Take administration now.

[Kitman 2207]

I could look at our position and give up hope, but that's not my nature. Until the final nail is in the coffin I'll always have hope. Did about avoiding relegation and I will about this. I'm just not prepared to give up.

 

That's the spirit! You never know we could see the back of Ashley within a month...

[The Fish 11070]

fine, well then we might as well all just collectively give up and start watching rugby instead

[Phil 6]

What a stupid question.

 

1) The debt is not out of control, so a judge wouldn't sanction it.

2) All creditors would know this was a ploy not to pay so wouldn't agree to any lowered terms.

3) Ashley would have to give up payment control to a 3rd party, which is madness.

4) If players aren't paid, they can walk for free. And you can bet Duff et al would wait it out.

 

 

 

 

+how are running cost 20m a month. A complete myth. player wages are at most 40m per annum.

 

20m every 3 months (roughly).

 

Ok, Let's take the case of just one player Colo.

 

We still owe £5m transfer fee.

We're paying him between 60k and 80k a week depending on which report you believe.

When we sell him we'll have to pay a loyalty bonus which seems to be 10% of yearly wages.

Even if we get a decent price we won't make any money on him.

That's just one case.

 

 

The question is still moot.

 

1) It's not monopoly, Ashley gains nothing from Administration.

2) A judge wouldn't sanction it.

 

 

The main problem with your thinking is you are talking about running costs, while forgetting we'll still have a revenue stream of around 50m.

 

 

Anyone with half a brain can balance the books to 50m.

 

 

Your example of Colo. He'd need to be loaned out (thus no sale/loyalty bonus etc.). There'll be plenty of clubs willing to take him on as most will recognise he's been playing in a shite team. Loaning the player out with a fixed fee of 11m sale or return.

[Matt 0]

I dont see how this bit works, Im not doubting you but I just dont understand it.

 

Working from what we've been led to believe, Ashley bought the club for £130m and then loaned it £100m giving him a total outlay of £230m yes? Now he says hes selling for £100m and we're being led to believe the debt is scratched off (I've personally never read anything official that states this though). In my view that means whatever money is owed to St James' Holdings on the day of the sale is lost to them (Ashley). Now as far as he is concerned that money could be £100m or it could be £20m either way the new owners will owe him zero and he will still have met the original deal ie £100m for the club and no money owed to Ashley.

 

Its down to the potential buyers to realise that the debts are mounting up I would imagine, how far due diligence goes Im not sure.

 

To use an earlier analogy of the advertised car and petrol, in the advert hes saying that it comes with whatever petrol is in it at the time of purchase. Ashley is just going to make sure he goes for a very very long drive before dropping it off.

 

If Ashley has paid himself back the loan with bank debts, then bidders will spot that within the first 5 minutes of looking at the documents. Provided these bidders know what they are doing then it should be common sense.

 

Don't read too much into any 'orginal deal'. Ashley is unlikely to walk away with £100m. If he has indeed paid himself some of that back, then his asking price simply becomes more unrealistic and any bid should be adjusted accordingly. The business will be bought on the basis of enterprise value, which is the value of the equity in the business plus the value of the debt. So whatever he shifts from the debt will simply reduce the amount he receives for his equity.

 

 

 

It could be that Im totally off the mark here and all debts are being paid on time to whoever but it doesnt look that way when you see the BMW fiasco. We dont just go into Administration / Bankruptcy (whats the difference? I honestly dont know???) when Ashley decides we do. If hes not paying bills then a/n other creditor can file for it cant they? What if that creditor is HMRC? A hell of a lot of money can be owed to them in a short period of time at a football club. If the projections of £72m annual wage bill is correct then thats half a million per week in Tax and NI payments. Considering HMRC gets paid monthly then £2m unpaid before anyone even has a chance to notice. Im assuming (its not my area, maybe Mancy would know) that HMRC maybe goes a full quarter of missed payments before starting proceedings? thats 6 maybe 7m owed before they kick off properly.

 

HMRC are at the heart of most football club court orders- happens every couple of weeks in non-league. We're at our 'trough' in terms of cash so I suspect once the season ticket money comes in, that immediate pressure will ease and we'll probably scrape through, but only for a few months before we start running short again.

