<font size="3"><font face="Calibri">Whites likely to get debt relief </font></font><font size="3"><font face="Calibri">By Phil Hay THE "amazing amount of debt forgiveness" afforded to struggling football clubs would prevent Leeds United from going out of business should the club turn to administration, a leading insolvency expert today predicted. Mark Hovell, of Manchester-based solicitors George Davies, claimed United could expect to benefit from a unique trend of co-operation from their creditors were the Elland Road club to declare themselves insolvent. </font></font><font size="3"><font face="Calibri">Suggestions that United's financial position will force them to enter administration have persisted since the club's relegation from the Championship was realistically confirmed last Saturday, and former chairman Gerald Krasner – himself an expert in the field of insolvency – insisted this week he was "90 per cent certain" that Leeds would confirm that step in the coming days.United have refused to comment on the claims. The Elland Road club would be required to apply to the High Court for an administration order, leading to the appointment of a firm of administrators charged with addressing the club's accounts. It is understood that the cost to Leeds of employing administrators could stretch to six figures. </font></font><font size="3"><font face="Calibri">United have carried heavy debts since the final years of Peter Ridsdale's reign as chairman at Elland Road, and despite reducing those debts during the takeover completed by the Yorkshire-based consortium led by Krasner three years ago, the club have never reached a position of strong financial health.Leeds still owe money to a group of bondholders, who loaned around £60million to the club during Ridsdale's tenure and who renegotiated an agreement that would see a percentage of the money repaid in instalments on United's return to the Premiership. </font></font><font size="3"><font face="Calibri">Money injected in United since Bates' takeover, which was completed through the Swiss-based Forward Sports Fund, may also need to be repaid, along with any liabilities built up through the day-to-day running of the club, and Leeds' most recent accounts suggested their total debts stood at more than £20million.United have already sold Elland Road and their Thorp Arch training ground to cover previous cash shortfalls – deals agreed during Krasner's time in charge – and the club's playing squad is short of valuable assets with a large percentage of players out of contract this summer. </font></font><font size="3"><font face="Calibri">But Hovell, who has dealt with more than 50 professional clubs with financial concerns, said: "There's an amazing amount of debt forgiveness when it comes to football clubs."It's like no other area of business. If we were talking about companies who were making cardboard boxes then you'd find that creditors would be fairly ruthless and would show very little sympathy. But they're far more willing to work with football clubs and find ways to reach a solution. </font></font><font size="3"><font face="Calibri">"It's not an uncommon problem, and we've spoken to 50 of the 92 league clubs since the turn of the century.We haven't lost one yet."But it's that sort of industry – clubs chasing the dream, as people have said before about Leeds United."Were United to seek an administration order, the timing of the application would be crucial under Football League rules. Clubs who enter administration are automatically punished with a 10-point deduction by the Football League, a measure which was introduced to deter clubs from gambling financially and to prevent administration from becoming a convenient way of settling large and historic debts. </font></font> <font face="Calibri" size="3"></font></p><font size="3"><font face="Calibri">Rotherham United incurred a 10-point penalty after entering administration shortly after the end of last season, and the Millmoor club started this term in League One with a negative points tally. They were subsequently relegated.Leeds' relegation from the Championship is expected to be confirmed at Derby County on Sunday, but the penalty would be applied to this season's Championship table provided the club entered administration before the end of their final game of the season. Were the order to be issued after Sunday's match, Leeds would begin next season 10 points adrift of the rest of League One. </font></font><font size="3"><font face="Calibri">Should United declare themselves insolvent, financial control of the club will pass immediately to the administrators appointed by the High Court to handle their accounts. Bates and his directors would work alongside the administrators while the club's finances are urgently assessed.Hovell said: "It's not guaranteed that administration will clear all your debts, but it does allow you to write off big chunks of it. It's all about doing a deal with your creditors and agreeing a rate at which to settle your debts. But there have been occasions when we've agreed deals that have paid zero pence in the pound, simply because there was no possibility of the creditors receiving money regardless of whether the business in question continued to operate. </font></font> <font face="Calibri" size="3">"With football clubs the situation is often simple – if a club goes into liquidation, the creditors risk receiving nothing. If they agree to allow a club to carry on running with certain assets, and to carry on playing football, there's a chance they could get more of their money back."It all comes down to what you want to happen. There aren't many people who would actually want a club to go out of business, and few creditors would actually gain any money out of that."But the fact is that recovering from administration can be slow and difficult, as Bradford have found out. Now that the 10-point penalty applies, it is a last resort."</font></p> <font face="Calibri" size="3"></font></p>
So it you see a soilcitor on Sunday at approx 12.55pm... .... driving towards a court with an admin order in his hand do the right thing !!!!</p> SHOOT HIS feckING TYRES OUT !!!!!</p>
RE: So it you see a soilcitor on Sunday at approx 12.55pm... It's a Bank Holiday weekend so let's hope the courts are shut
RE: So it you see a soilcitor on Sunday at approx 12.55pm... Before you say it, yes I know yours was tongue in cheek, didn't realise how serious my post read til I just read it back. I will get my rifle!!!!!
How much (if any) of our debts were written off during administration? I thought the club will have to pay it all back over time?
unfortunately no a number of small businesses locally were harshly treated -some receiving nothing from the CVA</p> the former owners should be ashamed</p>
from original article <font face="Calibri" size="3">But there have been occasions when we've agreed deals that have paid zero pence in the pound, simply because there was no possibility of the creditors receiving money </font>
RE: Hmmmm, interesting. A lot of smaller local businesses who had dealings with BFC 1887 vintage got nothing. As did the shareholders in the 'old' Football Club. A shameful period in our history.
Shareholders got nowt, local businesses got nowt.... And the club ended up several million pounds worse off after administration.</p> Somebody (sterling? who else?) must have ended up better off at these peoples expense. There's a story to be told apparently. </p> It's all fun.</p>
During the period of administration there will be restrictions on the clubs spending. It could mean they are not allowed to bring any new players in and the administrators could accept reasonable offers for their better players. They are still in a mess even if the 10pts does come off this season.
