Have a look at para 8 onwards - (oh and also para 2)
AFTER THE FIRE (SALE). Post Plc events at Leeds United
V6 E.& O.E. Updates and corrections are most welcome.
At the fans forum meeting immediately following their takeover from the Plc
the Kransortium lead the fans and media to believe that the massive debt
problem had been taken care of and in particular that the Bondholders had
"gone away". It WAS known for CERTAIN by some fans at that meeting that the
Bondholders had very definitely NOT been paid off nor had they allowed the
debt to be written off, though the precise current position was NOT known.
Immediately following the end of the forum those fans' information was made
known to Mr Krasner individually and personally. This was not the time,
however, to publicly pour cold water on the unfolding "rescue" of the club.
It was fully understood that the "footballing debts" would have to be met in
total (over time) but that football related debts due to REFFS (the outside
financing of players transfers) might not fall within that category.
The Krasner board used a company called Commercial Dream Ltd to sell the
clubs option to purchase the former haulage yard behind the Kop to Stanley
Leisure for a reported sum of £5 Million. A submission by Stanley Leisure
for a casino development on the site is still pending planning permission.
Should this development take place the club could receive an additional sum
up to a maximum of £9.6 Million. Leeds has been named (in Feb 2007) as an
approved location for a major casino (but not the single super-casino).
In November 2004 the Krasner board sell Elland Rd stadium to Mr Jacob Adler
but with a buyback option. Only one director meets with Mr Adler prior to
the deal being completed. The buyback price is 11.36 times the annual rent,
and the rent has increase clauses. The exact construction of this deal is
not known and Mr Adler has several companies. Proceeds of the sale are
believed to have been used to repay a loan made by Jack Petchey of Aston
Villa (also refer to the Billy Bremner statue) to the Board as part of the
takeover from the Plc. It had been intended that proceeds from the (failed)
sale of 20 yr season tickets would be used for his purpose.
Mr Adler had previously done a similar deal with the Krasner board on Thorpe
Arch using a different company- BARNAWAY LTD. (requires sight of documents
for verification).This deal has a buyback clause which omits the first team
pitch which means that this area will be lost if a buyback is triggered.
Interestingly, despite doing this deal, Barnaway has filed DORMANT COMPANY
ACCOUNTS for the period to 31/7/2005 and has an annual return overdue from
9th Aug 2006. Also interestingly, the Barnaway deal does in fact give the TA
Barn away. The source of Mr Adlers substantial funding is of course a
personal matter and is not known.
As at June 2006 the total buyback price for both E Rd and TA was £18.2
Million.
One of Adlers companies - GADFORD LTD. (Co reg no 05183041) incorporated
19/7/2004 is struck off the register at Companies house as being dissolved
on 25/4/2006. No annual returns and no accounts have ever been filed and
accounts will NEVER be placed on the public record at Companies House.
Gadford Ltd had granted the E Rd stadium buyback option to Melvyn Helmes
property company (M.R.H. Properties Ltd 02632517 incorptd 25/7/91 active
company), with a clause confirming that the buyback is for the benefit of
"THE LEEDS UNITED ASSOCIATION FOOTBALL CLUB LIMITED". There are no third
party rights to enforce the clause under the act. Land Reg refs WYK624246 &
WYK792229.
On 25th January 2005 company number BC639051 Teak Commercial Ltd is
registered in the British Virgin Islands where companies are allowed to keep
undisclosed the names of directors and beneficial owners (shareholders).
February 2005 Ken Bates takes over as chairman of LU football club in his
capacity as the representative of Forward Sports Fund (FSF), which is a
Swiss registered trust. FSF is the ultimate controlling party of the
football club but the beneficiaries of the trust are undisclosed. The true
owners of the club therefore remain unknown.
A company which later has its name changed from Leeds United (see below) to
Romans Heavies Ltd is used as the vehicle for this takeover. Until 2nd
September 2005 Romans Heavies owned 50% of the issued shares in the club.
After that date its shares became only 3.5% of the issued share capital.
FSF loans the club £4.5 Million and Astor Investment Holdings Ltd which is a
company with links to FSF, makes an interest bearing loan of approx £8
Million to the club.
Rivoli Ltd is paid £186,000 by the club in consultancy costs. P. Murrin is
a shareholder in Rivoli and also has an interest in FSF. The legal costs of
£203,000 are paid by the club to Mark Taylors firm at Chelsea Harbour. Mr
Taylor is a club director.
On 16th March 2005 the ownership of E Rd is transferred for £8 Million from
Gadford Ltd to TEAK COMMERCIAL LTD (BVI) and the beneficial owners remain
undisclosed. This transfer of ownership is not publicly announced (by any
party) but on 4th January 2007, following the deliberately delayed
revelations by fans on a fans forum, the football club confirms that Mr
Bates has no involvement of any kind with the current BVI owners of the
stadium and also that the club is looking to exercise the buyback option on
the stadium once payments to former players cease (these payments cease in
June 2007). The club also states that the rent on the stadium is still being
paid to the same place as originally arranged and a somewhat irritated
(perhaps understandably) Mr Taylor states that the club does not know the
identity of the new owners of the ground (but he is nevertheless somewhat
curiously certain that the unknown owner is NOT Mr Bates).
Gadford Ltd is struck off the register at companies house as being dissolved
on 25/4/2006. No accounts filed. (inserted again here for clarity).