[Park Life 71]

Could it be that every single penny that would have gone to pay other bills has instead gone to paying off the debt to SJ Holdings?

If so, just how much of that £100m is still outstanding?

How much of it went in that mortgage we found back in November?

What about the January transfers? is it possible that the likes of Given were now owned by say SJ Holdings and therefore any payment is due to them and not NUFC?

 

I havent got a clue on the answers above but the potential for these and a lot more worry me shitless.

 

 

Whatever way you slice and dice it, the net sale price to Ashley should be the same. If he repaid part of his loan ahead of others, then the sale price will go down to reflect that.

 

I still find it hard to believe anyone is seriously considering offering £100m for the club when they just have to sit back, watch the shit hit the fan and stand ready by the phone with their cash still in their pocket. From the sounds of it we're struggling to settle even routine payments.

 

Administration does little solve the problem with players- as football creditors the league insists payments are honoured in full. Everything depends on the realism of Ashley's asking price.

 

I dont see how this bit works, Im not doubting you but I just dont understand it.

 

Working from what we've been led to believe, Ashley bought the club for £130m and then loaned it £100m giving him a total outlay of £230m yes? Now he says hes selling for £100m and we're being led to believe the debt is scratched off (I've personally never read anything official that states this though). In my view that means whatever money is owed to St James' Holdings on the day of the sale is lost to them (Ashley). Now as far as he is concerned that money could be £100m or it could be £20m either way the new owners will owe him zero and he will still have met the original deal ie £100m for the club and no money owed to Ashley.

 

Its down to the potential buyers to realise that the debts are mounting up I would imagine, how far due diligence goes Im not sure.

 

To use an earlier analogy of the advertised car and petrol, in the advert hes saying that it comes with whatever petrol is in it at the time of purchase. Ashley is just going to make sure he goes for a very very long drive before dropping it off.

 

It could be that Im totally off the mark here and all debts are being paid on time to whoever but it doesnt look that way when you see the BMW fiasco. We dont just go into Administration / Bankruptcy (whats the difference? I honestly dont know???) when Ashley decides we do. If hes not paying bills then a/n other creditor can file for it cant they? What if that creditor is HMRC? A hell of a lot of money can be owed to them in a short period of time at a football club. If the projections of £72m annual wage bill is correct then thats half a million per week in Tax and NI payments. Considering HMRC gets paid monthly then £2m unpaid before anyone even has a chance to notice. Im assuming (its not my area, maybe Mancy would know) that HMRC maybe goes a full quarter of missed payments before starting proceedings? thats 6 maybe 7m owed before they kick off properly.

 

Take a looky here > http://news.bbc.co.uk/1/hi/uk/7741859.stm from November last year, now if Leicester can run up £7m debt to the taxman, Ipswich £5m and Luton £2.5m on their wage bill then what the fuck could we be owing?

 

According to stuff Ive been reading Lutons debt to the taxman was on a wage bill of £4m! Using that logic then we could rack up about 40m debt to the taxman before he kicks off big time.

 

 

The intricate going on at Leeds and the weird areas monies was owed.....

 

 

 

 

Leeds United: Where the money is owed

 

By Phil Hay

Exclusive

 

 

THE Company Voluntary Arrangement put forward to Leeds United's creditors by Ken Bates is a transparent depiction of the intricate business that professional football has become.

From the debt of £12,839,309 owed to Astor Investment Holdings Limited to a three-pound payment due to a property firm in Ferrybridge who have entered into liquidation, the CVA document constructed by Bates explains every penny which forced United into the hands of administrators KPMG a fortnight ago.

 

The list of creditors is long and varied, encompassing a wide spectrum of business and society.

 

Alongside the names of solicitors, accountants and local authorities are those of delicatessens, locksmiths, travel agents.

 

Even a mobile disco is listed. A total of around 1,350 creditors are involved.

 

Most, if not all, have spent the latter half of this week contemplating the implications of a deal which offers them next to nothing.

 

The terms of the CVA drawn up in the name of Leeds United Football Club Limited, the company and vehicle through which Bates intends to buy back United from KPMG, confirms that the club's hundreds of unsecured creditors will receive a penny for every pound they are owed if his proposal is approved at a meeting on June 1.

