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.
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1,227 Comments- Pages:
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Yorkbhoy-Danny Murphy from Fulham as an experienced CM for me.
http://www.leedsunited.com/page/Honours/0,,10273,00.html
jimtim on 4 April, 2012 at 12:38 said:
Stag do by any chance? Last time I was in budapest I changed the bulk of my spending money to the local currency but took some euros also.
yellow for Kojo. does that count for all of his persona? or just Kojo?
;)
Paul 67-Do you think liquidation is still a distinct possibility?
CirenBhoy on 4 April, 2012 at 12:41:
Ticketus are still a main Creditor, although this is still in the melting pot.
If, as reported yesterday Ticketus were no longer a creditor HMRC are the only real debt. Also on EBT if a CVA was to be entered into without this resolved it will crystalise after CVA leaving the club back in mire. If it is taken into account then HMRC debt must be recognised and CVA option is controlled by HMRC.
HMRC will have a big say in what happens, so much so they will pull the strings.
CVA…
I smell liquid…
Keep the Faith!
Hail Hail!
bada bing
No, unfortunately not. He only received a yellow card!
HH
Bada
Good shout re Murphy. What age is he?
@CelticNetwork11: SNP in Secret talks with Rangers* ? – http://t.co/8OE3EZbs via @CelticNetwork11
Seedorf played his last game in Champs League last night or did he..
he is only 36… o))
Nurse…..
Awe Naw, I was going to respond to your post on the last blog but we’d just be arguing about semantics. Paul has deleted the post now so issue over. until Kojo’s back on at least.
Hail, hail.
PS Histrionic poodle? That made me laugh.
Quickdraw
I never said ignore racism … and nobody has from what I can see
I said I ignore kojo so have others
And there is a good reason for that. Guess why ?
So your post is Lazy journalism of the histrionic poodle variety which is a pity here on the land of non lazy journalism.
Hail Hail
Danny Murphy 35…
Why are the SFA part paying the huns debt to UTD. I thought that thems were told to pay UTD by a certain date and if this was not met they would be punished by not being allowed into Scottish Cup next season. Or do the SFA know they will not be in the cup next year, or even in existence.
Confused.
HH
BT
I’d take him in a second!
Gordon_J – Will Craig Whyte remain as the pantomime villain or will David Murray’s role in the club’s demise at last be discussed in full?
Good choice of word: pantomime.
Craig Whyte is being cast as Jafar from Aladdin, but he’s really just Buttons.
Duff and Phelps are now asking the children to clap their hands if they believe in magic money fairies.
But what’s that? Oh no, it’s Hector the tax collector! And he doesn’t look happy.
It’s behind you, Rangers! (thumbsup)
mighty tim on 4 April, 2012 at 12:59 said:
The SFA paid Utd with money that should have gone too the orcs..
Just received from ‘houl yer wheesht.
If you don’t laugh at this, you must have lost all connection with yer childhood.
Happy Easter
Hail Hail
Estadio
Celticbhoy on 4 April, 2012 at 12:50 said:
To the tune of Walking in a Winter Wonder Land:
There’ll be no Glasgow Rangers
There’ll be no Glasgow Rangers
they’RE TAX THEY can’t pay
AND SO WE’RE laughing all day
WHILE watching Glasgow Rangers pass away.
(repeat )….
Suggested changes in bold to make it flow a wee bit better :¬)
V
Hybrid Liquidation simply explained
Government interference again bhoys, I’ve emailed Paul with this info.
Where is UEFA when you need them.
Danny Murphy would be a great signing. Imagine the benefit to Ibrahim/George of having someone with his creativity, tactical awareness and experience.
Excellent short term signing who, wages permitting, is exactly the type of character we need in our dressing room. I would love us to sign him.
I posted a comment on the Kojo controversy on the last thread before realising that a new article had already been put up. Paul has dealt with the situation in what seems an eminently sensible way to me, so I’m not going to re-post my comment on this thread, but anyone who wants to read it can see it here.
Estadio on 4 April, 2012 at 13:01 said:
Me and mini got egg on our faces…
hahaha
Happy Easter…
starry plough thanks for that.
