Leeds United Football Club Limited

Leeds United Football Club, founded 4 May 2007, is a limited company, the directors of which are Ken Bates, Shaun Harvey and Mark Taylor. The company purchased Leeds United A.F.C. via a creditors vote after the club entered administration, but this ownership was challenged by HM Revenue & Customs and the club was subsequently put up for sale by the administrators KPMG.

Entering Administration

Leeds entered voluntary administration on May 4 2007, thus incurring a 10-point deduction which confirmed the club's relegation to League One.cite web |url=http://news.bbc.co.uk/1/hi/business/6624731.stm |title=Leeds Utd calls in administrators |accessdate=2007-05-04 |date=4 May 2007 |work=BBC Sport |publisher=BBC] [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6625751.stm |title=Relegated Leeds in administration |accessdate=2007-05-04 |date=4 May 2007 |work=BBC Sport |publisher=BBC] Administration had been predicted for some time, due to crippling debts created during Peter Ridsdale's chairmanship. For his part, Ridsdale denied any of the current situation was his fault, [cite web |url=http://home.skysports.com/list.aspx?hlid=464408&CPID=10&clid=2&lid=&title=Ridsdale:+Stop+blaming+me&channel=& |title=Ridsdale: Stop Blaming Me |accessdate=2007-05-04 |date=4 May 2007 |work=BBC Sport |publisher=BBC] only days after having admitted it was a mistake to allow the then-manager David O'Leary to spend so lavishly on players. [cite web |url=http://soccernet.espn.go.com/news/story?id=426556&cc=5901 |title=Ridsdale: I should have said no to O'Leary |accessdate=2007-05-04 |date=30 April 2007 |work=ESPN] Ken Bates, however, blamed Leeds' financial situation firmly on Ridsdale and his board. [cite web |url=http://home.skysports.com/list.aspx?hlid=464989&CPID=10&clid=2&lid=4&title=Bates+blames+past+spending&channel=& |title=Bates Blames Past Spending |accessdate=2007-05-05 |date=4 May 2007 |work=Sky Sports] [cite web |url=http://home.skysports.com/list.aspx?hlid=465352&CPID=10&clid=2&lid=&title=Bates+issues+frank+assessment |title=Bates Issues Frank Assessment |accessdate=2007-05-07 |date=7 May 2007 |work=Sky Sports]

Bates is Back

KPMG Restructuring were appointed as administrators of Leeds United and, within minutes of entering administration, the club was sold to "Leeds United Football Club Limited".cite web |url=http://www.kpmg.co.uk/news/detail.cfm?pr=2873 |title=Leeds United Football Club – KPMG Administrators appointed |accessdate=2007-05-04 |date=4 May 2007 |publisher=KPMG UK News] Had the club not voluntarily entered administration, they would have been forced into liquidation on June 25 2007 by Her Majesty's Revenue and Customs, to whom the club owe £6 million.

