Yorkshire Post 4/6/07
Bates back in charge at Leeds
By Richard Sutcliffe and Rob Waugh
Ken Bates today regained control of Leeds after a recount of votes taken at last week's creditors' meeting confirmed his offer to buy back the club had been accepted by the slimmest of margins.
Leeds' administrators KPMG were forced to adjourn a stormy meeting on Friday after deciding a recount was required to decide the club's immediate future.
Some creditors argued Bates' offer to pay back money owed by Leeds was not the best on the table and claimed other parties interested in buying the club had not been given a fair chance.
Bates, who placed Leeds in administration with debts of £35million on May 4, required 75% of the vote to have his offer of 1p in the pound accepted by creditors and the original count on Friday showed he had 75.02%.
There were 27,178,255 votes in favour of Bates and 8,965,174 against giving him 75.20% of the vote.
The future of the Elland Road club had been left hanging in the balance over the weekend after the administrators ordered a recount of votes.
Mr Bates began Friday needing a 75 per cent majority to approve his purchase of the club which was placed into administration on May 4 with debts of about £35m.
He received 75.02 per cent of Friday's vote, but with the margin being so small the administrators ordered a recount.
Today, a statement from KPMG read: "Following the Leeds United creditors meetings that have taken place on Friday, June 1 and Monday, June 4, the administrators of Leeds United AFC can confirm the result of the vote on the company voluntary arrangement (CVA) proposal to sell the club to a newly-formed company, Leeds United Football Club Ltd.
"Creditors have approved the CVA proposal, which means, subject to Football League and Football Association approval, the business and assets, including players, of the club will transfer to Leeds United Football Club Ltd, the directors of which are Ken Bates, Shaun Harvey and Mark Taylor.
"The CVA proposal was approved by 75.20% of the creditors who voted, by value. It required 75% of the vote.
"The creditors will receive an initial dividend of 1p in the pound, with a substantial additional dividend to follow in the event that the club regains Premiership status within five seasons."
Richard Fleming, joint administrator and KPMG restructuring partner said: "I'm satisfied that in voting to accept this CVA proposal the creditors have approved a solution that allows the club to plan ahead for next season; reduces uncertainty for all those with an interest in Leeds United; provides some return for creditors and avoids liquidation.
"Leeds United Football Club Ltd must now seek approval from the Football League and can begin to rebuild for next season.
"The supervisors can also begin the process of agreeing creditors' claims for dividend purposes."
The club's Football League share, suspended on May 4, could be returned at the League's board meeting on Wednesday in Portugal, meaning the transfer embargo that has frustrated manager Dennis Wise's rebuilding plans since the end of last season would be lifted.
But any unhappy creditors have 28 days to challenge the outcome of the vote with the amount of claimed debt they have been allocated by the administrator potentially a central issue.
A successful challenge leading to an increase in a creditor's voting power could be significant given the closeness of the vote.
The key player could well be the taxman, with HM Revenue and Customs owed about £7m. If the Bates deal offering creditors just a penny for every pound owed goes ahead, the public purse would be short-changed by virtually the whole amount.
Former Leeds chairman Gerald Krasner, an insolvency practitioner, told the creditors' meeting that a legal challenge is likely.
However, he would not personally lead the challenge, which would involve significant legal costs, though would offer his backing if asked.
But Mr Bates last night told the Yorkshire Post: "They are talking about challenging the result in court. Mr Krasner was very careful to say it would not be him, but that other people may choose to do so.
"But on what grounds will they be appealing? You can't go to a court and say 'we don't like it because Bates won'.
"In any case, we will fight it. If they choose to go to the courts, we will issue a counter-writ for damages because they will be damaging Leeds United. They would be preventing the business from trading."
Last night property magnate Simon Morris, who is behind one of five
alternative bids for the club on the table, ruled out any legal challenge to the result.
Mr Bates said: "I have heard Mr Morris has been suggesting he would like to meet me and discuss the way forward. Well, he knows my number."
Mr Morris said: "Yes I will meet Ken Bates. Everyone knows we are solid bidders.
"We would like to talk to him about taking over his business at Leeds."
On Saturday it emerged Mr Morris would offer creditors up to 40p for every pound owed – 20p initially and 20p based on improved team performance.
But with the creditors' meeting concluded, bar the final vote, the offer can't be put at this stage.
It would only come into play if Mr Bates doesn't win on the recount or if there's a successful legal challenge.
Mr Bates said: "Mr Krasner is making a song and dance about having his votes cut down. But
some of the votes we wanted were cut down.
"Around 8.3 million votes were cast against and the Inland Revenue were responsible for 7.1 million of those. That means Krasner managed to get together just over 1 million. What is that saying about empty vessels making the most noise?"
Mr Krasner declined to comment last night.
Mr Bates added: "KPMG have been thoroughly professional throughout and with 75.02 per cent being such a small margin, they decided to have a recount to make sure.
"We are fairly confident. And once that is done, we can get on with other business.
"There are a number of people who have not made bids to the administrator who are simply waiting to invest in the club.
"We will be proceeding with those talks as soon as this is out of the way."
