http://www.lawteacher.net/company-law/essays/football-club-administration.php Leeds United Football Club To start there will be a summary of how Leeds United Football Club (LUFC) got into administration. LUFC was held in a limited company called âLeeds United Association Football Club Ltd' (LUAFC). In the 2002/03 season the club had debts of £79 million. This forced player sales and the club were relegated from the Premier League in 2004 with debts of £103million. In 2004/05 Elland Road, the club's stadium, and the club's training ground were sold. This was not sufficient to alleviate the financial position and in the 2005/06 season Ken Bates bought a 50% stake of LUFC for £10million and became the director of: Leeds United Football Club Ltd (company number 05334247); LUAFC; Leeds United Stadium Ltd; Leeds United Retail Ltd; and Leeds United Investments Ltd. On the 28th April 2007 Leeds' relegation to League One appeared certain. On 4th May 2007 administrators KPMG were appointed as the administrators of LUAFC by the directors out of court under Insolvency Act 1986, Schedule B1, paragraph 22. LUFC were docked ten points and were relegated to League One. The administration process of LUFC will now be examined in detail. The administrators KPMG were appointed on the 4th May 2007. They were appointed by the directors of LUAFC. The administrator quickly agreed to sell the business, for an undisclosed sum, to a newly formed company called Leeds United Football Club Ltd (company number 05765697) (Directors â K. Bates, S. Harvey and M. Taylor). The administrator had received bids from other parties but had decided that Bates' offer was the best option for the creditors and LUFC. The administrators proposed a CVA based on this offer and called a creditors' meeting in which the creditors would consider the offer and decide whether to approve it or not. If the CVA was approved this would comply with the FL's insolvency policy which states that a football club which is in administration must exit administration via a CVA. On 1st June 2007 Bates' offer was narrowly accepted at a stormy creditors meeting. Bates needed 75% of creditors in value of the creditors present, in person or by proxy, and voting to accept the proposed CVA. He received 75.02%. A recount was ordered due to the extremely narrow acceptance. There were no reports of a meeting of the clubs members being held. The CVA proposal was approved by the recount as 75.2% of creditors had voted in its' favour. Therefore as long as there were no challengers to the CVA acceptance in the statutory 28 day period and the FL approved the sale, the sale would be complete. The FL's approval was required in order for the âfootball share' to be transferred back to the new company which would hold LUFC. On the 3rd July 2007, one hour before the end of the 28 day period to challenge the CVA, HMRC lodged a challenge to the CVA âbased on procedural matters relating to the way which KPMG conducted the creditors' voteâ. As a result of this, the administrators announced that they would be putting the club back up for sale on the 6th July 2007. This was due to the fact that the legal challenge would have stretched into the pending football season and LUFC may have been prohibited from starting the season whilst the club was in legal turmoil. The CVA challenge of HMRC was avoided due to the club being put back up for sale. The Football League announced that Leeds could start the new season (the 2007/2008 season in the FL League One). On the 8th of July Bates stated that he would take legal action if the club was sold to a rival bidder. On the 11th July 2007 the administrators announced that they had sold the club to Newco (Bates' consortium) for an undisclosed sum. It was unknown how much of the club's debt Bates intends to pay off. The club's administrator stated âThe approved deal represents the best result for creditors in the circumstances and we believe provides the club with the best chance of survivalâ. On 3rd August 2007 the Newco was transferred the âfootball share' for LUFC by the FL, allowing LUFC to start the season. However, the FL gave LUFC a fifteen point deduction as they had failed to come out of administration via a CVA. LUFC appealed, but their appeal was rejected on 9th August 2007 by the FL chairmen at a meeting in London. However, LUFC did not accept this decision and decided to issue the FL with a High Court writ claiming that the FL acted âoutside of their jurisdiction' in handing LUFC an additional fifteen point deduction. LUFC accepted an offer from the FL of a three man independent arbitration hearing in private. The matter is still ongoing. I will now summarise the main facts of LUFC's administration. The administrators KPMG where appointed on 4th May 2007 by the directors of LUAFC and an administration order was obtained. The club was sold to the Newco on July 11th 2007. This means the club was in administration for nine weeks and five days. A CVA was agreed but was discarded after a challenge brought by the Inland Revenue. The club was subsequently sold without a CVA. The Football League's Insolvency policy was not followed, therefore LUFC were deducted fifteen points from the next season (2007/2008) as well as the original ten points from entering administration. However, LUFC have appealed against the deduction of the additional fifteen points and have agreed to a three man arbitration in private to decide the issue. This issue is still ongoing. ----------------- So Leeds United lost all their history because they transfered to a newco?
