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Leeds Utd calls in administrators

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Former Premiership football club Leeds United has called in administrators.

 

It will mean United are docked 10 league points, but it is not clear if that would happen this season or next.

 

The news comes just hours after the Leeds United Supporters Trust told the club it was in a position to make a serious proposal to buy the club.

 

Leeds has been struggling with its finances in recent years and relegation from the Championship will certainly eat into earnings for the coming year.

 

In recent years the club has sold its Elland Road home ground and its Thorp Arch training ground to cover previous cash shortfalls.

 

The fact that contracts for a number of high-price players run out this summer also means that the club will run short of valuable assets later this year.

 

By entering administration the club can be held together while plans are put in place to restructure or sell it.

 

Experts predict that by making such a move, the club would be able to get rid of some of its debts.

 

Leeds would then be a more attractive investment and takeover target because any new owner would not have to take on its entire debt burden.

 

Under League rules, introduced in 2003, teams are deducted 10 points if they enter administration. Wrexham was the last club to befall such a fate in the 2004/5 season.

 

By taking the decision to go into administration during the current season, Leeds could have 10 points deducted now while the team is still in the Championship, rather than when it started next season in League One.

 

Should the penalty be held over, it would mean that the club started next season with a points tally of minus 10, a deduction that could seriously damage its prospects and could leave it in trouble for the rest of the 2007/8 season.

 

Leeds' chairman Ken Bates has been working hard to attract new investment to the club, but has so far had little success.

 

As well as the supporter's club, Leeds defender Gary Kelly has also been linked to a possible Irish takeover bid for the club.

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it's already being bought by a company linked to bates which will apparently mean that they avoid the ten points dock

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it's already being bought by a company linked to bates which will apparently mean that they avoid the ten points dock

 

I read that the points deduction happens straight away, so a big fucking difference that makes.

Edited by Hatful Of Hollow

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According the league, the points deduction happens with immediate effect, which is almost certainly the reason for going through this process now rather than later.

 

Although it seems crazy that the business can be sold to a group fronted by the existing owners.

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On Five Live it said the 10pts would come off this year. That's not fair, Shirley?!

 

To be honest, I think the 10 point deduction for going into administration is ridiculous anyway. I know Leeds' situation is different but most of those clubs who have struggled in recent years have not been helped by the ITV Digital fiasco.

 

They've been relegated so by default, they're going to suffer financial losses and given the situation they were in, there was that risk.

 

And I can't say for certain, but if they are allowed to apply it this season, I don't think it'll be unprecedented.

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According the league, the points deduction happens with immediate effect, which is almost certainly the reason for going through this process now rather than later.

 

Although it seems crazy that the business can be sold to a group fronted by the existing owners.

 

SLP, Fish - suck my clems. :panic:

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that's fucking obscene if it's right.

 

If my team was struggling financially and flirting with relegation I'd happily call in the administrators to ease my debt.

 

League wants shooting if the points deduction happens this season

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that's fucking obscene if it's right.

 

If my team was struggling financially and flirting with relegation I'd happily call in the administrators to ease my debt.

 

League wants shooting if the points deduction happens this season

 

 

No "if"s mate, it's already happend.

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Leeds United, who were already on the verge of relegation from the Championship, have entered administration, incurring with it a 10-point penalty.

 

United appointed administrators KPMG who immediately agreed to sell the club to a newly formed company called Leeds United Football Club Limited, the directors of which are Ken Bates, Shaun Harvey and Mark Taylor.

 

Richard Fleming, joint administrator and KPMG restructuring partner, revealed Leeds' debt totalled £35million.

 

Fleming told KPMG's website: "We were asked by the board of directors to advise Leeds United on Monday 30th April 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 31st March 2007 indicated debts totalling approximately £35million, with a cash injection of approximately £10million required to continue trading.

 

"Further, Her Majesty's Revenue & Customs recently issued a winding up petition for approximately £5million. If this debt had not been paid by 25th June 2007, the club may have been forced into liquidation."

 

Football League rules state any club entering administration is to be docked 10 points.

 

Administrators understand that these points will be deducted from this year's total and not next, thus confirming the club's relegation to League One, but also ensuring, crucially, that The Whites start next season with a clean slate.

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On Five Live it said the 10pts would come off this year. That's not fair, Shirley?!

 

To be honest, I think the 10 point deduction for going into administration is ridiculous anyway. I know Leeds' situation is different but most of those clubs who have struggled in recent years have not been helped by the ITV Digital fiasco.

 

They've been relegated so by default, they're going to suffer financial losses and given the situation they were in, there was that risk.

 

And I can't say for certain, but if they are allowed to apply it this season, I don't think it'll be unprecedented.

 

Agreed, daft rules. I know why they exist, to force owners to run their clubs properly but howay man, the Football League, FA et al aren't even run properly. I imagine, straight or otherwise, it to be bloody hard to run any club outside of the top-flight financially well.

 

If the top end of the game (Freddy won't like this) actually helped the lower end more, what with all their billions...

 

I think this rule should be abolished. Persecute the owners not the club and fans.

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First of all they miss out on their 10 points deduction and now they're offering 1p in the pound to their creditors so if the CVA is approved Bates will effectively have just bought a club with very little debt.

 

Krasner fury at Bates' Leeds bid

 

Former Leeds chairman Gerald Krasner says Ken Bates' offer to pay off the club's creditors is "derisory".

 

And Krasner has offered to represent the creditors free of charge to prevent chairman Bates retaining control.

 

Bates placed Leeds in administration this month and could get the go-ahead to buy the club back as director of a new company at a meeting on 1 June.

 

He has offered to settle the club's debts at 1p in the £1 and has the backing of the club's major creditors.

