The wonderful story of Leeds Utd

 

The administrator, KPMG, set up two ballots for creditors to determine the future ownership of the Elland Road club. Mark Taylor, a current Leeds director and member of Bates’s Leeds United Football Club consortium bidding to take over today, said the offshore company Astor Investment Holdings has a claim against the club in the region of £18m.

That sum makes it the most influential creditor and entitles it to approximately 45% of the votes in today’s ballot – 75% of votes are required to approve any single bid. Astor had already made plain to the administrator its preference for Bates’s bid, which is one of six on the table and offers to pay creditors only 1p in every pound owed.

The pressure has been stepped up in recent days and, having received instructions from Astor, KPMG has issued a letter to all creditors warning that the offshore company will veto all offers other than the Leeds United Football Club bid, whose directors are Bates, Taylor and the club’s current chief executive, Shaun Harvey. KPMG’s letter states further that, if the Bates bid is not approved, Astor will allow the club to slip into liquidation.

It is an intriguing development, particularly given the existence of a rival bid from the former Leeds director Simon Morris that guarantees a payment of £8m to Astor plus a share in future profits arising from the intended redevelopment of Elland Road, which Morris would propose to buy back from its landlord.

Taylor explained to the Guardian last night that during a meeting with representatives of Astor in Guernsey this week he had received reassurances about the company’s faith in Bates’s management and the reasons why it would decline the £8m offer.

“I think the reason for that is that they are prepared to back the current management, that is Ken Bates and Shaun Harvey,” said Taylor. “Astor always went into it on the basis that they would back Ken.

“I went to Guernsey in the week and they are very, very disappointed that the Leeds business community has not supported the club in any way at all. When we were looking for investment – on quite reasonable terms, I might add – no one came forward. Now people are coming out of the woodwork.”

There have long been unsubstantiated rumours that Astor is controlled by Bates – which would have implications for the company’s voting rights in the creditors’ ballot – but this has always been denied by Bates and the administrator.

Taylor insisted yesterday that the identities of Astor’s ultimate owners had been disclosed to the administrator. That contradicts a statement this week from KPMG’s joint administrator, Richard Fleming, who declared that the owners of Astor were unknown to him.

However, the administrator reiterated yesterday that to the best of its knowledge there was no legal connection between the offshore company and Bates, something it has emphasised throughout the process of administration. “The administrators have undertaken extensive inquiries and they were assured that Astor Investment Holdings is not a connected party,” said a spokeswoman for KPMG.

Vying with the Morris and Bates bids are four other consortiums, two from the US, one from the UK and another from a private individual whose provenance has been withheld. The second UK consortium proposes to pay a total of £108,966 to non-football employee creditors and £3,185,003 to unsecured creditors.

The first US fund would pay up to £3m to unsecured creditors while proposing to discuss outstanding liabilities with investor creditors such as Astor and another offshore company, Krato Trust. The second has offered £108,966 to non-football employees, £3,282,102 to investor creditors, £1,235,144 to other unsecured creditors and some further dividends contingent on future promotions.

The private individual would pay just less than £1.5m to unsecured creditors and £4.5m towards the club’s running costs in May and June. Astor opposes all these bids.

Leeds numbers

£18m

The amount that Astor Investment Holdings would lose if the club were bankrupted

£8m

The sum Astor could receive were creditors to approve the UK-based consortium led by the former Leeds director Simon Morris

1p in the £

How much Ken Bates’s consortium proposes to pay creditors

The result: a tie – they are counting it all again