Leeds United, who were already on the verge of relegation from
the Championship, have entered administration, incurring with it a
10-point penalty.
United appointed administrators KPMG who immediately agreed to sell
the club to a newly formed company called Leeds United Football
Club Limited, the directors of which are Ken Bates, Shaun Harvey
and Mark Taylor.
Richard Fleming, joint administrator and KPMG restructuring
partner, revealed Leeds' debt totalled £35million.
Fleming told KPMG's website: "We were asked by the board of
directors to advise Leeds United on Monday 30th April 2007. The
club has experienced significant financial difficulty for some
years and was burdened with historic debt and wage
structures.
"It was necessary for the club to enter administration as its
balance sheet dated 31st March 2007 indicated debts totalling
approximately £35million, with a cash injection of approximately
£10million required to continue trading.
"Further, Her Majesty's Revenue & Customs recently issued a
winding up petition for approximately £5million. If this debt had
not been paid by 25th June 2007, the club may have been forced into
liquidation."
Football League rules state any club entering administration is to
be docked 10 points.
Administrators understand that these points will be deducted from
this year's total and not next, thus confirming the club's
relegation to League One, but also ensuring, crucially, that The
Whites start next season with a clean slate.
