I see Leeds United are being held up as a model for Rangers to liquidate and emerge as a new club. Leeds United’s circumstances are highly unlikely to bear any relationship with those at Rangers unless Duff and Phelps can agree a Creditors Voluntary Arrangement.
Leeds United AFC Ltd entered administration in the control of KPMG Restructuring on 4 May 2007 and on the same day were sold to a new company Leeds United Football Club Ltd subject to a Creditors Voluntary Arrangement (CVA) being agreed. Both Leeds United AFC Ltd and Leeds United FC Ltd were controlled by Ken Bates.
A CVA requires 75% of creditors (by value) to vote to accept a reduced percentage of the money they are owed. The company was forced to act as HMRC, who were owed in excess of £6m, had issued a winding up petition which was due to expire on 25 June 2007.
Before creditors voted on the CVA several other bidders came forward with offers for the club, however, the vote, on 1 June 2007, returned 75.02% of creditors accepting the CVA offer (75.20% after a recount).
Creditors can challenge a CVA within 28 days of the vote. On the 28th day, 3 July 2007, HMRC challenged. With the CVA subject to a challenge, KPMG asked for further offers for the company to be submitted by 9 July 2007. Despite the extended offer period, the administrators still accepted the offer from Ken Bates Leeds United FC Ltd.
With a CVA agreed, subject to challenge, the Football League transferred Leeds United AFC’s league share to Leeds United FC Ltd under its “exceptional circumstances” provision. The League imposed a 15 point penalty on the club for the 2007-08 season for failing to satisfy the outstanding legal challenge in time, necessitating the ‘exceptional circumstances’ rule.
HMRC withdrew their objection to the CVA the following month. Leeds United subsequently appealed against their 15 point penalty citing a CVA had been agreed and that the league programme does not allow time for spurious challenges to be dealt with. The Football League refused the appeal.
Believing Football League procedures were at fault, not their own behaviour, Leeds United served the League with a High Court writ to challenge the points deduction, however, both parties agreed to abide by the findings of an arbitration panel hearing.
The arbitration panel found against Leeds United citing the following two reasons:
A director of Leeds United FC signed an earlier agreement not to commence any proceedings against the League.
Leeds United waited 7 months before commencing the action, which brought unnecessary sporting consequences on other promotion chasing clubs, specifically Doncaster Rovers, who would no longer be in an automatic promotion spot if Leeds’ 15 points were restored.
In summary:
Leeds United AFC Ltd’s administrators achieved the necessary 75% support for a CVA.
They withstood the challenge from HMRC, paid creditors and concluded the transfer of assets, including League share, to Leeds United FC Ltd, according to the terms of the CVA before winding up the old company. No loose ends were left.
This is not a Liquidator’s Charter. Provisions in football only exist to transfer a League share from one company to another if creditors are satisfied, either by being paid in full or, as with Leeds United, with 75% agreeing to accept a diminished amount.
Click here to read CQN Magazine.
Thanks to everyone who has bought a hard copy of issue 7. Order your copy for delivery by clicking on the link below for news and views from Celtic supporters.
Pay by card or Paypal.
1,227 Comments- Pages:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- ...
- 33
- »
Hail Hail
Podium
Has anything really changed over Ibrox way?
Another Deadline – But Liquidation Looms
Top 3?
Forza CQN
Paul67
Review Panel
00.34 Page 6 last thread, do you agree that that post is nazi rhetoric?
KTF
Have they asked for an extension to the 5 o’clock deadline yet?
COmi
Cmon the hoops
Snake
From previous..
Thanks for posting that link, a really enjoyable read.
I’ll still be voting NO though :-)
Close, 4th.
All my systems are down in work, off to London for on Friday for a stag, will be drinking with a London Celtic supporters club on sat morn. Got my flights for last game against then yesterday for 1/3 of the price those same flights currently are now – only a day later! Life is good!
Hail Hail
Roccobhoy
They are getting ever more desperate…clutching at the Leeds straw (again!)…
The Fat Lady is backstage gargling with Green Listerine…
Let the show begin!
HH
I bet Leeds Unt are glad they didn’t have Duff & Duffer managing their affairs, otherwise we could be talking about Damned United right enough.
;o)
paul67
they didnt exit administration via a cva.
Against “them” not then my previous post should have read.
Hail Hail
Roccobhoy
awe naw
re-kojo
I have e-mailed Paul (seriously). Thanks for the address!
I asked him to give you one last chance but I dont think he’s in a very good mood this morning.
HH
Awe Naw no the auld Leeds chestnut again, do these churnalists never tire of writing crap??
