deal for Leeds for example isn't technically illegal, it's been concocted in conjunction with, and approved by, professional advisors.

It may stink, but if it can be done, it's the legislation which is at fault, not him.

Didn't he buy debt ridden Chelsea for a quid back in the 80's? To his credit he kept them afloat and how much did he make from selling to Abramovich? Probably has the same long term aspirations for Leeds.

On a separate note, I'm sure Bates originally had a business in this area and was quite pally with our former chairman Bill Fox. (No slight on Mr. Fox intended whatsoever)

In the 60's I think he had some sort of business in the area and he was chairman of Oldham.

He came on a Radio Lancs tribute to Uncle Jack just after he died. He said that before UJ made it really big, they had business dealings together. If Bates wanted anything from Jack, he had to pay in cash as UJ had the good sense not to trust him!!

[Florida Rover]

This article summarises nicely where all this stands regarding the Leeds situation.Lord Mawhinney and his crew ahve a difficult decision ahead of them regarding whehter to allow the new leeds to play football or require the old leeds to remain in adminstration.Mr Bates has seemed to have a midas' touch.

Guardian blog article

[philipl]

I had wondered about this when the Bates CVA scheme was first concocted. I think this time he might have come a cropper.

The role of KPMG in all this is looking worse and worse- mind you, knowing that particular office of KPMG of old, I am not surprised. The way the second sale of Leeds was conducted was astonishing.

Mawhinney's deserved reputation for being tough but fair in the way he has handled the Football League is on the line with this one. My guess is that KPMG United will be kicking off the season in Div 1.

Does anyone believe KPMG will have the balls to liquidate Leeds United having so publicly bungled the Administration?

If they do liquidate, will KPMG have any clients left in West Yorkshire?

[Paul]

Can anyone explain how it is allowable, or legal for that matter, for the Football League to require football debts be paid in full when other creditors only receive "x" p in the £? In my experience when companies go into administration or CVA creditors are paid in the is order:

teh administrator

preferential creditors ~ bank, HMRC

secured creditors

unsecured creditors

What is this strange power the FL have which puts them at the head of the queue. I understand the reasoning to require it, I don't understand how it is legal.

[dave birch]

Philipl, you may get an answer out of Jan.

Paul, that was my my thinking too, here its:

Administrator

Employees

Tax Office

Secured Creditors (this should include Banks etc)

Unsecured Creditors

Strange that they appear to have preferential treatment.

[philipl]

The Football League is a private members' club which requires all debts between members to be settled in full. This is an entirely legitimate and voluntary arrangement.

In a CVA, all creditors get to vote on the settlement proposed. They are free to vote in such a way that the business exits the League in which case all creditors are treated equally.

If the new business wants to play League football, it has to abide by league rules.

[dave birch]

Philipl, so, this "private members club" could shaft all of their creditors, including employees, the Tax Office and secured creditor if they so wished?

[philipl]

No- they (the secured, unsecured and tax creditors) are entitled to vote out the proposal or to accept it.

To the extent they have voted to accept the arrangement, they see their financial interests being advanced by Leeds remaining a football club. Remember even Ken is offering the creditors all sorts of dividends in addition to the 13p in the £1 he has now moved to if Leeds return to the EPL.

The price of a ticket to the football lottery is to pay the football bills in full. That is the issue for all the creditors to decide upon.

Rovers are one of the football creditors waiting for several hundred thousands by the way.

[Paul]

Philip I understand this but don't understand how it can be legal? Surely the effect of this is to reduce the total sum available to ALL legitimate creditors? Hardly surprising HMRC are upset. If a company has debts of say £50m ~ £10m football related and £40m non-football and n this example £20m is available for debt repayment ~ it can legally pay off, for example, 25% of the non-football debts and continue trading while the football creditors receive 100% of the debt. Surely that should be 20% to all creditors rather than 100% to football-related and 10% elsewhere?

If it is legal for the FL to run this private members club what is to stop other industries running a similar club operating in the same manner?

[philipl]

It is entirely legal.