 

Preferential creditors can expect to be reimbursed in full, but their number will be vastly outweighed by the hundreds of businesses and individuals who have been asked to forego 99 per cent of the money they are owed.

 

The unsecured creditors are preparing to become the collateral damage of United's historic debts and chronic overspending.

 

The deal put forward would instantly cut Leeds' liabilities of £35m to something approaching a six-figure sum.

 

Gerald Krasner, the former Leeds chairman and insolvency practitioner who described Bates' offer as "utterly derisory" yesterday, suggested Leeds United Football Club Limited were in line to re-purchase the club for as little as £500,000, including the professional fees incurred by administration.

 

In the space of seven days after the High Court issued an administration order on May 4, KPMG's charges totalled £95,038, the result of 340 hours work at an average hourly rate of £279.

 

The benefits of administration can be numerous but the service does not come cheap.

 

The basic figures thrown to KPMG by Leeds, showing total debts of £35m and net liabilities of just under £23m, were the tip of the iceberg of cash owing from Elland Road.

 

Beyond the massive sums of money due to Astor Investment Holdings Limited, Forward Sports Fund and Krato Trust – United's biggest creditors – rates due to Leeds City Council are tallied at £838,494, and more than £630,000 is due to seven former players, one of whom – Danny Mills – left Leeds in 2004.

 

Mills is owed £216,667 by United, and the enigmatic Michael Ricketts, who made only 29 appearances for the club, is still waiting for a settlement of £117,500.

 

The combined bill due to Paul Butler, Sean Gregan, Steve Stone, Eirik Bakke and Jermaine Wright is £297,429.

 

Bakke alone is set to receive £76,000. Barring any fresh agreement, Football League rules will ensure their debts are paid in full.

 

The liabilities extend not only to ex-players but to other clubs and footballing organisations.

 

Swindon Town have a bill of £100,000 outstanding, a debt which is likely to be linked to the acquisition of United's management team, Dennis Wise and Gus Poyet, from the County Ground in October of last year.

 

Barnet are due £150,000, presumably as a result of the deal which brought striker Tresor Kandol to Elland Road last year.

 

Further money totalling £596,921 is owed to Blackburn Rovers, Sheffield United, Brondby IF, Coventry City, Bolton Wanderers, Wolves, Reading, Celtic, Middlesbrough and Charlton, a list which mirrors the string of loan signings made by Leeds last season.

 

Numerous agents are also listed among the creditors, along with the Football Association and the Football League.

 

The effects of administration will be far-reaching among football's economy, and that of the area surrounding Leeds.

 

The CVA's list of creditors is a roll of every conceivable industry and service, connected in some way to the business of football.

 

The catalyst behind United's move into administration was a £5m bill called in by the Inland Revenue, though despite securing a winding-up order and as a result of the Enterprise Act, the taxman is no longer classed as a preferential creditor and is technically no more likely to secure their funds on June 1 than the average businessman in KPMG's list.

 

Bates, however, requires 75 per cent of creditors to approve his proposal, and the Inland Revenue may have a key role to play in next month's ballot.

 

According to the CVA, United are assured of receiving "unqualified support" from Astor Investment Holdings Limited, Forward Sports Fund (FSF) and Krato Trust, whose combined debt is stated as being in the region of £18m.

 

FSF hold the shares in Bates' new company, Leeds United Football Club Limited, while Astor have waived their right to claim as a secured creditor having been issued with a debenture in their favour by Leeds on April 4.

 

But were any of the three to be classed by law as connected creditors – with proven links to United or any of their directors – Bates would require permission from more than 50 per cent of the club's unconnected creditors to force his CVA through.

 

The quiet threat in the background of the dealings between Bates, KPMG and the rival parties who are showing an interest in owning Leeds is the winding-up petition served by the Inland Revenue on Leeds shortly before midday on Tuesday, April 17.

 

The petition was issued by the High Court of Justice in Bristol and will be heard on June 27 if KPMG fail to push through a successful takeover bid before that date.

 

A paragraph in the CVA document revealed that United had been paying £200,000 a month to Her Majesty's Revenues and Customs (HMRC) as the result of historic debts built up over a period of years, and the failure to meet those instalments in March and April – breaching a 'time to pay' agreement with HMRC – prompted the Inland Revenue to pursue a winding-up petition.

