Leeds Utd: creditors were satisfied, not a Liquidator’s Charter

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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

  1. Over..and...Over on

    For me,

     

     

    YES my cyber friend, really excited about playing a round of golf with BBJ

  2. Zbyszek

     

     

    I do not rush to judgement.

     

     

    Kojo is entitled to tweak the noses of anyone he considers a professional leftie or any other schoolyard term. He is entitled to be right wing and unrepentantly capitalist. All that is just knockabout froth.

     

     

    He will provoke justified reaction if he gives the impression of being racist and does nothing to correct that impression. An honourable person, whilst admitting to harbouring prejudices and irrational thoughts, as we all do, would be ashamed, and should be ashamed, to be thought racist.

     

     

    Some narcissists think it is a sign of weakness to say sorry and to make amends. For me, it is the mark of a man that he is able to do so.

  3. Neil canamalar Lennon hunskelper extrordinaire on

    ST

     

    You said it was my local and I should get off the blog and go back to the rosevale where I belong, I was a hun.

     

    Stop wriggling and pay up it’s a great cause

  4. over & over

     

     

    it was darts, point…

     

    sorry for the crap joke, just trying to lighten the mood…

  5. philvisreturns on

    harryhoodsdugbitme – Check back on his views on mental illness and suicide.

     

     

    Harry, I’ve suffered from bouts of serious depression all of my adult life. At times I did think I would kill myself.

     

     

    I don’t really want to know what Kojo thinks about that, unless he’s a doctor, but I am acutely aware that most people don’t understand it at all unless they’ve lived through it. As a result, it’s quite possible for their opinions on the matter to be fatuous. (thumbsup)

     

     

    Summa of Sammi…. – He Didn’t Bring it Down..He Sang on it..With a Flashing Leather Jacket on..UberHoff..

     

     

    He didn’t even need Turbo Boost. (thumbsup)

     

     

    setting free the bears – The most depressing thing about Joe McCarthy’s life is that history proved he was right about Communist infiltration in the US. (thumbsup)

  6. philvis

     

     

    It was an open secret. They formed a US Communist Party and it is still going.

     

     

    It was Joe McCarthy’s unique contribution to try and steer the red scare so that socialist, liberals, no-good nicks, and anyone that looked funny got lumped in as an enemy of the people. Arthur Miller and Ring Lardner Jnr were denounced too.

     

     

    It was a sorry attempt at trying to identify Patriotism with a particular party. Fox has many modern day McCarthys and the US has churches which consider it a sin to vote Democrat.

     

     

    McCarthy distracted the US from pursuing legitimate targets by being prejudiced against too wide a demographic

  7. setting free the bears

     

     

    I sent you short mail, my friend.

     

    He got yellow card, his post was deleted and in my opinion that should be the end of the story.

     

    Since last night I saw posts with:

     

    a)people calling him racist

     

    b)people calling him fascist

     

    c)people blaming Paul67 for all bad that is happening on this blog

     

    d) pepole telling that CQN (in a whole) is awful place

     

    etc.etc

     

    I remember awul nights under late Strachan era and Mowbray era. I remember people fighting on this site, posting awful things. CQN is like the society, no beter no worse. People are not Celtic supporters and not Celtic supporters. They are wise or stupid.

     

    Too much Kojo since last night and that was my point.

  8. Sadly, the blog has been the usurped by those who are prepared to go to extreme views to garner the attention that they lust for, it’s been a poor blog today perhaps its just natural as we’re all different…… we have a league to win let’s talk Celtic and the victory ahead.

     

     

    V

  9. Surprise surprise,

     

     

    The resident walloper has upset the blog.

     

     

    Do what any decent person would do, and as I elected to do years ago – SCROLL on by!

     

     

    This Blog is too important, it reaches out to Our Support across the world, to be affected by irrelevancies like him.

     

     

    On the main point of the evening – anyone who thinks that voting SNP after reading Salmond’s letters should hand in their season book.

     

     

    Hail! Hail!

     

     

    DavieL

  10. Enrico Dandolo nicked my Crusade on

    Good night fholks.

     

    And remember, no matter what the outcome, they are up the creek, no paddle, for years to come. And never let them forget they are straight up cheats no dignity.

     

     

    All the best

     

     

    Eric

  11. Big Nan, Blantyretim,

     

     

    Since you mentioned it (and I’ve seen regular reference to it) – this Waverley Market “deal” is a nonsense story generated by tabloids seemingly ignorant of what is involved. It was “bought” for £37M – collapsing the overarching lease structure for £1 is consistent and in keeping with the earlier abolition of the feudal system.

  12. Zbyszek

     

     

    Understood!

     

     

    Meanwhile, back in the real world, I hope you and your family are keeping well and thriving.