9th May 2006 petition made to The High Court by Melvyn Levi for Cope
Industrial Holdings Ltd (a creditor) to wind up Romans Heavies Ltd.
Originally due to be heard in court on 6th June. Romans Heavies Ltd is now
in liquidation and the full case hearing is awaited. The case is understood
to revolve around directors loans which were (possibly unwillingly) left in
the business by the former directors at the time of the Bates takeover. In
such circumstances the former directors would be likely to require a legal
undertaking that no shares rights issue would take place until their loans
had been repaid. The shares rights issue made by the club after the Bates
takeover (shares of £2 Million of which were purchased by FSF) may be the
trigger for this application to court as it effectively massively reduces
the share of ownership left in the hands of the former directors and thereby
the security of their loans to the club.
The £2 Million received by the club from FSF for the sale to FSF of the new
shares, is used by the club to repay £2 Million to FSF as part repayment of
FSFs previous loan to the club. Essentially this converts £2M of loan
liability into share capital but does not generate any additional money for
the club. If the FSF loan is interest bearing then the club will save the
interest on that £2 Million which has now been repaid. Indications are
however that the loan from FSF is not interest bearing.
As at 30 June 2006 the club writes off a balance of £97,000 in respect of
Romans Heavies Ltd which is in liquidation. At the same date the club has £1
Million in the bank and £12 Million of debts due to be paid within 1 year.
Only £0.25 Million of debt will remain as due to be paid after 30 June 2007
(with the possible addition of the £2.5 M balance on the FSF loan account).
Over the last year the club has repaid £10.6 Million of loans (of which £2 M
was to FSF).
In December 2006 a Leeds City Council meeting receives and accepts a report
from consultants on the location of a proposed long awaited Leeds Arena and
conference facilities. Elland Road (not specifically the football stadium)
features prominently in the report. The location decision is, on the face of
it, postponed for 6 months but enabling moves to locate on Elland Road are
set in motion immediately. Considerable trouble is taken to point out that
other locations are also being considered.
January 2007 Thorpe Arch academy residential facilities (in TA Manor) are to
be closed down with the club reverting to the more traditional landlady
system for the juniors. The trigger for closing the T A residential
facility is thought to be the result of personnel changes which were not
instigated by the club. Mr Bates says that savings at TA have made possible
the £2 price reduction in childrens match day tickets.
January 30th 2007 the government announces that Leeds will be the location
of one of the new major casino developments. Possible locations are thought
to be on Elland Road or on Sweet Street (thought to be Jan Fletchers
"fortuitously" assembled site).
Feb 2007 : Town & Country Properties (Ziffs) are still considering the
possibilities for the former haulage yard behind the Kop.
Feb 2007 : Rumours grow that shares in the BVI company which owns E Rd may
have recently changed hands. This would mean an undisclosed change in the
ownership of E Rd which would mean that the football club had a new landlord
and that somebody other than Mr Adler was now receiving the hefty rental
payments.
Feb 2007 : There are growing but unsubstantiated indications that a behind
the scenes investor in an East Coast club may be in negotiations with LUFC.
March 2007 is thought to be the time after which anyone is able to become
the 100% owner of the club without triggering a payment to Bondholders.
Notes on the Kronsortium debt arrangements
Whilst the debt to REFFS was thought to have been written off for a cash
payment at the time of the Krasner takeover, it transpires that £435,000 has
been paid in the year 2005-6 in respect of terms of contracts for players
registrations, and that £3 M remains as a contingent liability dependent
upon the success of the team and of individual players. It may be that these
contingent payments are arrangements directly between clubs and that REFFS
may not be involved. It is not known whether or not success in the play-off
final would have triggered this contingent liability of £3 Million.
It transpires that the bondholder debt was in fact acquired from the
bondholders on 19 March 2004. Up until June 2006 the bondholders had been
made payments of £14.6 Million. The MAXIMUM future liability which could
arise to the bondholders is a further £13.5 Million (spread over until
2020). It is thought (but NOT CONFIRMED) that promotion to the Premiership
would trigger these payments. As at June 2006 the board of Leeds United "do
not consider that it is probable that these amounts will become payable".
This may simply be an accounting device to explain the lack of provisions in
the accounts for this contingent liability and that the club would intend
that the financial benefits of promotion might meet the imposition of such
liabilities.
It is also possible that promotion last season would have triggered £16.5
Million of debt in respect of these contingent liabilities.
00170600 LEEDS UNITED ASSOCIATION FOOTBALL CLUB LIMITED (THE)
incorporated 2/10/1920 reg office Elland Road Co reg
00170600
Authorised share capital as at 30/6/05 775,000 shares
Authorised share capital as at 30/6/06 10 million shares
Issued and paid for share capital as at 30/6/05 326,547 shares
Issued and paid for share capital as at 30/6/06 4.826,547 (increase of 4.5
Million shares)(of which 2 million were sold to FSF)
05765697 LEEDS UNITED FOOTBALL CLUB LIMITED incorptd 3/April/2006
reg office Chelsea Harbour Co. Reg. 05765697
05334247 ROMANS HEAVIES LTD (name changed 2/12/05 previous name LEEDS UNITED
FOOTBALL CLUB LIMITED) incorporated 17/1/2005. (n.b. NOT the same company as
above). Annual return with list of shareholders was filed as at 17/1/06 but
accounts may never be placed on the public record as the company is in
liquidation.
GADFORD LIMITED 05183041 Levi House, Bury Old Road M4 7QX
E & O E - corrections welcome
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