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Leeds United sends into administration
England - 08 May, 2007
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English Leeds United was exiled to the third division after placing itself in administration with debts of GBP 35 million.
A ten-point penalty was imposed upon the club, which confirms their relegation from the Coca-Cola Championship to League One for next season.
The points penalty officially takes Leeds down, but they will begin next season with a clean slate.
Almost immediately after administrators KPMG were appointed, Leeds was sold to a newly-formed company called Leeds United Football Club Limited, with Ken Bates, Shaun Harvey and Mark Taylor as its directors.
The sale of the club is subject to approval by its creditors, who will meet before the end of the month to consider a Company Voluntary Agreement, whereby they would forgo some of their debt. The Football League also needs to approve the sale.
A statement from KPMG said "a cash injection of approximately GBP 10 million (was) required to continue trading."
Customs recently issued a winding-up petition for approximately GBP 5 million. If that debt was not paid by June 25, the club could have been forced into liquidation.
Richard Fleming, a KPMG restructuring partner, said the club "was burdened with historic debt and wage structures."
"Given the recent reduction in the numbers of clubs resorting to insolvency proceedings," John Nagle, the head of communications for the Football League, posted on the organisation's official website, "it is disappointing Leeds United have had to seek the protection of an administration order.
"Discussions have already begun aimed at establishing how Leeds United intend exiting administration. This will have to include complying with the League's insolvency policy under which all 'football debts' must be settled in full."
A ten-point penalty was imposed upon the club, which confirms their relegation from the Coca-Cola Championship to League One for next season.
The points penalty officially takes Leeds down, but they will begin next season with a clean slate.
Almost immediately after administrators KPMG were appointed, Leeds was sold to a newly-formed company called Leeds United Football Club Limited, with Ken Bates, Shaun Harvey and Mark Taylor as its directors.
The sale of the club is subject to approval by its creditors, who will meet before the end of the month to consider a Company Voluntary Agreement, whereby they would forgo some of their debt. The Football League also needs to approve the sale.
A statement from KPMG said "a cash injection of approximately GBP 10 million (was) required to continue trading."
Customs recently issued a winding-up petition for approximately GBP 5 million. If that debt was not paid by June 25, the club could have been forced into liquidation.
Richard Fleming, a KPMG restructuring partner, said the club "was burdened with historic debt and wage structures."
"Given the recent reduction in the numbers of clubs resorting to insolvency proceedings," John Nagle, the head of communications for the Football League, posted on the organisation's official website, "it is disappointing Leeds United have had to seek the protection of an administration order.
"Discussions have already begun aimed at establishing how Leeds United intend exiting administration. This will have to include complying with the League's insolvency policy under which all 'football debts' must be settled in full."
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