     

     

    6 games to go is it before Legia are crowned champions??

  13. !!Bada Bing!! on

    Vmhan Supporting Lenny! on 4 April, 2012 at 23:15 s

     

    hear,hear,we’ve had better days on here.Night bhoys.

  14. paul67 / pf ayr

     

     

    after more digging it looks like i was a bit wrong (surprise , eh?), well partly

     

     

    the cva that was agreed collapsed when hmrc challenged it in court and it became clear that the club would have to cease trading before any legal battle ran its course. kpmg withdrew the cva and it became invalid

     

     

    they then put the club up for sale in the hope of realising as much value as possible for the creditors. ken bates offer involved less money paid for the business but more money to the creditors as one of the main creditors agreed to waive any sort of dividend on the sale (sounds familiar) so the amount owed to creditors was smaller and any amount paid for the club would go further

     

     

    there was no new cva, there was no cva at all as was obvious shortly after when the football league docked them another 15 point for not exiting administration via a cva. kpmg simply sold the club to bates as his offer guaranteed the best return to credtiors

     

     

    part of his deal was that he would honour the terms of the cva that was originally agreed, 8p in the pound. so in effect the creditors werent stiffed for all the money they were owed but bates paid a lot less for the club than the value of the debts, which were estimated at £35m

     

     

    so in a way all the creditors who voted for the cva originally got what they wanted, but it does mean that there is a precedent for a club being sold by administrators without a cva being in place. leeds united were not a newco, they were able to continue playing the football league thanks to special dispensation from the football authorities (again, sound familiar)

     

     

    matters were simpler at leeds as they didnt own their ground and the assets were pretty much the club as an entitty

     

     

    all this is much better explained in these two articles

     

     

    http://www.mightyleeds.co.uk/seasons/200708part1.htm

     

     

    http://www.clubsincrisis.com/leeds_united.html

  15. Dear oh dear what a day…so much sanctimonious claptrap by so many self righteous, never uttered a wrong word, do-gooders.

     

     

    Can we not just discuss Celtic or at this present time… the demise of der hun without recourse to unnecessary prolonged critisism of ONE person who has merely exercised an opinion? So it may not be to the liking of some, and I include myself, but for goodness sake at the end of the day lets move on. Any decisions to be made will be by our site moderator….end of.

  16. Hamiltontim @22.31,

     

    You find it incredible that I don’t share all your opinions? That’s your problem – not mine.

     

    At no time have I defended Kojo’s deleted post: do stop misrepresenting me.

     

    I criticised another poster because he’s a foul-mouthed liar & a Hun (at heart, anyway). You should be ashamed to stick up for him.

  17. harryhoodsdugbitme on

    Philvis. Silly or uncaring or whatever. He doesn’t seem to care. Poison really. Whatever. Hail Hail.

  18. The Hat.

     

    It is not quite as simple as you make out and the Waverley Market should not belong to anyone as it is a common good asset of the peoples.

     

     

    It was originally given out on a lease that was extended to 208 years at a Penny a year.

     

     

    Normal you say. Hardly.

     

     

    My information on this does not come from tabloids it comes from Andy Wightman’s extensive research on the matter. Suggest you read it.

     

     

    http://www.andywightman.com/wordpress/?p=720

  19. setting free the bears

     

     

    Will try to send you longer mail soon, my friend.

     

    Ha, that is better conversation now.

     

    Yes, we are six games into the finish. I hope we will win this league. I wonder how it would be if Legia meets Celtic in the final stage for the Champions League.

     

    I need to watch another Slask Wroclaw game. I see that Fojut’s team is loosing many goals lately. I wonder how is he playing? Maybe his thoughts are in Glasgow? I must chack if Jaroslaw is to blame for goals conceded?

  20. Clashcitybhoy on

    Wonder whether our club owner will be at Kilmarnock on Saturday , …..are there direct flights from Prestwick to Augusta ?

  21. Dear oh dear, and this is us on the cusp of our first league title in 3 yrs

     

     

    Imagine the infighting on here if we were in Administration or worse !

     

     

    Not cqn’s finest nite chaps, however tmoro is a new day and the writing is on the wall for our govan foes. So cheer up things could be worse HH

  22. Neil canamalar Lennon hunskelper extrordinaire on

    Invercelt,

     

    I’d like to offer you the opportunity to tell me that to my face

  23. canamalar a friend of mine who is no hun drink in that pub cause some of his mates are them

     

    once again, please find a posting where i have called a fellow tim a hun!!

     

    loweset of the low comment as far as i am concerned, lowest of the low

  24. Reiperman @ 22.39,

     

    Yes, really.

     

    Embarassed? Not at all – tho’ you may be.