 

Ironically, the information drawn up by KPMG also shows that Leeds posted a net profit of over £1m in the nine months leading up to March 31, 2007, although the club sustained an operating loss and strengthened their accounts with the sales of Rob Hulse and Matthew Kilgallon to Sheffield United.

 

KPMG have also confirmed that the settlement with Chelsea over the transfer of two youth team players, Michael Woods and Tom Taiwo, to Stamford Bridge was worth in the region of £4m.

 

When the loans made to Leeds by Astor Investment Holdings Limited between June and October of last year are considered, totalling more than £4.2million, the degree to which money was slipping out of Elland Road is glaringly apparent.

 

The pressure on Leeds is increased by the fact that the club have few serious assets to speak of.

 

Elland Road and Thorp Arch training ground remain in the hands of British Virgin Islands-based firm Teak Commercial Limited, and KPMG estimate that, in a 'forced sale scenario', the club's squad would bring in a sum of £3.2m.

 

The Football League would insist that the proceeds from player sales are used to settle football debts, rather than those of unsecured creditors.

 

Under English rules, all football debts must be settled in full before United's membership of the Football League and Football Association is transferred to a new company.

 

Among those protected by the CVA are the 184 supporters who purchased 20-year season tickets during Krasner's reign as chairman in 2004.

 

The investments will be honoured should Bates retain control of United, and other buyers would also be unlikely to bring on a public relations disaster by declaring the tickets void.

 

The details of United's finances, and the inescapable web they have produced, explain exactly why KPMG were called into Elland Road two weeks ago.

 

The trap that Leeds walked their way into, over a number of years, was beyond the financial nous of Bates, and beyond the interest of any sensible investors.

 

Throwing money at an insolvent club was a pointless task while the debts remained as high as they are.

 

In the days leading up to June 1, the club's creditors will take the time to consider their position and decide whether Bates' proposal is good enough to support.

 

Krasner says not, and the presence of confirmed and rumoured bidders hovering about Elland Road may persuade others to agree.

 

The magic number is 75, and Bates will visualise that percentage between now and June 1 as he fights to reach his ideal scenario of a debt-free club.

 

It is a footballing dream for chairman across the world, but the insolvency of Leeds United AFC Limited will leave financial carnage in its wake, whoever takes the reigns.

[Park Life 71]

Food for thought, if Leicester hadn't taken the total piss when filing and not paid the people who built their stadium no laws would have been passed stopping us not paying the players (cunts).

[The Fish 11070]

I don't get it. This proves that Leeds were up shit creek and needed to go into administration. We don't know if the debts that NUFC have are as all-encompassing as this. We're not Leeds.

[Park Life 71]

I don't get it. This proves that Leeds were up shit creek and needed to go into administration. We don't know if the debts that NUFC have are as all-encompassing as this. We're not Leeds.

 

It's just to give an idea of all the myriad of places we could be owing money that us muppets haven't considered. Puds point about the tax man is very germane as the football league have very recently passed legislation that the tax man has to be paid before a club can engage in player transfers.

[Phil 6]

Totally agree there'll be money owed in weird places and for surprising amounts.

 

But Leeds were in league two and faced bankruptcy before their creditors agreed to the CVA. Ashley is our main creditor, so I doubt there's a judge in the land (if there not already legislation in place) that would sanction it.

[The Fish 11070]

Fair enough, but I won't lurch from one imagnied catastrophe to another just to while away time. It seems fruitless to fret to such a degree. As fans we're mostly powerless at the moment. We've made our feelings clear and after that there's little else to do other than organise ourselves (as NUSC are doing) and support the club.

 

Launching into conjecture about the possible failings serves as nothing but a way of entertaining unnecessary stress.

 

I'm not saying to choose blindness and blithely skip along as the world crumbles, but to tie ourselves in knots worrying about things that will never be made transparent to us seems... masochistic.

[Park Life 71]

Totally agree there'll be money owed in weird places and for surprising amounts.

 

But Leeds were in league two and faced bankruptcy before their creditors agreed to the CVA. Ashley is our main creditor, so I doubt there's a judge in the land (if there not already legislation in place) that would sanction it.