Bates back in charge at Leeds
By Richard Sutcliffe and Rob Waugh
Ken Bates today regained control of Leeds after a recount of votes taken at last week's creditors' meeting confirmed his offer to buy back the club had been accepted by the slimmest of margins.
Leeds' administrators KPMG were forced to adjourn a stormy meeting on Friday after deciding a recount was required to decide the club's immediate future.
Some creditors argued Bates' offer to pay back money owed by Leeds was not the best on the table and claimed other parties interested in buying the club had not been given a fair chance.
Bates, who placed Leeds in administration with debts of £35million on May 4, required 75% of the vote to have his offer of 1p in the pound accepted by creditors and the original count on Friday showed he had 75.02%.
There were 27,178,255 votes in favour of Bates and 8,965,174 against giving him 75.20% of the vote.
The future of the Elland Road club had been left hanging in the balance over the weekend after the administrators ordered a recount of votes.
Mr Bates began Friday needing a 75 per cent majority to approve his purchase of the club which was placed into administration on May 4 with debts of about £35m.
He received 75.02 per cent of Friday's vote, but with the margin being so small the administrators ordered a recount.
Today, a statement from KPMG read: "Following the Leeds United creditors meetings that have taken place on Friday, June 1 and Monday, June 4, the administrators of Leeds United AFC can confirm the result of the vote on the company voluntary arrangement (CVA) proposal to sell the club to a newly-formed company, Leeds United Football Club Ltd.
"Creditors have approved the CVA proposal, which means, subject to Football League and Football Association approval, the business and assets, including players, of the club will transfer to Leeds United Football Club Ltd, the directors of which are Ken Bates, Shaun Harvey and Mark Taylor.
"The CVA proposal was approved by 75.20% of the creditors who voted, by value. It required 75% of the vote.
"The creditors will receive an initial dividend of 1p in the pound, with a substantial additional dividend to follow in the event that the club regains Premiership status within five seasons."
Richard Fleming, joint administrator and KPMG restructuring partner said: "I'm satisfied that in voting to accept this CVA proposal the creditors have approved a solution that allows the club to plan ahead for next season; reduces uncertainty for all those with an interest in Leeds United; provides some return for creditors and avoids liquidation.
"Leeds United Football Club Ltd must now seek approval from the Football League and can begin to rebuild for next season.
"The supervisors can also begin the process of agreeing creditors' claims for dividend purposes."
The club's Football League share, suspended on May 4, could be returned at the League's board meeting on Wednesday in Portugal, meaning the transfer embargo that has frustrated manager Dennis Wise's rebuilding plans since the end of last season would be lifted.
But any unhappy creditors have 28 days to challenge the outcome of the vote with the amount of claimed debt they have been allocated by the administrator potentially a central issue.
A successful challenge leading to an increase in a creditor's voting power could be significant given the closeness of the vote.
The key player could well be the taxman, with HM Revenue and Customs owed about £7m. If the Bates deal offering creditors just a penny for every pound owed goes ahead, the public purse would be short-changed by virtually the whole amount.
Former Leeds chairman Gerald Krasner, an insolvency practitioner, told the creditors' meeting that a legal challenge is likely.
However, he would not personally lead the challenge, which would involve significant legal costs, though would offer his backing if asked.
But Mr Bates last night told the Yorkshire Post: "They are talking about challenging the result in court. Mr Krasner was very careful to say it would not be him, but that other people may choose to do so.
"But on what grounds will they be appealing? You can't go to a court and say 'we don't like it because Bates won'.
"In any case, we will fight it. If they choose to go to the courts, we will issue a counter-writ for damages because they will be damaging Leeds United. They would be preventing the business from trading."
Last night property magnate Simon Morris, who is behind one of five
alternative bids for the club on the table, ruled out any legal challenge to the result.
Mr Bates said: "I have heard Mr Morris has been suggesting he would like to meet me and discuss the way forward. Well, he knows my number."
Mr Morris said: "Yes I will meet Ken Bates. Everyone knows we are solid bidders.
"We would like to talk to him about taking over his business at Leeds."
On Saturday it emerged Mr Morris would offer creditors up to 40p for every pound owed – 20p initially and 20p based on improved team performance.
But with the creditors' meeting concluded, bar the final vote, the offer can't be put at this stage.
It would only come into play if Mr Bates doesn't win on the recount or if there's a successful legal challenge.
Mr Bates said: "Mr Krasner is making a song and dance about having his votes cut down. But
some of the votes we wanted were cut down.
"Around 8.3 million votes were cast against and the Inland Revenue were responsible for 7.1 million of those. That means Krasner managed to get together just over 1 million. What is that saying about empty vessels making the most noise?"
Mr Krasner declined to comment last night.
Mr Bates added: "KPMG have been thoroughly professional throughout and with 75.02 per cent being such a small margin, they decided to have a recount to make sure.
"We are fairly confident. And once that is done, we can get on with other business.
"There are a number of people who have not made bids to the administrator who are simply waiting to invest in the club.
"We will be proceeding with those talks as soon as this is out of the way."
