Revenue and Customs believes Bates violated Insolvency laws

The continuing woes of English Leeds United might have just grown a bit.

Revenue & Customs now believes chairman Ken Bates and Mark Taylor, his solicitor, have violated insolvency laws by positioning themselves as directors of a newly formed company to buy out Leeds.

Bates and Taylor are directors of Leeds United Football Club Limited. This came about after Bates placed the club into administration, bought it back with a 1p per GBP offer with the backing of the club's biggest creditor, had that challenged by Revenue and Customs, and then offered 8p per GBP owed.

When administrators KPMG put the club back up for sale, Bates' bid – still undisclosed – was declared the best by KPMG.

Now, Revenue and Customs, one of the irate creditors, likely will make a legal challenge that Bates and Taylor were not permitted to be directors. The challenge is based because Bates and Taylor were formerly directors of a company called Leeds United Football Club Limited. That went into liquidation in June 2006.

Bylaw s216 of the Insolvency Act 1986 states that someone who has been a director of a company that has gone into liquidation must obtain court permission if they wish, within five years of liquidation, to be the director of a similarly named new company.

Using that name and trading under it without permission is a criminal offence, punishable, if found guilty, by fine or imprisonment.

KPMG, which has had its ability to handle the case brought into question, said it believes an application has been made on behalf of Bates and Taylor. The Insolvency Service, however, said it had yet to get notice of one. The Insolvency Service would be invited to respond to an application.

Neither Taylor nor Bates returned requests for comment.

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