 

You mean they'll just say MA has to pay up?

[Park Life 71]

Fair enough, but I won't lurch from one imagnied catastrophe to another just to while away time. It seems fruitless to fret to such a degree. As fans we're mostly powerless at the moment. We've made our feelings clear and after that there's little else to do other than organise ourselves (as NUSC are doing) and support the club.

 

Launching into conjecture about the possible failings serves as nothing but a way of entertaining unnecessary stress.

 

I'm not saying to choose blindness and blithely skip along as the world crumbles, but to tie ourselves in knots worrying about things that will never be made transparent to us seems... masochistic.

 

It helps me relax.

[The Fish 11070]

Take up knitting?

[trophyshy 7095]

I've seen the future, I can't afford it.

[Fop 1]

Totally agree there'll be money owed in weird places and for surprising amounts.

 

But Leeds were in league two and faced bankruptcy before their creditors agreed to the CVA. Ashley is our main creditor, so I doubt there's a judge in the land (if there not already legislation in place) that would sanction it.

 

You mean they'll just say MA has to pay up?

 

It's not always so straight forward, again in the Darlington FC case the main creditor was the Chairman/Owner who still owned the land (and would have even if the club itself had been liquidated), in the end he bought it (the club) back but with some debts wiped off IFRC.

 

Which is what is worrying, it's not always a case of "forced" into administration, it can be a viable business strategy in certain circumstances.

[Park Life 71]

Totally agree there'll be money owed in weird places and for surprising amounts.

 

But Leeds were in league two and faced bankruptcy before their creditors agreed to the CVA. Ashley is our main creditor, so I doubt there's a judge in the land (if there not already legislation in place) that would sanction it.

 

You mean they'll just say MA has to pay up?

 

It's not always so straight forward, again in the Darlington FC case the main creditor was the Chairman/Owner who still owned the land (and would have even if the club itself had been liquidated), in the end he bought it (the club) back but with some debts wiped off IFRC.

 

Which is what is worrying, it's not always a case of "forced" into administration, it can be a viable business strategy in certain circumstances.

 

Vis a vie Bates at Leeds and the tricks of Leicester City.

[Fop 1]

Totally agree there'll be money owed in weird places and for surprising amounts.

 

But Leeds were in league two and faced bankruptcy before their creditors agreed to the CVA. Ashley is our main creditor, so I doubt there's a judge in the land (if there not already legislation in place) that would sanction it.

 

You mean they'll just say MA has to pay up?

 

It's not always so straight forward, again in the Darlington FC case the main creditor was the Chairman/Owner who still owned the land (and would have even if the club itself had been liquidated), in the end he bought it (the club) back but with some debts wiped off IFRC.

 

Which is what is worrying, it's not always a case of "forced" into administration, it can be a viable business strategy in certain circumstances.

 

Vis a vie Bates at Leeds and the tricks of Leicester City.

 

 

Assley sells the club to "INMAH plc" (It's not Mike Ashley honest) and which then instantly goes bankrupt leaving a lot of innocent Nigerians penniless after they'd been convinced by a smirking bespectacled Englishman who'd been trawling the country for the past 4 weeks, and referring to everyone as "punter", to buy a stake in a Premiership football club and double their money.

[Phil 6]

Arrggghhhhh...... it's not an option...!!!!!

 

 

Can the people who think Administration is a viable option please list our debt. Not forecast debt, Actual debt.

[The Fish 11070]

Now Phil, is that as fun as having a needless panicy headlong rush towards a wall?

[Park Life 71]

Arrggghhhhh...... it's not an option...!!!!!

 

 

Can the people who think Administration is a viable option please list our debt. Not forecast debt, Actual debt.

 

240m

[Tom 14021]

Proof?

[Park Life 71]

Proof?

 

Puff.

[The Fish 11070]

Proof?

 

Puff.

 

 

 

Who needs facts when you've got wild and baseless accusations?!

[Park Life 71]

Proof?

 

Puff.

 

 

 

Who needs facts when you've got wild and baseless accusations?!

[The Fish 11070]

Wouldn't you be a happier soul if you didn't spend your time looking for monsters in the closet?