The crisis at Leeds has deepened after our consortium interesting in purchasing the club pulled out and the creditors failed to grant another debt standstill agreement. The club asked the Stock Exchange to suspend its shares. The creditors did, however, stop short of forcing the club to the wall immediately.
The consortium that pulled out, advised by corporate finance firm Zeus headed by former Huddersfield Town chairman Terry Fisher, had access to the £25m needed to satisfy the creditors but was thought to be concerned about the financial implications of relegation. The other consortium, that may or may not involve former Bradford chairman Geoffrey Richmond, emphasised in a statement released through a Leeds accountant that their plan was not dependent on Premiership survival. They emphasised, 'Any suggestion that the consortium is looking at this acquisition as an asset-stripping exercise is completely untrue, so much so we can make a commitment now that, if we are successful in buying the club, Leeds United's future is and always will be at Elland Road.'
There are now three possible scenarios:
~ Leeds go into administration quickly and the administrators do a quick deal with the remaining consortium that will satisfy the major creditors. This could possibly involve the major creditors accepting a cash payment plus ownership of Elland Road. As is so often the case, all unsecured creditors would lose their money.
~ Leeds goes into administration and there is no deal with a buyer. The administrator's priority would be to cut costs quickly by selling players and cutting wages. This would certainly undermine prospects for Premiership survival.
~ Leeds stay out of administration and the club is given up to two more months to find the right buyers once it becomes clear whether Leeds is going to survive in the Premiership or not. However, it looks as if the creditors want a quicker solution.
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