Oh this is pricless. Who are you trying to convince? Send this in a e-mail to the SPL/SFA/UEFA/FIFA, i'm sure they will take it all on board and allow Rangers FC to retain their history even though they no longer exist.
A football club in financial meltdown transfers to a newco without a CVA and still remians the same club with the same history. I thought it might have interested you buoys.
This is tedious, you'd be as well to chuck some chicken bones in a circle drawn in the dirt to predict what's going to happen with Rangers than trying to use logic.
[h=1]Rangers and History. It’s Very Simple and Neil Doncaster Has the Answer[/h]The issue of history looms large in the minds of football fans at all times, but especially now, as “Rangers” face the possibility losing their great heritage and list of trophies and competitions won, should the team re-emerge as a newco. There are legal arguments about the history attaching to the corporate entity, which can become complicated when thinking about teams that existed, like Rangers, before the limited company in which it existed was formed. Teams, especially in England, have gone through corporate re-structuring in insolvency, and have come out as a new company but the same team. I have looked myself through the SPL and SFA Rules and Regulations to see if they help. At one stage the issue of the “SPL Share” seemed to provide an answer, until it was pointed out that, every year, one share at least changes hands. For example, the share held by Dunfermline this season just past has been, or will be, transferred to Ross County, but the history does not go with the share. Airdrie United, which took over Clydebank, officially has Clydebank’s history. However, Airdrie fans believe that Airdrie United is a continuation of the old Airdrieonians, and for all that we Albion Rovers fans point out that they are not, we actually still think of them as the “Diamonds” of old. The history lies in the hearts of the fans. AFC Wimbledon and the MK Dons provides an interesting example. Wimbledon FC had a move to Milton Keynes approved in 2002. This caused a lot of upset in the London Borough of Merton, where they had played. Campaigns were started to get them back or to replace them. AFC Wimbledon started up at the bottom rung of the football ladder. MK Dons kept the history, against competition from AFC Wimbledon, until in 2007 it agreed to hand over its trophies and medals, not to AFC Wimbledon but to Merton Borough. However MK Dons now only claim to have been formed early this century and have given up their claim to the FA Cup in 1988. AFC Wimbledon claim that now. In light of the MK Dons repudiating its “history” it would seem incongruous at best for any fans to claim a history the club itself had rejected. As the Wimbledon Independent Supporters’ Association wrote to the FA in 2003 “The identity of a football club is implicitly bound up in its community… The next step must, logically, be for the club to take the name of its new conurbation, and consign the name of Wimbledon FC to history, just as Meadowbank Thistle was consigned to history when Livingston was born. The Brooklyn Dodgers had the good grace to expunge references to where they originated and rename themselves the Los Angeles Dodgers and that good grace would be welcomed in this instance.” In the same manner therefore, a “Rangers” playing at Ibrox would be considered by the fans to be the continuation of the previous “franchise”. Mr Doncaster said what is key to this in an interview with the Scotsman last month. The vital sentence came in response to a question about the ongoing SPL investigation into illegal (under football rules) payments/dual contracts. He said:- “You would expect the football club to take with it responsibility for anything that emerged from that investigation”. There, in a nutshell is the answer to the problem of “history”. Whilst legally newco cannot be held responsible for oldco’s debts and legal wrongs, the SFA and SPL are clubs which can choose whom to admit as members. They can set their own conditions. The position Mr Doncaster, and one would assume Mr Regan, would be moving towards would be based on a simple question to whoever runs “Rangers”. If newco Rangers wants the good parts of oldco, such as the history, it has to accept the bad parts, such as the penalties for bringing the game into disrepute and any penalty for the illegal payments/dual contracts inquiry. If newco wants to be treated as a new entity, with no penalty for what happened to oldco, it would have to divest itself of its history. If it wanted to keep the history, then it pays the penalties for wrong-doing. Whilst I am sure that many fans would maintain the history, it would come against a backcloth of the club itself acknowledging it was in fact a new entity, or at best a cousin to the oldco. A business decision would be a no-brainer. In return for avoiding penalties that could include suspension from the League, just accept that you are a new company? In any field other than sport, that choice would take 1 second (on a slow day). But history matters, and fear of alienating some loyal fans might provoke the owner of newco into formal acceptance of any penalties, as long as this enables the new business plan still to work. Whatever happens, subject to the possibility that past titles won during the operation of the alleged illegal payments might be stripped, the football record books will show that Rangers won many prizes, culminating in the European Cup Winners’ Cup in 1972. They will remain whatever happens to Rangers. For example, Renton, St Bernard’s, Vale of Leven and Third Lanark Rifle Volunteers/Third Lanark all remain listed as winners of the Scottish Cup. The issue is not whether Rangers “loses” its history; it is whether newco Rangers agrees to keep it.
