YEP Leeds United vote too close to call
The future of Leeds United is hanging delicately in the balance after a knife-edge creditors' vote saw Ken Bates secure only a tiny majority. Mr Bates and the board got the 75 per cent they needed to secure the compulsory voluntary agreement that would wipe the club's debts. But because the final total was 75.02 per cent administrators KPMG felt that a recount was needed. The second count will be held on Monday when creditors will be asked to return to Elland Road. They endured a six hour meeting and two votes at Elland Road's banqueting suite yesterday. Bates had hoped that block votes from major creditors Krato Trust and Astor Investment Holdings would force through the CVA. Had that happened Leeds would have been free of its massive debt, which was approaching £35 million towards the end of last season. Creditors had been warned, both by letter and in a presentation to the meeting, that a rejection of the CVA would have seen Leeds taken into liquidation. A late change to the terms of the CVA was put on the table by club director Mark Taylor, who said an extra £5 million would be made available to creditors - worth an equivalent of 16p in the pound - should Leeds return to the Premiership within five years. "I have nicked that idea from (rival bidder] Simon Morris," The meeting heard that Mr Bates would have been able to regain control despite producing just £500,000 in his initial proof of funds. Some creditors raised concerns that the cash pot would be empty after the administrators had been paid. As of Friday, May 25th, KPMG had run up a bill of £243,000 while Walker Morris were owed £175,000. When those figures were announced several voices in the meeting said: "There is nothing left." Former chairman Gerald Krasner said: "The creditors are going to get shafted yet again." Mr Krasner, an insolvency expert, led much of the questioning at the meeting. He failed in an attempt to change the anti-embarrassment clause which would have forced the club's prospective owners to pass a 50per cent dividend to creditors should the club be sold for £5m or more in the next five years. As it stands, such a dividend penalty will be in place for six months should Bates succeed in his CVA bid. The meeting was told that Astor is administered in Geneva, Switzerland. Earlier in the day, under forensic questioning from former United chairman Gerald Krasner administrators KPMG admitted current chairman Mr Bates had shown only the half-a-million as initial proof of funds. "Further sums have been produced since," joint administrator Richard Fleming said. Creditors attending today's crunch meeting at Elland Road had been warned by letter by the club's main creditors that they will take Leeds into liquidation rather than acceptance anything other than the compulsory voluntary agreement on the table. The club's creditors were meeting at Elland Road to decide whether to accept his penny-in-the-pound proposal which would take United out of administration. A "yes" vote was at one stage seen as a foregone conclusion - but yesterday it emerged that FIVE alternative offers were on the table. Former Leeds director Simon Morris and Duncan Revie, the son of legendary manager Don, are thought to be two of the challengers to Bates, pictured. A third is believed to be a US-based financial group with "the ambition and resources to make a difference to Leeds United". All five consortia were said to be offering United's 1,300-plus creditors more money than they would receive from the Bates package. Before the meeting ex-Leeds chairman and insolvency expert Gerald Krasner said those rival bids meant the penny-in-the-pound offer was "not a done deal". However, the two offshore companies which held the key to today's decision were reported to have told administrators KPMG that Bates's was the only deal they would accept. Astor Investment Holdings and Krato Trust were owed around £15m of United's total debt of £35m, giving them approximately 45 per cent of the votes at the meeting. Bates, chairman since 2005, needed 75 per cent support to remain in charge. Smaller creditors arriving at Elland Road today had mixed views about the prospect of Monaco-based Bates staying at the helm. Andre Deveaux, 61, of East Ardsley, said: "We are in favour of Ken Bates at the moment but we will see what others are coming up with at the meeting." Paul Grey, 60, from Halifax, said: "I've been supporting Leeds through thick and thin for over 40 years. I won't be bothered if Bates gets control. I think he will." Steve Morritt, of Boston Spa, called for a local owner to buy the club and breathe new life into the club. He said: "There used to be a real buzz about this place, it really was the pride of Yorkshire but now all I can see and smell is despair and decay." Steve Millward, of Guiseley, said that if he was to cast a vote it would probably be in favour of Bates. He explained: "If he gets thrown out I don't know what the consequences will be, but there has been talk of liquidation which would be a disaster." Earlier this week Bates warned that the club was "unlikely" to survive if his offer was rejected. Under his deal the Inland Revenue would receive just £70,000 of the £7m it is owed. The city council is owed nearly £1m in unpaid rates and other bills. United went into administration at the start of last month after years struggling with the financial legacy of their expensive bid to "live the dream" under former chairman Peter Ridsdale. Within minutes KPMG agreed to sell the business and its assets to a newly-formed company led by Bates, subject to approval by creditors and the Football League. Leeds-based property developer Simon Morris wants to build a new 50,000-seater stadium on the Elland Road site as part of his plans to revitalise United following their relegation from the Coca-Cola Championship. Duncan Revie's bid, meanwhile, is rumoured to have the backing of Sheikh Mohammed Al Maktoum, the mega-rich ruler of Dubai. See Saturday's YEP for the full story on the creditors' meeting. This page will be continuously updated throughout the day. Keep checking back for Leeds United updates. Last Updated: 01 June 2007 _______________________________________________ the Leeds List is an unmoderated mailing list and the list administrators accept no liability for the personal views and opinions of contributors. 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