Krasner blasts 'derisory' Bates offer

Former Leeds chairman Gerald Krasner has branded Ken Bates’ offer to pay off the club’s creditors as “utterly derisory”.

Krasner, an expert in corporate insolvency, has offered to represent the creditors free of charge in a bid to prevent Bates retaining control at Elland Road.

Bates placed Leeds in administration earlier this month and could get the go-ahead to buy the club back as director of a newly-formed company at a creditors’ meeting on June 1.

The former Chelsea chairman has offered to settle the club’s debts at 1p in the £1 and already has the backing of the club’s major creditors who are owed a reported £22m (€32.2m).

However, in a letter sent to creditors Krasner said: “Having now seen the papers in connection with the proposed CVA, it appears that Mr Bates’ new company is proposing a dividend of 1p in the £1.

“Quite frankly I consider this offer utterly derisory and unless you agree with this proposal, it is up to you as a creditor to make your voice heard.”

Krasner, whose consortium rescued Leeds from almost certain administration back in March 2004, added: “Like me, you will have watched with dismay the events surrounding Leeds United over the last few weeks.

“As an ex-chairman of the club I am most upset at the rapid decline of the club over the last 12 months.

“I have had a lot of approaches recently from fellow professionals, acting either for creditors or for third parties, who wish to invest in the club, but do not want to deal with Mr Bates.

“They have all asked me the same question – ’What can be done?’

“My answer has always been that if the Company Voluntary Arrangement (CVA) proposal by the joint administrators is voted down, then I believe that substantial new investment would come quickly into the club and the return to creditors would be much higher.

“The CVA papers are voluminous and difficult for the average layman to understand. It may be that you can attend the meeting on June 1, or you just want to make your views heard.

“It is unlikely that most of you will want to spend the money to take the necessary professional advice on what is a very complex topic. I have, therefore, decided in my capacity as a licensed insolvency practitioner to offer to assist you absolutely free of charge.

“So if you are a trade creditor, a football creditor, a footballer, a season ticket or debenture holder then please get in touch.”

Krasner, director of Leeds-based solicitors Bartfields, has stressed he has no financial interest in the matter, but is acting on behalf of a number of creditors who have already approached him.