If you have a business with a license to make things and you get into difficulty, the new business owners go to your creditors in a CVA with a proposal which shows:

Creditors get x pence in the £1

License to continue the business payable 100%

Creditors get an extra y pence in the £1 if I use the license successfully

In this case, because Leeds got themselves in such a mess, the cost of the license (football debts) is rather high. Leeds is complicated because a bunch of probably Ken Bates related overseas businesses ended up as creditors and Ken has bought the business back after putting it into CVA seemingly without getting approval of the Courts to continue as a Director.

The creditors can always vote to wind it up if they are not getting 100 pence in the £1. As I wrote when Leeds went up for sale the second time, this is an intractible one with big egos involved and a liquidation is a very real possibility. The issue for the Revenue is not only whether to accept 13 pence in the £1 but the credibility of both the buyer and administrator. Were it not for the boohoo shutting down Leeds United would create, liquidation would be the certain fate now.

[dave birch]

Philipl, doesn't the Revenue dept have the final say and can veto any agreement?

[philipl]

Their strength has been weakened by recent legislation but they can still very nearly call the shots which is why the original sale to Bates got cancelled when they refused to sanction the deal.

All the core physical value in Leeds has been sold or mortgaged off so the fact they are an empty shell may save them from liquidation.

[dave birch]

So there's nothing left for the day to day traders with Leeds United who are owed money..

[Cheshireblue]

That's the long and the short of it. If they wind it up, they will get nothing. 13p is better than nothing, although I can ceratinly sympathise with the other creditors when they see the football debts being settled in full.

As Phillipl says, there is nothing being forced through here. The proposal is that all football debts are paid in full or the club folds. The creditors have the ability to vote to either accept or reject that proposal.

And I believe that HMRC are no longer considered preferential creditors. They rank the same as every other unsecured creditor although it is a brave man that votes on something that they disagree with.

[ace]

I had wondered about this when the Bates CVA scheme was first concocted. I think this time he might have come a cropper.

The role of KPMG in all this is looking worse and worse- mind you, knowing that particular office of KPMG of old, I am not surprised. The way the second sale of Leeds was conducted was astonishing.

Mawhinney's deserved reputation for being tough but fair in the way he has handled the Football League is on the line with this one. My guess is that KPMG United will be kicking off the season in Div 1.

Does anyone believe KPMG will have the balls to liquidate Leeds United having so publicly bungled the Administration?

If they do liquidate, will KPMG have any clients left in West Yorkshire?

Surely all this is bringing the game into disrepute?

[Flopsy]

The games been in disrepute since ITV Digital failed, its just hammering the final nails into the coffin now.

I mean, just look at the Tevez thing for gods sake. I for one hope Bates gets his comeuppance and that the FL do NOT allow Leeds into the football league until they have repaid the St John's Ambulance in full.

[philipl]

FA investigation into season ticket sales.

So if I understand this correctly, Ken Bates' company hold the ticket income money for games to be provided by KPMG because the Football League have not sanctioned the transfer of Leeds' membership from KPMG to Ken Bates' newco. It also suggests that KPMG did not act transparently or fairly in the second sale of Leeds in that they withheld their own information on season ticket sales and their status from the competing bidders.

All competing bidders have said they reduced their offers for lack of clarity and certainty. How were these actions denying essential information which was in the ownership (if not the posession) of KPMG designed to get the best deal for the creditors- the reason administrators are appointed?

The season ticket information belonged to KPMG as they are the people who then and now have the duty and liability to fulfil the match obligations- this is the reality until the League share is transferred to a fully cleared bidder.

This begs the question- why did the administrator allow Bates to do anything other than be the accountant for season ticket sales on their behalf following the first sale given Bates had no legal right to stage any of the games he was selling season tickets for nor have any claim in law to the season ticket moneys? Simply have Ken issue a statement that the season ticket money was in a separate account surely is insufficient?

KPMG in boiling, not just hot, water if this is the case.

I would guess professional indemnity insurance people are rapidly becoming acquainted with Football League and FA rulebooks this morning.

[philipl]

Players not paid in June.

This is a very clear indication that a liquidation is on the cards.