Future Ownership

On 6 May 2007 Don Revie's son Duncan announced that he was in the process of forming a consortium to buy the club saying "I've tried to ignore my feelings for a long time as I know the aggravation needed to put things right. But when things get this bad, I can't ignore it. My feelings run too deep. I am interested in trying to get Leeds back where they belong, which is in the top six of the Premiership. I've held talks with some influential people and the feedback has been good. I will be holding more talks in the next few weeks" [cite web |url=http://home.skysports.com/list.aspx?hlid=465187&CPID=10&clid=2&lid=4&title=Revie+plots+Leeds+takeover&channel=& |title=Revie Plots Leeds Takeover |accessdate=2007-05-06 |date=6 May 2007 |publisher=Sky Sports] cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6641471.stm |title=Revie's son joins chase for Leeds |accessdate=2007-05-10 |date=10 May 2007 |publisher=BBC Sport] adding on 13 May 2007 that he would be calling Bates the following day regarding his bid [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6641471.stm |title=Revie's son pushing Leeds buy-out |accessdate=2007-05-13 |date=13 May 2007 |publisher=BBC Sport] . Simon Morris also launched a rival bid to Ken Bates' worth £10 million in hope of the creditors and football league approving his bid above Ken's. The bid included eventual plans to build a new 50,000 seater stadium as part of a 'world class leisure venue', as well as providing £25million in funds to stabilise the troubled club [cite web |url=http://home.skysports.com/list.aspx?hlid=465788&CPID=10&clid=2&lid=4&title=Morris+makes+move+for+Leeds&channel=& |title=Morris Makes Move For Leeds |accessdate=2007-05-09 |date=9 May 2007 |publisher=Sky Sports] . It was revealed that a large amount of Leeds' debt was owed to many ex-players whom left up to three years prior to the club entering administration, £18 million of the £35m was however owed to three companies [cite web |url=http://home.skysports.com/list.aspx?hlid=467214&CPID=10&clid=2&lid=&title=Leeds'+debts+broken+down&channel=& |title=Leeds' debts broken down |accessdate=2007-05-22 |date=17 May 2007 |publisher=Sky Sports] , and £6 million owed to HMRCFollowing the announcement that the CVA would be heard and voted upon by the clubs creditors on 1 June 2007 [cite web |url=http://www.leedsunited.com/page/NewsroomDetail/0,,10273~1025914,00.html |title=Statement |accessdate=2007-05-17 |date=16 May 2007 |publisher=LeedsUnited.com] , the club's previous chairman Gerald Krasner offered to represent the club's creditors free of charge to stop Bates from re-gaining control of the club, after it was revealed that each creditor would receive 1p for every pound they were owed if Bates' bid was successful [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6665933.stm |title=Krasner fury at Bates' Leeds bid |accessdate=2007-05-17 |date=17 May 2007 |publisher=BBC Sport] . The deal however contained a clause that this would rise substantially if the club attained promotion the Premiership within the next five seasons (before 2012-13) [cite web |url=http://home.skysports.com/list.aspx?hlid=470099&CPID=11&clid=2&lid=5&title=Bates+back+at+the+helm |title=Bates back at the helm |accessdate=2007-06-04 |date=4 June 2007 |publisher=Sky Sports] . On 21 May 2007 32 of the 36 players in the Leeds squad agreed to defer their wages until the club had emerged from administration; the remaining four were paid by the administrators [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6676657.stm |title=Leeds players agree wage deferral |accessdate=2007-05-21 |date=21 May 2007 |publisher=BBC Sport] . On 23 May 2007 Revie provided proof of funds backing his bid making three bids for the creditors to decide between [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6641471.stm |title=Revie edges closer to Leeds bid |accessdate=2007-05-23 |date=23 May 2007 |publisher=BBC Sport] . Ken Bates stated after this rival bid that his bid will be the only one to save Leeds from annihilation [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6702239.stm |title=Bates warning over Leeds future |accessdate=2007-05-29 |date=29 May 2007 |publisher=BBC Sport] . On the day before the CVA, KPMG revealed that there were five offers in total on the table for Leeds United including, Bates', Morris' and Revie's, however KPMG stated they expected Bates' offer to be accepted [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6709093.stm |title=Five consortia lodge Leeds intent |accessdate=2007-05-31 |date=31 May 2007 |publisher=BBC Sport] . On 1 June 2007 75.02% of the creditors voted in favour of Ken Bates' bid, however it was so close a recount was scheduled for the following Monday. The meeting intended to decide the fate of the club was prolonged due to "heated objections" to the sale process and there was some debate on whether one of the four other bids would be better for creditors [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6709093.stm |title=Recount for Leeds Utd sale vote |accessdate=2007-06-01 |date=1 June 2007 |publisher=BBC Sport] . Simon Morris revealed on 2 June 2007 that he was improving his offer to 40x that of Bates' in order to try and secure CVA approval in his favour, with creditors receiving 20p in the pound straight away and 20p in the pound over a set period of time. Morris' bid was too late however, with a recount only being due on the following Monday and not another vote [cite web |url=http://home.skysports.com/list.aspx?hlid=469942&CPID=11&clid=2&lid=&title=Morris+makes+late+Leeds+bid |title=Morris makes late Leeds bid |accessdate=2007-06-02 |date=2 June 2007 |publisher=Sky Sports] . The recount ended in Bates' favour with 75.20% of the vote going his way meaning Bates now had full control of the club [cite web |url=http://news.bbc.co.uk/1/hi/business/6718353.stm |title=Bates regains Leeds Utd control |accessdate=2007-06-04 |date=4 June 2007 |publisher=BBC News] . A period of 28 days still hung over the club, to allow any appeal against Bates regaining control to be lodged, and former Leeds director Melvyn Levi has hinted that this could occurcite web |url=http://news.bbc.co.uk/player/sol/newsid_6710000/newsid_6719300/6719383.stm?bw=bb&mp=rm |title=BBC Sport Player - Bates regains control of Leeds United |accessdate=2007-06-04 |date=4 June 2007 |publisher=BBC Sport] . The 28 day period also stopped any player transfers from occurring.

