Richard Fleming, Mark Firmin and Howard Smith, of KPMG Restructuring, were today appointed administrators of Leeds United Association Football Club Limited at the request of the Club's directors.
Shortly after their appointment the joint administrators agreed to sell the business and its assets to a newly formed company called Leeds United Football Club Limited, the directors of which are Ken Bates, Shaun Harvey and Mark Taylor.
The sale of the Club is subject to approval by its creditors, via a Company Voluntary Arrangement (CVA). This would see creditors forgoing a significant element of their debt, in order to allow the Club to continue trading under new ownership. The creditors' meeting, to consider the CVA, will be held before the end of May. The Football League will also need to approve the sale.
Richard Fleming, joint administrator and KPMG Restructuring partner said:
"We were asked by the board of directors to advise Leeds United on Monday 30 April 2007. The Club has experienced significant financial difficulty for some years and was burdened with historic debt and wage structures.
"It was necessary for the Club to enter administration as its balance sheet dated 31 March 2007 indicated debts totalling approximately £35 million, with a cash injection of approximately £10 million required to continue trading. Further, Her Majesty's Revenue & Customs (HMRC) recently issued a winding up petition for approximately £5 million. If this debt had not been paid by 25 June 2007, the Club may have been forced into liquidation."
The administrators understand from discussions with the Football League that the administration will result in the immediate deduction of 10 points from the Club's current points total in this years Championship. This means that next season the club will start the campaign in League One with no points deducted.
Richard Fleming concluded: "This agreement has been reached quickly to maximise the possibility of survival of this major football club, to minimise uncertainty for all the Club's stakeholders and supporters and to allow the Club to plan ahead for next season. There is now a big decision for the creditors to make at their forthcoming meeting."
Statement from the Football League head of communications John Nagle
"Following confirmation that Leeds United have obtained an administration order, The Football League can confirm that the club has been deducted ten points from its 2006/07 tally.
"Given the recent reduction in the numbers of clubs resorting to formal insolvency proceedings, it is disappointing that 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."