Leedsunited.com 28/6/07
STATEMENT
A statement from chief executive Shaun Harvey in relation to the club's current views about the future and the effect any appeal may have.
The 28 day period provided by statute during which objections to the creditors voluntary arrangement proposed in respect of Leeds United Association Football Club Limited can be considered expires next Tuesday July 3.
The Proposal of a payment of one penny in the pound together with a further payment to Creditor of £5.0m in the event that Leeds United 2007 Limited becomes a member of the FA Premier League within the next five football seasons was approved by over 75% of the Creditors of the Company at the Creditors Meeting held on the 1st June 2007 and reconvened on the 4th June 2007.
In the event of promotion the unsecured Creditors, excluding those who would not be entitled to receive a dividend payment or who have waived their rights, would receive a further payment of approximately thirty pence in the pound.
This would compare very favourably with the payments made by the other 45 football clubs that have been through the Administration Process, all of which have had to complete a Creditors Voluntary Arrangement to enable them to transfer their share in the Football League Limited and the Football Association Limited. No club has had their transfer authorised on the basis of "exceptional circumstances".
We are now a few days away from the end of the appeal period and all Creditors have had a considerable period of time to consider their position regarding an appeal on procedural grounds. We believe that this is the only legitimate basis on which an objection could be made. Just being unhappy with the proposals that were accepted by Creditors is no basis for an appeal. An appeal based on such view must be seen as obstructive and vexatious to Leeds United going forward. The proposal put forward is the best way to allow the Football Club to progress and to allow it to resume its proper place in the FA Premier League. The achievement of such objective would benefit not only the Club and its legendary supporters but also the Creditors of the Company due to the additional payment that would be forthcoming.
Promotion to the FA Premier League would see approximately £2.3m being paid to HMRC which would go a considerable way towards paying for a new primary school in Leeds that the Rt. Hon Colin Burgon has demanded. With its place in the Premier League assured the Club believes that it would be able to raise the balance of just over £1.5m required to build the school through its charitable works. The resurrection of the Club would therefore appear to be not only in the interests of the Club and its supporters but in the interest of Leeds generally.
The Club has been advised that a procedural appeal would not succeed. Such an appeal at this late stage would however have the affect of hindering the acquisition of a playing squad required to obtain promotion to the Championship at the first attempt. It would also however threaten the very survival of the Football Club. The Club has been advised that an appeal would be likely to take two or three months during which period, if the Company was to survive, the joint administrators would have to run the Club. To enable the Club to play in the Football League next season the Football League would require an assurance that the Club could meet its playing commitments throughout the season. Without the stability of a firm bid for the Club the Administrator could not give such a commitment.
The decision of the Joint Administrators to sell the business to Leeds United 2007 Limited was taken as the only viable option available to them that provided both funding and the ability to propose a Creditors Voluntary Arrangement that was likely to be approved by Creditors. We believe that the proposal is in the best interests of the Club, its supporters and its Creditors. This week Yorkshire has already lost one football club (Scarborough). We appreciate the loss and distress that this failure must cause for their supporters. Consider however how much worse the loss would be if a club like Leeds United cease to exist with the loss of up to 500 jobs undertaken by local people (not footballers). One can normally count upon the support of local MP's to save such an historic club, unfortunately three elected members of Parliament seem to be doing their best to scupper the club's survival.
No one unsecured Creditor made the difference to have the proposal put forward by the CVA approved. It was the aggregate vote of all the Creditors that achieved this result. The Administrators acted in a fair and reasoned way in accepting proof of debts and should be congratulated for their even-handedness. Today the quantum and eligibility of votes cast in favour of the proposal of Mark Taylor & Company and by Yorkshire Radio Limited have been questioned. Both voted for a greater sum than originally declared by the Joint Administrators. Those increased sums are wholly justified by the Administrators on the advice of Counsel. However no issue has been raised in respect of the debts of Holroyd Construction and APT Skidata who voted against the proposal, whose proofs of debt were approved in the same manner.
The various parties that expressed an interest in owning the club after it first went into Administration did of course have exactly the same opportunity prior to its Administration, but no one came forward. An investment prior to Administration could have prevented the requirement for the Administration Procedure but no investment was forthcoming. It would appear that many of the interested parties were only interested in buying the club "on the cheap" and their failure to do so has now aggrieved them. Since 2005 investors in the club have lost nearly £25m, money that has been invested to keep the club alive. Whilst that investment was ongoing, no one raised any objection. If at the end of the 2005/2006 season the club had achieved promotion to the Premier League then Mr Willis and his cronies would have presumably raised no question. Without the investment the club would have been out of business a very long time ago. It was only the investment of that £25m that prevented Mr Krasner from over-seeing the demise of Leeds United Football Club.
Since 2005 the Company has made significant payments to HMRC, if they had not then the loss to HMRC would have been considerably more than the £7.7m currently claimed. During the clubs discussions with the Revenue and following the Revenue's refusal to allow the club any more time to pay their losses the Revenue stated "I appreciate this will be disappointing news for the club particularly in view of the efforts that have been made in the past to try and contain the indebtedness to HMRC". We consider that this is an acknowledgement that the club could have done little more.
In conclusion our aim is the long term survival of Leeds United Football Club playing football at a level which it deserves. Any challenge at this late stage must be considered vexatious and can only arise from a clash of personalities that should be put aside in the best interests of the club going forward.