CVA Challenge

One day before the 28 day period was due to end, Bates altered his offer to ensure it was not challenged. He altered the clause stating that if Leeds made the premiership in five years then the creditors would receive an extra 30p in the pound, extending this period of time to 10 years, and increased the amount they would receive from 1p in the pound to 8p in the pound straight away [cite web |url=http://news.bbc.co.uk/1/hi/business/6262260.stm |title=Leeds Utd creditors get more cash |accessdate=2007-07-02 |date=2 July 2007 |publisher=BBC News] cite web |url=http://www.leedsunited.com/page/NewsroomDetail/0,,10273~1065797,00.html |title=Statement |accessdate=2007-07-02 |date=2 July 2007 |publisher=LeedsUnited.com] . The 28 day period was due to come to a close on 3 July 2007 at 4pm (BST). With just minutes to spare HM Revenue & Customs challenged the CVA. This left a very uncertain future and possibly liquidation of the club [cite web |url=http://news.bbc.co.uk/1/hi/business/6266508.stm |title=HM Revenue to challenge Leeds Utd |accessdate=2007-07-03 |date=3 July 2007 |publisher=BBC News] . Bates had previously stated "If there is a legal challenge, it could take two or three months to get to court and be decided. In the meantime, who is going to pay to run the club? So far it's been funded by the 'new Leeds', but if there is a challenge, the 'new Leeds' won't do it because it's a risk. The implications are that the club would close down. It would mean liquidation. Leeds United would cease to exist, and the loss of 500 jobs would be a further drain on government resources." [cite web |url=http://home.skysports.com/list.aspx?hlid=475077&CPID=11&clid=2&lid=&title=Bates:+Leeds+could+close+down |title=Bates: Leeds could close down |accessdate=2007-07-04 |date=4 July 2007 |publisher=Sky Sports] With the intention to challenge the CVA announced by HMRC, Simon Franks announced he was determined to buy Leeds United through his Redbus investment vehicle. He commented "We are absolutely committed to gaining control of Leeds United and to rebuilding the club, We have already told the liquidator that we will cover short term liquidity problems and that will be standing by our bid and will increase it given certain information. Our bid was significantly better than Ken Bates' and we are in a position to move very quickly if we are offered the right commercial terms." [cite web |url=http://news.bbc.co.uk/1/hi/business/6271226.stm |title=Rival suitor eyes Leeds Utd bid |accessdate=2007-07-04 |date=4 July 2007 |publisher=BBC News] Following the challenge by HMRC the club was put up for sale by KPMG, with only offers before 5pm (BST) on Monday 9 July 2007 being accepted [cite web |url=http://news.bbc.co.uk/1/hi/business/6279340.stm |title=Debt-ridden Leeds put up for sale |accessdate=2007-07-07 |date=6 July 2007 |publisher=BBC News] . Former Leeds commercial director Adam Pearson also stated he intended to make a bid for Leeds however Ken Bates has stated that he will take legal action if any other bid than his own is successful [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6281628.stm |title=Pearson set to make Leeds offer |accessdate=2007-07-08 |date=8 July 2007 |publisher=BBC Sport] . After the deadline had passed it was revealed that Simon Franks and Simon Morris had joined forces to bid for the club [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6281628.stm |title=Battle to buy Leeds intensifies |accessdate=2007-07-09 |date=9 July 2007 |publisher=BBC Sport] . After Much deliberation KPMG revealed that once again they had chosen Ken Bates' bid [cite web |url=http://news.bbc.co.uk/1/hi/business/6292746.stm |title=Leeds United resold to Ken Bates |accessdate=2007-07-11 |date=11 July 2007 |publisher=BBC News] . The league eventually sanctioned the sale to Bates without the club going through a CVA under the "exceptional circumstances rule" but imposed a 15 point deduction due to not following football league rules on clubs entering administration [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6920103.stm |title=Leeds hit with 15-point penalty |accessdate=2007-07-04 |date=4 August 2007 |publisher=BBC Sport] . On 31 August 2007 HMRC decided not to pursue their legal challenge any further therefore accepting Bates' final offer [cite web
url=http://www.yorkshireeveningpost.co.uk/leeds-united-news/Taxman-pulls-out-of-Leeds.3163456.jp |title=Taxman pulls out of Leeds United court challenge |accessdate=2007-08-31 |date=31 August 2007 |author=Paul Robinson |publisher=Yorkshire Evening Post] .