     

    Out of the discussion? It’s the norm with those who argue with me – but at least you ‘ve not descended to obscenity like the “adaptation”.

  25. Neil canamalar Lennon hunskelper extrordinaire on

    ST

     

    You called me it

     

    That was my point

     

    And you know you did

     

    Now if 10’is too steep

     

    Don’t make offers you don’t intend

     

    Keeping

  26. Just in, read back on posts re newco….. A few on here ( and Paul 67) seem to think it’s a foregone conclusion that Zombie FC will waltz back into SPL and we should just face up to it.

     

     

    Even with penalties that would be totally unacceptable

     

    We’ve always suspected the game has been rigged, when they start doing it openly that’s enough for me i’m afraid!

     

     

    Paul 67 … Please tell me the club that I love isn’t party to this corruption.

  27. Big Nan,

     

     

    Common good is a separate issue. If it is indeed common good land – great. The £37M already generated for selling the asset by way of a long lease should be credited to the common good fund appropriately.

     

     

    Granting long leases of land to developers for large up front premiums and £1 a year rent thereafter is common commercial practice.

  28. Moonbeams WD

     

    Two answers , Sir.

     

    Not long time ago I watched Tv programme about Polish nun. She is working with people rejected by all. Saint lady , wonderful lady. She is swearing sometimets like Celtic supporters in Bobbity Bowsters.

     

     

    When my father was fighting the cancer and was losing the fight I had conversation with him.

     

    He told me: look Z, I know I’m dying, but I would like to know how much time do I have to do few things before I pass? You spoke with the doctor and you probably know that.

     

    At the end of the conversation he said: At the end of the day it does not matter when? It does matter how?

     

    I want to remember that until last day of my life.

     

    Sorry for that serious second part of my answer.

     

    Now you know, or I hope you will know one day.

  29. I see the blog is still in a sullied mode.

     

     

    Just watched the BBC1 prog on sexism in football (still on).

     

    I was lucky enough to be at a press conference at Falkirk vs Celtic.

     

     

    It was the 20th/21st of December as i remember.

     

    John Yogi Hughes was wheeled out and amongst the assembled press pack there was one female reporter.

     

     

    Before he took his seat Big Yogi saw her and said “Should you not be doing your Christmas shopping?”

     

    Cue laughter from the assembled non-internet users and one embarrassed female reporter. I just felt uncomfortable. Everyone else? It appeared that it was just the way it is and a shrug of the shoulders.

     

     

    Howevah…..that was the same press conference that Gordon Strachan was vilified. A Falkirk (I believe) spokesman asked the press to respect GS’s wishes that no-one asked any questions about Aiden McGeady and concentrated on the game. (There was a lot of speculation that Aiden was leaving and having a spat with the manager at that time).

     

     

    Gordon duly arrives. First question – Hugh Keevins – “Gordon, can you confirm if Aiden will be leaving the club?”

     

     

    Gordon does not say a word. Stands up and leaves. Next day the press has a field day.

     

     

    Would that have happened with the cardigan?

     

     

    Wee Skippy did come out and say a few words and was very eloquent but the MSM had their headline.

     

     

    Keevins – if you are viewing – I’ve heard you and seen you in operation. When i saw you in action you were asked to respect another man’s wishes and denied them. Says a thousand words more than you wrote about him.

     

     

    Rant over.

     

     

    HH

  30. The Hat on 4 April, 2012 at 23:41 said:

     

     

    Big Nan,

     

     

    Common good is a separate issue. If it is indeed common good land – great. The £37M already generated for selling the asset by way of a long lease should be credited to the common good fund appropriately.

     

     

    Granting long leases of land to developers for large up front premiums and £1 a year rent thereafter is common commercial practice.

     

    ………………………………

     

    Read Whightman again and don’t assume that I read tabloid newspapers.

     

     

    The tabloids say Sir David Murray is a wonderful businessman and honest as the day is long.

     

     

    I expect you will be telling me that too.

     

     

    Goodnight and God bless.

  31. Over..and...Over on

    That wound up tomorrow about the golf, I have not had the chance to read back on the nights posts yet……

     

     

    However having now made the time to read back their has been some rockets on tonight from the racicst to other posters calling fellow Celtic supporters huns, could I make a humble suggestion to all the attention seekers can you not do what the horse tipsters do and go back to the end of the last article and argue away to your wee hearts are content.

  32. Paul,

     

    I’ve noticed a rather threatening post by Neil Celtskelper: I see I ‘ve got to him.

     

    When he had an exchange with me, he accused me of “trying to dictate where & what he could post” – a downright lie. I won’t repeat his obscenity as that would be descending to his level, but’s it’s there in his post (a few weeks back).