Leeds ownership battle heading for court

Leeds United’s future remains dogged by uncertainty after a legal battle over the club’s ownership was put off until September.

The Football League’s board will discuss the Yorkshire club’s situation next week and are likely to allow Leeds to start the new season despite the looming court case.

There are concerns however that Ken Bates’ threat to cease funding the club due to a legal challenge by UK Revenue and Customs (HMRC) could have severe implications.

Leeds are in the hands of administrators KPMG who are legally obliged not to run up any more debt and if no funding is coming in to begin to wind the club up.

HMRC, who are owed £7.7m in unpaid tax and VAT, are challenging the resale of Leeds to Bates and Leeds United Football Club Ltd by the administrators and a five-day hearing will take place from September 3.

HMRC launched their challenge on Tuesday against the Company Voluntary Arrangement (CVA) proposed by Leeds United Football Club Ltd and accepted by most of the club’s creditors.

Bates had offered to pay them a total of 8p in the pound, but that was rejected.

KPMG’s barrister Louis Doyle told the court that HMRC’s appeal against the CVA would threaten to prevent United from starting the season.

Doyle said: “The cessation of these proceedings will actually stop Leeds playing at the start of the season. It remains to be seen what approach the league may take to that.”

One option would be for the administrators to abandon the deal proposed by Bates and Leeds United Football Club Ltd and seek different buyers for the club.

On Tuesday Bates issued a stark warning telling Yorkshire Radio: “If there is a legal challenge it could take two or three months to get to court and be decided. In the meantime, who is going to pay to run the club? So far it’s been funded by the ‘new Leeds’ but if there is a challenge the ‘new Leeds’ won’t do it because it’s a risk. The implications are that the club would close down.“