15 Point Deduction Appeal and Legal Challenge

After an appeal against the 15 point deduction was rejected by both the Football Leaguecite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6937521.stm |title=Leeds lose points penalty appeal |accessdate=2007-10-10 |date=9 August 2007 |work=BBC Sport] and the FA [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/7017746.stm |title=No change on Leeds points saga |accessdate=2007-10-10 |date=28 September 2007 |work=BBC Sport] , LUFC Limited have stated that they will seek legal advice in regards to overturning the penalty imposed. On 23 November Leeds United requested that their 15-point deduction to be adjudicated by the High Court rather than the Football Association after having failed in two requests to the FA to set up an independent commission to review that decision. The Leeds Board Commented "In effect, the same individual confirmed his own earlier decision, There was no independent review." [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/7110257.stm |title=Leeds demand High Court hearing |accessdate=2007-11-23 |date=23 November 2007 |publisher=BBC Sport] This request was however also rejected by the F.A. [cite web |url=http://www.yorkshireeveningpost.co.uk/leeds-united-news/Leeds-United39s-FA-snub-over.3529586.jp |title=Leeds United's FA snub over points penalty |accessdate=2007-11-28 |date=28 November 2007 |publisher=Yorkshire Evening Post Online] . Leeds eventually served the Football League with a writ for the points deduction challenge to be heard in the high court [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/7240389.stm |title=Leeds urge court to act quickly |accessdate=2008-03-05 |date=12 February 2008 |publisher=BBC Sport] however on the final day available to respond to the writ the Football League offered Leeds a closed doors arbitration hearing instead [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/7266563.stm |title=Leeds fight set for arbitration |accessdate=2008-03-05 |date=27 February 2008 |publisher=BBC Sport] . The panel was made up of Peter Cadman, whom had chaired past Premier League disciplinary commissions, Peter Leaver, the former Premier League chief executive, and chaired by Sir Philip Otton a High Court Judge experienced in football legal matters [cite web |url=http://www.guardian.co.uk/football/2008/apr/01/sport.comment |title=Date and panel named for Leeds points appeal |accessdate=2008-03-05 |date=1 April 2008 |publisher=The Guardian] . Leeds accepted this and after the panel heard both sides of the argument between 16 April and 21 April 2008 they eventually returned a decision on 1 May. The decision returned denied Leeds any points return. Two of the main reasons given for the rejection by the three man arbitration panel include the impact of a reinstatement of any points on other teams near the top of League One and the delay in bringing the matter to arbitration [cite web |url=http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/7375942.stm |title= Leeds points appeal unsuccessful |accessdate=2008-03-05 |date=1 May 2008 |publisher=BBC Sport] . The Arbitration Panel released [http://www.football-league.premiumtv.co.uk/staticFiles/4b/ec/0,,10794~126027,00.pdf short] and [http://www.football-league.premiumtv.co.uk/staticFiles/4c/ec/0,,10794~126028,00.pdf extended] documents detailing the final decision.

Notes

External links

* [http://www.redbus.co.uk/ Redbus Investment]