Leeds United Hearing.

[Jack]

Wahey!

My words exactly

[Chimp]

Previously, a football club that entered administration had to pay the footballing creditors (e.g. other teams) 100% of what they were owed, then they could pay whatever they could afford to non-footballing creditors (e.g. suppliers and HMRC- as they would take an '£x amount is better than nothing approach).

Is this something that was agreed between the HMRC and the football league?

HMRC then decided (correctly) that it was in their interest to attempt to get parity with footalling creditors, so they rejected our CVA.

Okay, but did you have the opportunity to re-submit the CVA with different terms that would be acceptable to the HMRC?

[andyh1884]

To put it very simply; it was for exiting administration without a CVA. (We instead used an EVA).

The 15 points came off as HMRC (Revenue & Customs) have changed their approach to football insolvency. Previously, a football club that entered administration had to pay the footballing creditors (e.g. other teams) 100% of what they were owed, then they could pay whatever they could afford to non-footballing creditors (e.g. suppliers and HMRC- as they would take an '£x amount is better than nothing approach). HMRC then decided (correctly) that it was in their interest to attempt to get parity with footalling creditors, so they rejected our CVA. This then left us without being able to leave administration through a CVA (a CVA is the FL's reccomended approach). We therefore had to leave adminsitration through an EVA (slightly different- I think it is for exceptional circumstances- can't remember what the 'E' stands for right now), this obviously deviated from the FL's reccomended approach so we were deducted 15 points for breaching the FL's insolvency rules- despite no legislation actually existing for this set of circumstances.

Yes, I am saying that every club that goes into administration should (if consistency is maintained) also have a 15 point deduction too. This will continue to happen as long as HMRC maintains it's parity claim, or the FL doesn't create proper legislation. So Bournemouth, Luton and Rochdale are at risk, as is any other club that goes into administration (that is why todays decision was so important- it effects everyone and could seriously mess-up the leagues later on if/when this economic downturn hits clubs en masse). If a club agreed to pay HMRC 100% of their debt, then this could change the situation and create a new precedent, but that is both unclear and unlikely.

...Apologies for spelling/grammar.

The reason was that the rules governing insolvency of ALL companies was changed, not a change in the attitude taken by HMRC. Previously HMRC were what is called 'preferred' creditors, along with the likes of employees, whereby they get paid their debts first before the remaing 'pot' goes to settling non-preferred creditor ie normal suppliers, but the laws were changed so they were no longer considered preferred creditors.

In previous cases HMRC have never had an issue with CVAs as it didn't apply to them - as preferred creditors they got their dues no matter what. Now, however, HMRC rank alongside the average Joe who supplies them with paper for tickets of urinal cakes & invariably these people don't see a 100% return. I think ours saw about 5p for every £1 owed.

As HMRC are usually one of the largest creditors due to the amount of NI and tax due on players salaries (the largest expense of any football club), they make up a large proportion of the non-preferred debt and as such have more voting rights in terms of agreeing to a CVA. If they don't think the arrangement gets them the best deal they won't agree.

As you say, it leaves clubs entering Administration now with a much harder task than in previous times. In the past, the non-preferred creditors have tended to be smaller (relatively speaking) companies, who couldn't afford to turn a CVA down as they'd probably get nowt, but HMRC are able to hold out & if things come to the worst, c'est la vie.

[leedslad]

Yes but they wont, as I assume their adminstrators will wont **** up in quite the way yours did, wasn't this all caused by Ken Bates and the aministrators pissing about. I don't know the ins and outs of it but the deduction was for failing to comply with proper insolvency policy not going into administration.

I could never see it being over turned as Leeds signed papers agreeig to the deduction, it was the only reason they were allowed to compete this season.

And while I agree other teams shouldn't come into it, you have to admit it's a pretty bad time to launch an appeal (one game left for crying out loud) and expect those involved to total ignore the feelings of other clubs, whether they're supposed to our not. Had the appeal been carried out sooner (I know it was difficult due to the Football League refusing to let you appeal) then I could see the reduction being reduced.

I know as much as you do on whether it was Bates 'pissing about or not'.

The argument against us signing to say we wouldn't appeal was supposedly a) it being under duress b) waiving our right to appeal was against EU law/regulations. I'm not a lawyer, so can't clarify that.

We started the appeal process on the 30th August 2007. That's not bad timing- quite the opposite. The reason it has only got to arbitration now, is the FL's delaying tactics, us going through the FL's useless appeal system first, the FL refusing to go to the high court, refusing a public appeal and then responding to our correspondence at the latest date possible.