STATEMENT
A statement from chief executive Shaun Harvey in relation to the club's current views about the future and the effect any appeal may have.
The 28 day period provided by statute during which objections to the creditors voluntary arrangement proposed in respect of Leeds United Association Football Club Limited can be considered expires next Tuesday July 3.
The Proposal of a payment of one penny in the pound together with a further payment to Creditor of £5.0m in the event that Leeds United 2007 Limited becomes a member of the FA Premier League within the next five football seasons was approved by over 75% of the Creditors of the Company at the Creditors Meeting held on the 1st June 2007 and reconvened on the 4th June 2007.
In the event of promotion the unsecured Creditors, excluding those who would not be entitled to receive a dividend payment or who have waived their rights, would receive a further payment of approximately thirty pence in the pound.
This would compare very favourably with the payments made by the other 45 football clubs that have been through the Administration Process, all of which have had to complete a Creditors Voluntary Arrangement to enable them to transfer their share in the Football League Limited and the Football Association Limited. No club has had their transfer authorised on the basis of "exceptional circumstances".
We are now a few days away from the end of the appeal period and all Creditors have had a considerable period of time to consider their position regarding an appeal on procedural grounds. We believe that this is the only legitimate basis on which an objection could be made. Just being unhappy with the proposals that were accepted by Creditors is no basis for an appeal. An appeal based on such view must be seen as obstructive and vexatious to Leeds United going forward. The proposal put forward is the best way to allow the Football Club to progress and to allow it to resume its proper place in the FA Premier League. The achievement of such objective would benefit not only the Club and its legendary supporters but also the Creditors of the Company due to the additional payment that would be forthcoming.
Promotion to the FA Premier League would see approximately £2.3m being paid to HMRC which would go a considerable way towards paying for a new primary school in Leeds that the Rt. Hon Colin Burgon has demanded. With its place in the Premier League assured the Club believes that it would be able to raise the balance of just over £1.5m required to build the school through its charitable works. The resurrection of the Club would therefore appear to be not only in the interests of the Club and its supporters but in the interest of Leeds generally.
The Club has been advised that a procedural appeal would not succeed. Such an appeal at this late stage would however have the affect of hindering the acquisition of a playing squad required to obtain promotion to the Championship at the first attempt. It would also however threaten the very survival of the Football Club. The Club has been advised that an appeal would be likely to take two or three months during which period, if the Company was to survive, the joint administrators would have to run the Club. To enable the Club to play in the Football League next season the Football League would require an assurance that the Club could meet its playing commitments throughout the season. Without the stability of a firm bid for the Club the Administrator could not give such a commitment.
The decision of the Joint Administrators to sell the business to Leeds United 2007 Limited was taken as the only viable option available to them that provided both funding and the ability to propose a Creditors Voluntary Arrangement that was likely to be approved by Creditors. We believe that the proposal is in the best interests of the Club, its supporters and its Creditors. This week Yorkshire has already lost one football club (Scarborough). We appreciate the loss and distress that this failure must cause for their supporters. Consider however how much worse the loss would be if a club like Leeds United cease to exist with the loss of up to 500 jobs undertaken by local people (not footballers). One can normally count upon the support of local MP's to save such an historic club, unfortunately three elected members of Parliament seem to be doing their best to scupper the club's survival.
No one unsecured Creditor made the difference to have the proposal put forward by the CVA approved. It was the aggregate vote of all the Creditors that achieved this result. The Administrators acted in a fair and reasoned way in accepting proof of debts and should be congratulated for their even-handedness. Today the quantum and eligibility of votes cast in favour of the proposal of Mark Taylor & Company and by Yorkshire Radio Limited have been questioned. Both voted for a greater sum than originally declared by the Joint Administrators. Those increased sums are wholly justified by the Administrators on the advice of Counsel. However no issue has been raised in respect of the debts of Holroyd Construction and APT Skidata who voted against the proposal, whose proofs of debt were approved in the same manner.
The various parties that expressed an interest in owning the club after it first went into Administration did of course have exactly the same opportunity prior to its Administration, but no one came forward. An investment prior to Administration could have prevented the requirement for the Administration Procedure but no investment was forthcoming. It would appear that many of the interested parties were only interested in buying the club "on the cheap" and their failure to do so has now aggrieved them. Since 2005 investors in the club have lost nearly £25m, money that has been invested to keep the club alive. Whilst that investment was ongoing, no one raised any objection. If at the end of the 2005/2006 season the club had achieved promotion to the Premier League then Mr Willis and his cronies would have presumably raised no question. Without the investment the club would have been out of business a very long time ago. It was only the investment of that £25m that prevented Mr Krasner from over-seeing the demise of Leeds United Football Club.
Since 2005 the Company has made significant payments to HMRC, if they had not then the loss to HMRC would have been considerably more than the £7.7m currently claimed. During the clubs discussions with the Revenue and following the Revenue's refusal to allow the club any more time to pay their losses the Revenue stated "I appreciate this will be disappointing news for the club particularly in view of the efforts that have been made in the past to try and contain the indebtedness to HMRC". We consider that this is an acknowledgement that the club could have done little more.
In conclusion our aim is the long term survival of Leeds United Football Club playing football at a level which it deserves. Any challenge at this late stage must be considered vexatious and can only arise from a clash of personalities that should be put aside in the best interests of the club going forward.