Creditors to let Leeds bankrupt if Bates is not in power

English Leeds United creditors' meeting ordered a recount after 75.02 percent of the creditors voted on Friday to accept the 1p-in-the-pound offer placed by Ken Bates. The recount meeting is scheduled for today (Monday).

A spokeswoman for KPMG, the company overseeing the bid vote, said: "The creditors' meeting has been adjourned without a decision being reached. KPMG wish to recount the votes and the meeting will resume on June 4 at 10am when the final results will be provided."

But, according to the Telegraph newspaper, the recount is unlikely to alter the eventual outcome, leaving Bates and his financial backers free to start rebuilding the club with only a fraction of the debts they had just one month ago.

The club's largest creditor, Astor Investment Holdings, said it wants to support Ken Bates' effort to keep control of the club, and it will allow the club to go bankrupt if Bates is not in power.

Astor Investment Holdings, an offshore company, has a GBP 13 million debt marker from Leeds. Rumours, that have never been proved and are denied by Bates, have said Bates controls Astor. Leeds director Mark Taylor said Astor's owners have been disclosed to KPMG which said that it believed there was no connection to Astor and Bates other than a creditor-debtor relationship.

Other major creditors are the Inland Revenue, who are owed GBP 6 million, the Swiss-based Forward Sport Fund owed a GBP 2.4 million, and Krato Trust, a company registered in the Caribbean, owed GBP 2.5 million.

Astor, Forward Sport and Krato said they would give up rights to part or all of any payout to creditors, while other organisations owed money would receive Bates's bid, measly 1p-in-the-pound.

As Astor Holdings is owed the most by Leeds, it has 45 percent of the say in the club's future. A 75-percent margin is needed to approve any of the bidders, meaning the offshore company could block any bid.

KPMG issued a letter on Astor's behalf, telling creditors that the offshore company will hold out against any offers other than Bates. The letter also states that if the Bates bid is not approved, Astor will allow the club to go into liquidation.

This ploy comes despite a bid from former Leeds director Simon Morris, who has offered creditors on Saturday 40p-in-the-pound to win their support in the battle to takeover the club.

"I think the reason for that is that they [creditors] are prepared to back the current management, that is Ken Bates and Shaun Harvey," said Taylor. "Astor always went into it on the basis that they would back Ken."

Morris has already tabled GBP 10 million to buy Leeds out of administration, topped up with a cash injection of GBP 25 million to stabilise the club’s finances. Morris has also a GBP 400 million redevelopment plan for Elland Road that will regenerate a key area of the city.

Simon Morris said: “We believe creditors will see and understand the value in our offer. “If we are successful in our bid to buy Leeds United, there will be 20p-in-the-pound for the creditors immediately and a further 20p-in-the-pound for them over a period of time.”

Source: euFootball.BIZ © Copyright 2006 - All rights reserved.