More Trouble At Leeds

[Exiled_Rover]

BTW, anyone see Peter Reid on a Question of Sport - he failed to recognise Ian Harte and had forgotten it was Kevin Moran who was the first player to be sent off in an FA Cup Final.....for a tackle on Reid who was playing for Everton!  

Fair do's to him though, he jokingly linked that to Leeds' great decision to fire him    

As for Leeds - I'm not up to date on the whole situation, but can anybody explain why they keep getting deferrals for a week or two at a time? Shouldn't they be paying the piper by now?!

[Yerotsluap]

It would appear David Batty's love for his home town club has run out

Batty to refuse pay off

[philipl]

There is conflicting news about Batty- others are reporting he is now willing to go out on loan and thereby help Leeds to defray some of his costs.

I don't know why Exeter did not opt for creating a new company and avoid the mess they are now facing as the Revenue look to make them their test case.

[roversWASmylife]

Wouldn`t say that this is trouble for Leeds, but more of hope for Leeds.

Wasn`t sure whether to put this under this topic or, not happy at the Breezeblock.

Bolton 'to quiz director'

[broadsword]

That Yorkshire consortium have pulled out after "financial investigations" (acc. to F365). Wonder what form they took? "Just how much manure are you in?"; "Very very deep."; "OK, that concludes our investigations".

Oh dear oh dear!

[Nuclearsox]

That Yorkshire consortium have pulled out after "financial investigations" (acc. to F365). Wonder what form they took? "Just how much manure are you in?"; "Very very deep."; "OK, that concludes our investigations".

Oh dear oh dear!

that's now being reported on the BBC too.

[philipl]

The BBC report is pretty confusing. This one is better.

Either, there has been a back door agreement between the two cosortia to avoid them getting into a bidding war or things are very sick at Leeds United.

My guess is the latter. Sorry to be repetitive, but the Americans holding first call on gate revenues and season ticket sales for the next 25 years means they are not going to be interested in receiving 20 cents in the dollar from a deal now if they are pretty confident their lawyers can make their agreement stick going through an administration.

The Americans would only budge if they thought a receivership and liquidation (i.e. Leeds would disappear altogether) is going to happen and there is too much of an assured future revenue stream from the Leeds fans for that to happen.

As it is, both consortiums were talking about paying £20m for settling creditors AND providing new working capital. Taking into account the time value of money and risk and hassle factors, I believe the Americans will only talk when 40 cents in the dollar is offered to them.

If the debts are £100m, that means £40m WITHOUT any new working capital or some £55m for creditors if the highest Leeds debt number of £135m is to be believed. Nobody would want to take Leeds on without refinancing them to get them into a position to have a decent chance of avoiding relegation at the end of next season even if they don't go down this season plus a contingency is needed for relegation this summer.

All that adds up to around £60m to £75m as the bare minimum figure required. Neither consotium seems to be even remotely close to these numbers and the second lot have recognised reality and walked away.

Whether the Leeds draw against a mis-firing ManU last Saturday will be enough to stop the administrators from being called remains to be seen. If the first consortium does not bid now after having six weeks plus to look at it, the future is again very bleak for Leeds.

I suspect that Trevor Birch now faces the most difficult creditors' meeting yet. If he gets another week's extension, I suspect he will have been told to inform the consortium that if they do not bid by then, they will be talking to the Administrator after a week tomorrow.

What a time for Leeds to be facing their traditional bogey team, Liverpool, this Saturday!

[philipl]

A rather gloomy prognosis.

[RevidgeBlue]

According to teletext, shares have been suspended in Leeds United ahead of an announcement.

Significant?

[Alan75]

also on sky news now

[ot2ac]

just been announced that trading in shares in leeds has been suspended due to an pending announcement.

Its either announcing a takeover(which is apparently more likely) or administration.

Source radio 5-live.

Interesting

[Clive]

No idea, but it sounds interesting, if very ominous to a non-economic mind.

[ot2ac]

same time for all three of us, spooky!!!

[philipl]

Something clearly dramatic is about to happen if the shares are suspended now asopposed to at any of the other deadlines. The share price has been steadily losing ground and whether it is a sale or administration, the shares are effectively worthless- only sentimentalists have been keeping the company's nominal value up but even that had fallen from £13m to £8m.

Ordinarily the suspension of a company's shares is because of irregularities either in share dealing or within the company or pending a very major announcement when leaks could prejudice one set of shareholders who don't know relative to those who do.

The lack of commentary on the news wires points to journalists wanting to be very careful. That in itself points to very bad news for Leeds.

Leeds have said the suspension is pending a statement about their financial position.

[Clive]

Something clearly dramatic is about to happen if the shares are suspended now asopposed to at any of the other deadlines. The share price has been steadily losing ground and whether it is a sale or administration, the shares are effectively worthless- only sentimentalists have been keeping the company's nominal value up but even that had fallen from £13m to £8m.

Ordinarily the suspension of a company's shares is because of irregularities either in share dealing or within the company or pending a very major announcement when leaks could prejudice one set of shareholders who don't know relative to those who do.

The lack of commentary on the news wires points to journalists wanting to be very careful. That in itself points to very bad news for Leeds.

Leeds have said the suspension is pending a statement about their financial position.