HH
For interested parties, the definitive Leeds Utd admin chronology etc;
http://www.mightyleeds.co.uk/pdf/season200708chronology.pdf
Paul67 on 4 April, 2012 at 12:46 said:
there was no agreement
hmrc challenged it, the administrators withdrew it and then sold the club to bates
The taxman has pulled out of its day in court against Leeds United next week over the controversial sale of the business back to Ken Bates, but says it intends to pursue what it is owed following the club’s collapse.
HM Revenue & Customs said the court challenge, which revolved around legal costs relating to the sale of company via a CVA, was academic following the CVA’s collapse.
‘HMRC’s challenge became academic when the administrators withdrew the CVA,’ it said in a statement.
But the taxman was still working on looking to recoup what is believed to be about £8m in tax owed by the former Leeds company structure that collapsed.
‘…We will continue to take all possible steps to secure an outcome which ensures that taxpayers receive a fair return on the debt owed to the crown,’ it stated.
Leeds owed 7.7m and have paid back only £154,000
Paul67 on 4 April, 2012 at 12:41 said:
Kojo, good grief!
Deleted. Yellow card.
We have all at one time or another fell foul of the rules on CQN,,,but last nights comments were disgraceful,cant be allowed to happen again!!!
Hail hail
Jimtim, I was in Budapest last year for a stag do and took euros (I think, was pished pretty much the whole time) can’t recall anywhere requiring forients.
Regards old player – Ricardo fuller out of contract end of season
Some info about Hybrid Liquidation. Sorry if already posted.
http://www.rangersrumours.co.uk/rangers-rumours/rangersrumours12308.php
.
iBleedBlackAndBlue..
Ehhh..A Yellow Card is NOT a Ban..it’s a Caution..
or is it Your Blog..
Yir pal Who likes ye Aloater..
Summa
Rangers fans to organise red card protest this weekend against liquidizerationisming. Looking for folk to help put out the red cards on Thursday and Friday.
Declan, will you be volunteering?
Starry, how’s tricks?
Here is an interesting blog article from an insolvency expert who has put some hypothetical numbers (drawn form the available public utterances of D&P) into a comparison of liquidation vs CVA – and which will be better value for creditors.
http://mlm-solutions.blogspot.co.uk/2012/04/issues-facing-administrators-as-closing.html
Summa of Sammi…. on 4 April, 2012 at 13:14 said:
.
iBleedBlackAndBlue..
Ehhh..A Yellow Card is NOT a Ban..it’s a Caution..
or is it Your Blog..
Yir pal Who likes ye Aloater..
Summa
eh???
Hail hail
hamiltontim-Danny Murphy,just turned 35.More of a sub with Fulham these days,came on v Man U last week never wasted a ball from CM and was brought down for a stonewall penalty which ref bottled.Must have made his money now.A shot at the CL or even Europa League,when he was instrumental in Fulham getting to the final 2 years ago,might tempt him.HH.
Timbhoy2,
That’s been a strange one right from the start. Especially his “I might bid but hopefully someone else has a bid accepted before then” comments.
I can only assume he is a wealthy man looking for some free ego-massaging publicity in the Scottish Press. I’d never heard of him until a few weeks ago. Now when he returns to Scotland he will be recognised as “that minted guy who nearly bought Rangers”.
He reminds me of a middle manager turning up at a Porsche garage time and time again for a test drive. He knows he can’t really afford a £60k car and doesn’t really want to throw money like that away but having salesmen fawn over him and the notion that others think he has money makes him feel good.
Strange man.
Or maybe he just wants to see the Hun’s reaction at the idea of having a “Kennedy” as their master!
seventyxseven ‘gelee et glace’ on 4 April, 2012 at 13:15 said:
Got my girls here having a laugh and watching Top Cat!! Pouring from the Heavens here…
Gotta laugh at their wee red card protest, they really are pulling out the stops to save their club..
They don’t deserve a club!!
Stupid stupid huns..
As HMRC are being lobbied to go easy on the institution that is Rangers and the fact that other creditors include the Police, Glasgow City Council, a few ‘friendly’ SPL clubs and the dubious Ticketus, I can envisage a CVA being readily agreed – for the sake of Scottish football and all that. :-(
So it seems we have 10 different people that post on this blog.
Two or three of them have thousands of user names. Glad I know five or six people that post on this blog otherwise I’d think it was only 3 people that post on the blog.