Times Online - Sport
Role of Richmond in takeover leaves Leeds fans uneasy
BY ASHLING O'CONNOR
AFTER talk of Ugandan property developers, Bahraini sheikhs and Chinese billionaires coming to their rescue, Leeds United yesterday found salvation closer to home when a Yorkshire-based consortium agreed a takeover. The endangered Barclaycard Premiership club is now in the hands of a group of local businessman, with links to Geoffrey Richmond, the former Bradford City chairman, who have invested an estimated £22 million to avoid administration by paying off the main creditors.
Leeds had accumulated debts of about £100 million after a player spending spree under Peter Ridsdale, the former chairman, predicated on the assumption they would qualify for the Champions League every season. Most of that debt has been wiped out by the takeover. It is understood that the new owners have settled a £60 million loan with three bondholders — M&G in the UK and MetLife and Teachers in the US — as well as a £22 million debt to Registered European Football Finance, a Guernsey-based player leasing company, and Gerling, its insurers.
The companies were prepared to accept an up-front payment considerably lower than the sum they were owed over 25 years for fear of receiving nothing at all if the club went into administration. Should Leeds perform well in the future, they will be entitled to bonus repayments. Shareholders in Leeds, including Professor John McKenzie, the former chairman, will receive nothing after the public company that owned the club was put into administration.
“I am convinced this is the best deal,” Garry Wilson, joint administrator and a partner at Ernst & Young, said. “We marketed this worldwide but the financial position was so dire the interest was limited. We had the sheikh and the Ugandan businessman but this was the only consortium that was able to provide evidence of funding to convince the creditors a deal could be done.”
The football club, the Elland Road stadium and the Thorp Arch training grounds are now owned by Adulant Force Limited, the company formed by the businessmen led by Gerald Krasner, a local insolvency expert. The new owners are still left with trade debts of £20 million. Eddie Gray, the caretaker manager, said: “I think it will ease the minds of people around the club and hopefully we will go forward.”
Krasner, appointed club chairman, sought to reassure fans about the future of Elland Road by “categorically” denying that a move was on the agenda. “Leeds is off life support,” he said after seven weeks of intense negotiation ended in a deal. He is expected to meet the players next week to reassure them their deferred wages will be paid at the end of the season.
However, there is still discomfort among fans over the involvement of Richmond, who left Bradford heavily in debt. The club recently went into administration for the second time since his departure. He advised the Leeds consortium and his son, David, who was also on the Bradford board, is Leeds’s new commercial director. “These people cannot have the interests of fans at heart or they would not have let a man like Richmond near Leeds,” John Boocock, chairman of the Leeds United Supporters’ Trust, said.
In a move interpreted as an appeasing nod towards the fans, the consortium has appointed Peter Lorimer, the club’s goalscoring legend, to the board. It is unlikely to impress many fans who have endured much over the past two years. One, a former club mascot, said: “These people are to football what King Herod was to babysitting. I fear for the future of my club.”
Yet the deal was the only one on the table for Trevor Birch, the former insolvency specialist credited with saving the club. He is expected to stay on at Leeds for a few months but is expected to leave for another job in football.
In the meantime, he and other directors involved with the club over the past three years can expect to be quizzed by one of the administrators. Brendan Guilfoyle of The P&A Partnership, the insolvency specialists, will compile a report for the Department of Trade and Industry on the situation at Leeds. The DTI will then decide if it is in the public interest to disqualify any directors.
Role of Richmond in takeover leaves Leeds fans uneasy
BY ASHLING O'CONNOR
AFTER talk of Ugandan property developers, Bahraini sheikhs and Chinese billionaires coming to their rescue, Leeds United yesterday found salvation closer to home when a Yorkshire-based consortium agreed a takeover. The endangered Barclaycard Premiership club is now in the hands of a group of local businessman, with links to Geoffrey Richmond, the former Bradford City chairman, who have invested an estimated £22 million to avoid administration by paying off the main creditors.
Leeds had accumulated debts of about £100 million after a player spending spree under Peter Ridsdale, the former chairman, predicated on the assumption they would qualify for the Champions League every season. Most of that debt has been wiped out by the takeover. It is understood that the new owners have settled a £60 million loan with three bondholders — M&G in the UK and MetLife and Teachers in the US — as well as a £22 million debt to Registered European Football Finance, a Guernsey-based player leasing company, and Gerling, its insurers.
The companies were prepared to accept an up-front payment considerably lower than the sum they were owed over 25 years for fear of receiving nothing at all if the club went into administration. Should Leeds perform well in the future, they will be entitled to bonus repayments. Shareholders in Leeds, including Professor John McKenzie, the former chairman, will receive nothing after the public company that owned the club was put into administration.
“I am convinced this is the best deal,” Garry Wilson, joint administrator and a partner at Ernst & Young, said. “We marketed this worldwide but the financial position was so dire the interest was limited. We had the sheikh and the Ugandan businessman but this was the only consortium that was able to provide evidence of funding to convince the creditors a deal could be done.”
The football club, the Elland Road stadium and the Thorp Arch training grounds are now owned by Adulant Force Limited, the company formed by the businessmen led by Gerald Krasner, a local insolvency expert. The new owners are still left with trade debts of £20 million. Eddie Gray, the caretaker manager, said: “I think it will ease the minds of people around the club and hopefully we will go forward.”
Krasner, appointed club chairman, sought to reassure fans about the future of Elland Road by “categorically” denying that a move was on the agenda. “Leeds is off life support,” he said after seven weeks of intense negotiation ended in a deal. He is expected to meet the players next week to reassure them their deferred wages will be paid at the end of the season.
However, there is still discomfort among fans over the involvement of Richmond, who left Bradford heavily in debt. The club recently went into administration for the second time since his departure. He advised the Leeds consortium and his son, David, who was also on the Bradford board, is Leeds’s new commercial director. “These people cannot have the interests of fans at heart or they would not have let a man like Richmond near Leeds,” John Boocock, chairman of the Leeds United Supporters’ Trust, said.
In a move interpreted as an appeasing nod towards the fans, the consortium has appointed Peter Lorimer, the club’s goalscoring legend, to the board. It is unlikely to impress many fans who have endured much over the past two years. One, a former club mascot, said: “These people are to football what King Herod was to babysitting. I fear for the future of my club.”
Yet the deal was the only one on the table for Trevor Birch, the former insolvency specialist credited with saving the club. He is expected to stay on at Leeds for a few months but is expected to leave for another job in football.
In the meantime, he and other directors involved with the club over the past three years can expect to be quizzed by one of the administrators. Brendan Guilfoyle of The P&A Partnership, the insolvency specialists, will compile a report for the Department of Trade and Industry on the situation at Leeds. The DTI will then decide if it is in the public interest to disqualify any directors.