[leedslad]

Is this something that was agreed between the HMRC and the football league?

Okay, but did you have the opportunity to re-submit the CVA with different terms that would be acceptable to the HMRC?

I can't comment. No-one knows what went on behind the scenes.

[Kilworthfox]

Let me put it simplest, Leeds were deducted 15 points because nobody likes them and they cheated the Football League by going into admin after they had been relegated.

at 5:30 tonight I reminded the Leeds fan in our office and he checked the BBC football site for the news, when the page loaded and read that Leeds points appeal unsuccessful I jumped up in the air whist saying Yeeeeeeeeeeeeesssssssssss and smiling at my LCFC buddy Leeds fan did not bite

DIRTY LEEDS!

[leedslad]

The reason was that the rules governing insolvency of ALL companies was changed, not a change in the attitude taken by HMRC. Previously HMRC were what is called 'preferred' creditors, along with the likes of employees, whereby they get paid their debts first before the remaing 'pot' goes to settling non-preferred creditor ie normal suppliers, but the laws were changed so they were no longer considered preferred creditors.

In previous cases HMRC have never had an issue with CVAs as it didn't apply to them - as preferred creditors they got their dues no matter what. Now, however, HMRC rank alongside the average Joe who supplies them with paper for tickets of urinal cakes & invariably these people don't see a 100% return. I think ours saw about 5p for every £1 owed.

As HMRC are usually one of the largest creditors due to the amount of NI and tax due on players salaries (the largest expense of any football club), they make up a large proportion of the non-preferred debt and as such have more voting rights in terms of agreeing to a CVA. If they don't think the arrangement gets them the best deal they won't agree.

As you say, it leaves clubs entering Administration now with a much harder task than in previous times. In the past, the non-preferred creditors have tended to be smaller (relatively speaking) companies, who couldn't afford to turn a CVA down as they'd probably get nowt, but HMRC are able to hold out & if things come to the worst, c'est la vie.

Eloquently put- can't fault that The preferred creditor status stuff rings a bell now ...I've read/heard it somewhere before.

[davieG]

The reason was that the rules governing insolvency of ALL companies was changed, not a change in the attitude taken by HMRC. Previously HMRC were what is called 'preferred' creditors, along with the likes of employees, whereby they get paid their debts first before the remaing 'pot' goes to settling non-preferred creditor ie normal suppliers, but the laws were changed so they were no longer considered preferred creditors.

In previous cases HMRC have never had an issue with CVAs as it didn't apply to them - as preferred creditors they got their dues no matter what. Now, however, HMRC rank alongside the average Joe who supplies them with paper for tickets of urinal cakes & invariably these people don't see a 100% return. I think ours saw about 5p for every £1 owed.

As HMRC are usually one of the largest creditors due to the amount of NI and tax due on players salaries (the largest expense of any football club), they make up a large proportion of the non-preferred debt and as such have more voting rights in terms of agreeing to a CVA. If they don't think the arrangement gets them the best deal they won't agree.

As you say, it leaves clubs entering Administration now with a much harder task than in previous times. In the past, the non-preferred creditors have tended to be smaller (relatively speaking) companies, who couldn't afford to turn a CVA down as they'd probably get nowt, but HMRC are able to hold out & if things come to the worst, c'est la vie.

We paid significantly more than that as part of our agreement due to being promoted, if I remember correctly it was nearer 40% significantly more than virtually every other team going into Administration; this is why when we are classed as cheats it shows that people are talking out of their arses because we also didn't choose to go into Administration like most clubs but where forced into it by Eric hall as revenge for sacking Denis wise. Unfortunately people are inclined to believe what's written in the red tops rather than listening to the truth.

[andyh1884]

We paid significantly more than that as part of our agreement due to being promoted, if I remember correctly it was nearer 40% significantly more than virtually every other team going into Administration; this is why when we are classed as cheats it shows that people are talking out of their arses because we also didn't choose to go into Administration like most clubs but where forced into it by Eric hall as revenge for sacking Denis wise. Unfortunately people are inclined to believe what's written in the red tops rather than listening to the truth.

I know there was additional payments conditional on going up, staying up for more than 1 year etc, but I thought the initial settlement was fairly low - certainly less than 10p per £1. Maybe I was dragged into the sensationalistic nonsense of the tabloids though

[Raj]

I have an unbiased and fair comment to make about this-

GOOD!!!

FCUK LEEDS FCUKING UNITED!