In other words, Leeds' shares have been suspended so they don't go up or down due to any leaks about this announcement. Journalists, are not willing to speculate, as that might also influence the shares. No-one wants to say what is happening either way until it is the catagorical truth for these reasons.

Have I got that right ?.

[ot2ac]

Something clearly dramatic is about to happen if the shares are suspended now asopposed to at any of the other deadlines. The share price has been steadily losing ground and whether it is a sale or administration, the shares are effectively worthless- only sentimentalists have been keeping the company's nominal value up but even that had fallen from £13m to £8m.

Ordinarily the suspension of a company's shares is because of irregularities either in share dealing or within the company or pending a very major announcement when leaks could prejudice one set of shareholders who don't know relative to those who do.

The lack of commentary on the news wires points to journalists wanting to be very careful. That in itself points to very bad news for Leeds.

Leeds have said the suspension is pending a statement about their financial position.

In other words, Leeds' shares have been suspended so they don't go up or down due to any leaks about this announcement. Journalists, are not willing to speculate, as that might also influence the shares. No-one wants to say what is happening either way until it is the catagorical truth for these reasons.

Have I got that right ?.

latest:

Trevor Cradman(leader of the remaining consortium) states there will be no announcement regarding his consortium due today. (5-live)

Also there will be an announcement at 5pm by leeds united regarding the share suspension.

Hmmmmmm.

[Clive]

This could be a nasty equation:

No news about the consortium today + a statement at 5pm about Leeds' future = Administration ??.

Thank goodness I'm not a Leeds fan at this moment.

[den]

Philipl, where are you when you're needed?

[philipl]

Something clearly dramatic is about to happen if the shares are suspended now asopposed to at any of the other deadlines. The share price has been steadily losing ground and whether it is a sale or administration, the shares are effectively worthless- only sentimentalists have been keeping the company's nominal value up but even that had fallen from £13m to £8m.

Ordinarily the suspension of a company's shares is because of irregularities either in share dealing or within the company or pending a very major announcement when leaks could prejudice one set of shareholders who don't know relative to those who do.

The lack of commentary on the news wires points to journalists wanting to be very careful. That in itself points to very bad news for Leeds.

Leeds have said the suspension is pending a statement about their financial position.

In other words, Leeds' shares have been suspended so they don't go up or down due to any leaks about this announcement. Journalists, are not willing to speculate, as that might also influence the shares. No-one wants to say what is happening either way until it is the catagorical truth for these reasons.

Have I got that right ?.

Yes except the journalists cannot influence the share price given it is suspended.

What the journalists are frightened of is saying Leeds are going under and then a creditor or employee who acted as a result subsequently sueing them if they got it wrong.

It is now more than an hour since the suspension so either there is a superb piece of news management or there is nobody willing to buy Leeds.

All the indicators- creditors not agreeing amongst themselves and a top figure of £30m being quoted as the amount the consortium had assembled- point to a deal not being very close.

[Clive]

From a layman's view, you'd be mental to buy Leeds with their debts, and the needs of the playing/coaching side of things. I have a feeling it'll be bad news for Leeds at 5pm, and the consortium  that is considering to buy the club might be close to pulling out altogether.

[den]

Gerald Krasner[sp]? has said that the talks between his consortium have been ongoing this afternoon about a deal worth £9m.

Leeds will make a statement at 5 O'Clock.

[philipl]

Krasner is an insolvency expert.

I suspect that if the consortium buy Leeds, this is a do-it-yourself administration in all but name. The consortium might have reached agreement with the all the creditors which therefore means they have to buy-out the shareholders to do the deal. Unlike the club, they would not need to treat creditors equally in their dealings with creditors prior to buying the club so they may well have struck a series of side deals which include the creditors surrendering their right of legal action against the club should their acquisition of Leeds succeed.

The £9m would be the amount offered in a take it or lose everything offer to buy out 100% of the club. Leeds would then be taken private and de-listed from the Stock Exchange.

[den]

So for £9m the club would be free of all debts?

[American]

Question regarding differences in laws.

Over here, if someone is looking to buy a company in Leeds' financial state, they usually wait until bankruptcy is filed (administration). At that point they usually get a better deal with the creditors and the administrator, due to the protections that the bankruptcy court provides the debtor. Could that be what is going on with Leeds (ie - is the consortium holding out with the creditors and Birch and co. are going to go into administration to help force a deal), or does it work differently?

Oh, and kudos for keeping us up on all of this and helping explain it in a way we can understand Phillip.

[philipl]

We don't have a Chapter 11 in the UK and going into administration has worse consequences. There can be no certainty that the business will be as attractive when the administrator has run the company maximising the returns for the creditors. The Administrator's job is to realise assets more than to run the business.

That is why the consortium are trying to buy the club rather than buy whatever is left after the administrator has done his work.

The clarification statement this evening states that the creditors' standstill is over- this means Leeds have to start paying their bills immediately or face the prospect of any one unpaid creditor going for a winding up order.

It also means that either the consortium take over on the back of having struck deals with all the creditors or the administrators can be called in at any time.

There is a very clear statement that the consortium will NOT pay any benefit to the existing shareholders so anyone holding a share in Leeds United plc is now holding a totally worthless piece of paper. The speculated £9m has not materialised.