 

The creditors are owed a reported £22million.

 

But in a letter sent to creditors Krasner said: "Having now seen the papers in connection with the proposed CVA, it appears that Mr Bates' new company is proposing a dividend of 1p in the £1.

 

"Effectively, he will have bought the club back debt free for approximately £500,000, including professional costs.

 

"Quite frankly I consider this offer utterly derisory and unless you agree with this proposal, it is up to you as a creditor to make your voice heard."

 

Krasner added: "I have had a lot of approaches recently from fellow professionals, acting either for creditors or for third parties, who wish to invest in the club, but do not want to deal with Mr Bates.

 

"They have all asked me the same question, 'What can be done?'

 

"My answer has always been that if the Company Voluntary Arrangement (CVA) proposal by the joint administrators is voted down, then I believe that substantial new investment would come quickly into the club and the return to creditors would be much higher."

 

Krasner, director of Leeds-based solicitors Bartfields, has stressed he has no financial interest in the matter, but is acting on behalf of a number of creditors who have already approached him.

 

Leeds went into administration with debts of £35million following a winding-up order issued by the Inland Revenue, who are owed £5million in unpaid taxes.

 

The business was, with administrators KPMG's approval, almost immediately bought by a new company, Leeds United Football Club Limited, of which Bates is a listed director.

 

But the sale is subject to approval by the club's creditors who will be furnished with full details of takeover plans put forward by other consortia at the meeting on June 1.

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Leeds players agree wage deferral

 

All but four of Leeds United's players have agreed to a request to defer their wages, reports BBC Radio Leeds.

 

The club's administrators KPMG liaised with the Professional Footballers Association and the Football League before entering a deed of deferral.

 

Thirty two of the 36-strong squad have agreed in order to help secure the long-term future for the club.

 

Leeds, who have been relegated to League One, went into administration before the end of the season.

 

The wages of the players who have agreed to the deferral will be paid after the approval of the CVA at a meeting of the creditors next month.

 

The administrators will pay those who did not sign the deed of deferral.

 

Chairman Ken Bates is hoping to buy back the club, who are £35m in debt, on 1 June when their creditors who are owed money are expected to be offered one penny in the pound.

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On Five Live it said the 10pts would come off this year. That's not fair, Shirley?!

 

To be honest, I think the 10 point deduction for going into administration is ridiculous anyway. I know Leeds' situation is different but most of those clubs who have struggled in recent years have not been helped by the ITV Digital fiasco.

 

They've been relegated so by default, they're going to suffer financial losses and given the situation they were in, there was that risk.

 

And I can't say for certain, but if they are allowed to apply it this season, I don't think it'll be unprecedented.

 

Typical of the state of the game these days. Players can dive, intimidate referees, assault each other; whole stadiums of fans can racially abuse players with comments that belong in the last century; and clubs can tap up players, managers and enter illegal deals for players. And the only punishment they ever seem to recieve is a fine. The punishment that would really make clubs, players and fans sit up ant take notice would be a points deduction, yet this only ever seems to be used if the clubs don't have enough cash. Typical.

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EXCLUSIVE: STARS FIGHT FOR CASH

By Simon Mullock 20/05/2007

 

A GANG of seven players stand to lose more than £600,000 from Leeds United's financial collapse.

 

The Sunday Mirror has a list of creditors who have been contacted by accountancy firm KPMG, the administrators for the troubled club.

 

It reveals money is owed to former Elland Road stars such as Danny Mills, Eirik Bakke and Steve Stone.

 

Advertisement

Mills, the popular right back and former England international, is owed more than £216,000, while Michael Ricketts, who endured a miserable time in Yorkshire club before being loaned to a succession of clubs, is owed £117,500.

 

Along with other Leeds creditors, they have been offered one penny for every pound owed to them.

 

The Professional Footballers' Association is representing the players, one of whom said: "It is a worrying time for us and all the other creditors. But we'll fight tooth and nail for what we're owed.

 

"The players' union are dealing with things on our behalf. They've explained we need to stick together - and they'll look after all the players' interests."

 

Leeds chairman Ken Bates announced the club had gone into administration with just one day of the Championship campaign left. The club was virtually doomed to relegation and accepted a 10-point penalty to seal their drop into League One rather than have a punishment inflicted from the start of the next campaign.

 

It was opportunistic - but legal. Another former Leeds player said: "We feared something like this might happen because there had been rumours bouncing around the club and the city of Leeds for a few weeks that something might be on the cards.

 

"Perhaps we shouldn't be shocked, but the official announcement that the club had gone into administration did come as a major blow."

 

The biggest creditors are the companies that chairman Bates (below) introduced as investors. The exact ownership of these businesses - based in Switzerland and the West Indies - has never been revealed.

 

When clubs went under in the past, football's authorities have guaranteed outstanding cash to players and managers but that will not be the case this time.

 

The Leeds players are outside the umbrella of football employees because they signed compromise agreements to settle debts with Leeds United FC - the company that has not gone out of business.

 

PLAYERS ON CREDITORS LIST

 

DANNY MILLS

 

£216,667

 

MICHAEL RICKETTS

 

£117,500

 

STEVE STONE

 

£71,429

 

ERIK BAKKE

 

£76,000

 

PAUL BUTLER

 

£65,000

 

JERMAINE WRIGHT

 

£45,000

 

SEAN GREGAN

 

£40,000

 

TOTAL

 

£631,596

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£216k reduced to just over £2k, how gutting would that be?

 

Its not like he needs it tho, but aye, gutted.

 

They are still paying Fower & Viduka arent they? <_<

 

what a mighty fall :blink:

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