Leeds Go Into Registration

[chutai]

Deducted 10 points and relegated.

ooops. Nearly forgot

Last Updated: Friday, 4 May 2007, 14:39 GMT 15:39 UK

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Leeds Utd calls in administrators

Leeds United is widely expected to be relegated at the weekend

Former Premiership football club Leeds United has called in administrators.

It will mean United are docked 10 league points, but it is not clear if that would happen this season or next.

The news comes just hours after the Leeds United Supporters Trust told the club it was in a position to make a serious proposal to buy the club.

Leeds has been struggling with its finances in recent years and relegation from the Championship will certainly eat into earnings for the coming year.

In recent years the club has sold its Elland Road home ground and its Thorp Arch training ground to cover previous cash shortfalls.

The fact that contracts for a number of high-price players run out this summer also means that the club will run short of valuable assets later this year.

Uncertainty

By entering administration the club can be held together while plans are put in place to restructure or sell it.

Experts predict that by making such a move, the club would be able to get rid of some of its debts.

Leeds would then be a more attractive investment and takeover target because any new owner would not have to take on its entire debt burden.

Under League rules, introduced in 2003, teams are deducted 10 points if they enter administration. Wrexham was the last club to befall such a fate in the 2004/5 season.

By taking the decision to go into administration during the current season, Leeds could have 10 points deducted now while the team is still in the Championship, rather than when it started next season in League One.

Should the penalty be held over, it would mean that the club started next season with a points tally of minus 10, a deduction that could seriously damage its prospects and could leave it in trouble for the rest of the 2007/8 season.

Leeds' chairman Ken Bates has been working hard to attract new investment to the club, but has so far had little success.

As well as the supporter's club, Leeds defender Gary Kelly has also been linked to a possible Irish takeover bid for the club.

Edited May 4, 2007 by chutai

[Pattaya_Fox]

I was listening to a discussion about this yesterday and it seems that because of the goal difference and points Leeds would need in order to stay up it would be far better to go into administration before the end of the season and take the hit of the 10 points now.

It would mean that next season they would start on a level playing field in Division One and hopefully be able to bounce back into the Championship.

[markr]

Relegated Leeds in administration

Dennis Wiseand Leeds must look forward to life in League One

Leeds United have been relegated to League One after being deducted 10 points for going into administration.

The 10-point deduction - in accordance with Football League rules - means Leeds will finish the season at the bottom of the Championship.

However, they will not lose any points for the start of their first season in League One in August.

Administrator KPMG has already agreed to sell the club to a newly-formed company led by chairman Ken Bates.

A cash injection of approximately £10m is required to continue trading

Leeds' administrators

A KPMG statement said: "Shortly after their appointment the joint administrators agreed to sell the business and its assets to a newly formed company.

"This company is 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).

"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."

KPMG also revealed the club had debts "totalling approximately £35m, with a cash injection of approximately £10m required to continue trading".

The statement added: "The administrators understand from discussions with the Football League that the administration will result in the immediate deduction of 10 points.

"This means that next season the club will start the campaign in League One with no points deducted."

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