What’s the deadline for the deadline of the final deadline??
paul76 whit has leeds got to do with the price of cats. all the papers and the phone ups are saying they are going to be fine. the adbringistrators are saying they wont be liquidised. white is saying they wont be liquidised. my mate who was the only guy who called white for what he was said they wont be liquidised. 2000 spanishmen cant be wrong and all that. you are heading for a kirk broadfoot moment here mate and all our support are sleep walking into next year when they spend their warchest and win the treble. we will be trampled over
hail hail
can i ask for a little advice here bhoys . going to budapest in a few weeks . any advice regards whether to change my money into forints or take euro or sterling . any help appreciated .
jimtim
HH..
Lloyds inject £117.7 MILLION pounds into MIH to reduce debt…
What is it with this man, debt, and people willing to continually help with tens of millions of pounds.??
Murray said”MIH results are very credible”
Aye right David.. That’s why you are in this mess..
HH
Paul67:
So are Leeds Utd now the same team as they were prior to transfer, with same honours listed etc or did they become a new team with no history at the point of transfer?
If “Leeds United AFC Ltd’s administrators achieved the necessary 75% support for a CVA.” then why did they transfer to a new company? Couldn’t they just have proceeded as the same company?
QB Confused.CSC
As things stand, are HMRC still the main creditor?
Anyone know the breakdown of other creditors?
Kojo, good grief!
Deleted. Yellow card.
The difference between Leeds and the huns being the latter is an establishment,secret society backed entity which believes through its actions the law of the land doesn’t apply to it whereas the former was an honest enough club who not only had a realistic chance of winning its gamble which creditors and the public could accept with sympathy but also humbly accepted its position and worked hard to survive.
Anybody know how much of a haircut Leeds’ creditors had to take? I.e. how many pence in the £ they got?
Interesting development…
The Scottish FA has notified Dundee United
FC that they will this week receive £35,000
of the outstanding money from their recent
William Hill Scottish Cup tie against Rangers
FC.
This money will help meet part of the
overdue payable to the club and has come
from broadcasting revenue from the
competition that, under normal
circumstances, would have been distributed
to Rangers.
The Scottish FA has informed both clubs of
this development.
Dundee United would like to thank the
Scottish FA for their assistance in this
matter.
ampeutanach 6p in the pound I think
Moreover.. Pic in today’s herald p2,3.. Given I ken the Bhoys faither and uncle I’m certain it’s what you might call a publicity stunt for the inflatable and yet again given the caption, shows how rubbish Scottish reporters are… They don’t actually get facts..
Laugh out loud..
HH
Still cant understand a hibs fan trying to save rangers.
Just wondering what positions Neil will be looking to strengthen during the summer. If we don’t sell anyone major we should only need 2 or 3 players in my opinion, it would be nice to get some experience in to help the youngsters along. Don’t know who though…
Seems the main argument for things turning out OK for Rangers is ‘we are the people’! Not sure how that argument would go down in a court of law!
Kitalba, just read it. Deleted. Good grief (again).
celtic40me, but they didn’t need to. CVA was agreed, terms adhered to, club sold, former company wound up.
Declan, down with that kind of stuff.
QuadBhoy, they could have continued as the same company but Bates used the sale as an expedient measure. The sale of a football club out-with liquidation or administration is not uncommon.
timbhoy2 – you cant understand a businessman seeing a chance to make money?
Good article Paul,
Rangers Circumstances are very very different to Leeds Utd, both in terms of the nature and extent of creditors, and the legal mess that surrounds the validity of Whyte’s charge over the assets and the position of Ticketus.
In the Leeds case, Bates had a sufficient number of cards to play which enabled him to force through his proposals. In the Rangers case, any similar move by Whyte appears to attract opposition all round, with the dynamics of the body of creditors being such that achieving anything approaching 75% support seems virtually impossible.
Even if the club is liquidated someone will have to deal with Whyte one way or another and there is no bid that I have read of that brings any clarity whatsoever going forward.
Only one thing is clear… and that is that D&P want out!!!!
A lot of my mates in York are big Leeds fans. Fair play to them, they turned out in huge numbers during their period in the wilderness. One of my favourite memories during the 2000s was when we skelped them in a testimonial at Elland Road. I think it was 5-0? I had bragging rights in the workplace for a long time after that.
To the tune of Walking in a Winter Wonder Land:
There’ll be no Glasgow Rangers
There’ll be no Glasgow Rangers
HMRC they can’t pay
So we’ll be laughing all day
Watching Glasgow Rangers pass away.
(repeat )….
How very undignified for Dignity FC’s debts being paid by the SFA.