WSC 245 July 07

How do you solve a problem like Leeds United? Reeling from relegation, fans have spent the subsequent weeks wondering who will control their club in League One. After much wrangling, Ken Bates has secured the 75 per cent backing needed from creditors for his newly formed company, Leeds United Football Club Limited, to take over and bring the club out of administration, though the deal will not be finalised until the Football League are satisfied that all “football debts” are met in full. Other creditors stand to receive just an ­eyebrow-raising 1p in the pound.

Leeds’ stated debts are £35 million, much of it owed to offshore companies Astor Holdings and Krato Trust (said to be owed a combined £18m), as well as the Swiss-based Forward Sports Fund, the holding company that owned the club before administration and of whom Bates is described as the UK representative. Fans are keen to see a verification of that debt, though. With most of the liabilities of the Peter Ridsdale era now behind them, there is some bewilderment at how losses have continued to grow, given the club’s income from transfers and other sources of late.

“We would really like to see a statement of source and application of funds,” says Leeds United Supporters Trust chairman Rick Duniec. “We’d like to see where the money that’s come in has gone to.” Any hopes of a supporter-led rescue were scuppered when the business backer with whom the trust had developed its own bid for the club withdrew once Leeds went into administration.

Perhaps most prominent among the five or so rival bidders has been former director Simon Morris, whose £10m offer included plans for a major leisure development and concert venue around a revamped 50,000-capacity Elland Road. Gerald Krasner, a former chairman and an insolvency expert, has also been busy, urging creditors to reject Bates’s offer. Has Bates’s victory ended the soap opera? Many issues remain: the ownership of the stadium and training ground; the response of the League; and the attitude of the Inland Revenue, which is owed around £5m, and other aggrieved creditors.

By coincidence, Morris’s and Krasner’s names have been linked with the other club who last month entered an administration of convenience with relegation looming. Boston United followed Leeds’ example once defeat – and therefore demotion – in their final game was inevitable, with debts of around £3.6m. The club’s admission to the Conference was yet to be confirmed as WSC went to press.

Morris is involved in a consortium, Standing Alone, which is seeking to take control of Boston from owners Lavaflow, and has floated a development plan similar to the one touted at Leeds. Lavaflow (and club) chairman Jim Rodwell had mooted an elaborate redevelopment and relocation scheme themselves (see WSC 239), but administration – which is being presided over by Krasner – has plunged everything into uncertainty. As at Leeds, fans are questioning how the debt has mushroomed, in Boston’s case from around £1.2m in 2004. The accounts of both the club and Lavaflow are well overdue.

Less gloomy news at League Two’s other relegated club, Torquay United, where a takeover by a local consortium is set to end a period of damaging uncertainty. A grim season took a turn for the worse in October, when ­long‑standing chairman Mike Bateson ceded control to Chris Roberts, a businessman of unproven credentials, who attracted some gimmicky publicity by ­threatening to sack players who dived to win free-kicks, as well as by grandiose but substanceless promises of a new stadium. After Roberts brought in his Czech friend Lubos Kubik as manager, it emerged that the new chairman had reneged on payments that were due in order to complete his acquisition. With players also going unpaid, Roberts resigned in February – Kubik followed – and back came Bateson, scarcely a popular figure himself due to a perceived lack of investment during his reign, before he sold up again last month.

The new consortium, fronted by Chris Boyce, has appointed well regarded former manager Colin Lee as chief executive and cleared pressing debts, but after the season they have just endured, fans aren’t taking anything for granted. “The club’s been a joke over the last season,” said Torquay United Supporters Trust vice-chair Hayden Jones, “so I’m delighted that the ownership appears to have been resolved. So far these new guys are sending out the right signals and the fact that there are eight or nine of them suggests there’s more solid commitment than there would be if it was only one person.”

From WSC 245 July 2007

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