Answer a question with a question, proof (as if it were needed) that you don't have a ****ing clue what you are talking about. [h=1]Leeds Utd: creditors were satisfied, not a Liquidator’s Charter[/h]I see Leeds United are being held up as a model for Rangers to liquidate and emerge as a new club. Leeds United’s circumstances are highly unlikely to bear any relationship with those at Rangers unless Duff and Phelps can agree a Creditors Voluntary Arrangement. Leeds United AFC Ltd entered administration in the control of KPMG Restructuring on 4 May 2007 and on the same day were sold to a new company Leeds United Football Club Ltd subject to a Creditors Voluntary Arrangement (CVA) being agreed. Both Leeds United AFC Ltd and Leeds United FC Ltd were controlled by Ken Bates. A CVA requires 75% of creditors (by value) to vote to accept a reduced percentage of the money they are owed. The company was forced to act as HMRC, who were owed in excess of £6m, had issued a winding up petition which was due to expire on 25 June 2007. Before creditors voted on the CVA several other bidders came forward with offers for the club, however, the vote, on 1 June 2007, returned 75.02% of creditors accepting the CVA offer (75.20% after a recount). Creditors can challenge a CVA within 28 days of the vote. On the 28[SUP]th[/SUP] day, 3 July 2007, HMRC challenged. With the CVA subject to a challenge, KPMG asked for further offers for the company to be submitted by 9 July 2007. Despite the extended offer period, the administrators still accepted the offer from Ken Bates Leeds United FC Ltd. With a CVA agreed, subject to challenge, the Football League transferred Leeds United AFC’s league share to Leeds United FC Ltd under its “exceptional circumstances” provision. The League imposed a 15 point penalty on the club for the 2007-08 season for failing to satisfy the outstanding legal challenge in time, necessitating the ‘exceptional circumstances’ rule. HMRC withdrew their objection to the CVA the following month. Leeds United subsequently appealed against their 15 point penalty citing a CVA had been agreed and that the league programme does not allow time for spurious challenges to be dealt with. The Football League refused the appeal. Believing Football League procedures were at fault, not their own behaviour, Leeds United served the League with a High Court writ to challenge the points deduction, however, both parties agreed to abide by the findings of an arbitration panel hearing. The arbitration panel found against Leeds United citing the following two reasons: A director of Leeds United FC signed an earlier agreement not to commence any proceedings against the League. Leeds United waited 7 months before commencing the action, which brought unnecessary sporting consequences on other promotion chasing clubs, specifically Doncaster Rovers, who would no longer be in an automatic promotion spot if Leeds’ 15 points were restored. In summary: Leeds United AFC Ltd’s administrators achieved the necessary 75% support for a CVA. They withstood the challenge from HMRC, paid creditors and concluded the transfer of assets, including League share, to Leeds United FC Ltd, according to the terms of the CVA before winding up the old company. No loose ends were left. This is not a Liquidator’s Charter. Provisions in football only exist to transfer a League share from one company to another if creditors are satisfied, either by being paid in full or, as with Leeds United, with 75% agreeing to accept a diminished amount.
It seems I've more of a clue than you. I'm using Leeds as a prime example of them moving to a newco without a CVA. Yes they got punished for it but has there ever been any doubt that this is the same Leeds United that won the league in 91?
Did Rangers Creditors accept the offer made? Leeds United AFC Ltd’s administrators achieved the necessary 75% support for a CVA. They withstood the challenge from HMRC, paid creditors and concluded the transfer of assets, including League share, to Leeds United FC Ltd, according to the terms of the CVA before winding up the old company. No loose ends were left. This is not a Liquidator’s Charter. Provisions in football only exist to transfer a League share from one company to another if creditors are satisfied, either by being paid in full or, as with Leeds United, with 75% agreeing to accept a diminished amount.
Airdrie Gretna Luton All liquidated....all lost their historic Leeds Livingston Both on brink of liquidation....avoided it by skin of their teeth....kept history It really is that simple
