the biggest sting is yet to come (4 Viewers)
- Thread starter mattylad
- Start date
ryb1983ccfc
New Member
wow depressing!
Flying Fokker
Well-Known Member
Ken Bates' futile call for Lord Mawhinney, the Football League chairman, to resign after last week's decision over Leeds United's 15-point deduction somewhat deflected attention from the prime reason why Leeds resoundingly lost: the club had given a signed, written agreement that they would not mount a legal challenge, then went back on their word. Last February Leeds did issue high court proceedings against the League, which were referred to arbitration under Football Association rules.
The three-man arbitration panel found that when Leeds emerged from a £35m insolvency last summer Bates agreed to the League's imposition of a 15-point penalty, which was in fact lenient because Leeds could have been expelled or relegated to League Two. Leeds agreed in writing to accept the penalty and promised that while they could appeal to the League's clubs, they would not mount a legal action. Mark Taylor, Bates' solicitor, signed the agreement on Leeds' behalf. "Leeds hereby covenants," said the crucial clause, "that it shall not... commence... any proceedings... before any court [or] arbitration body... against [the League]."
The panel hearing Leeds' appeal therefore decided it was being asked to determine proceedings that the club had promised not to bring. In its ruling, the panel wrote: "The case begins and ends with [the agreement]. There is no basis to allow [the club] not to honour that covenant."
Mawhinney, far from resigning, feels wholly vindicated, and the League has been significantly strengthened. The judgment stated that the League did have the right to impose conditions when Leeds failed to agree a company voluntary arrangement (CVA) after going into administration, and that the 15-point penalty was "reasonable and proportionate". On Leeds' conduct in bringing the case, and Bates' comments, Mawhinney was scathing:
"The fact that Ken Bates personalised it on me was a distraction from the fact they had comprehensively lost every argument," he said. "Leeds agreed to accept 15 points as a condition of playing in League One. They signed the agreement, gave their word, then immediately reneged on it. The arbitration panel were singularly unimpressed with Leeds' behaviour."
The judgment is important beyond the battlements of Elland Road, because it reinforces the League's authority to maintain sanctions for clubs which fail to pay their bills then cut them wholesale when declaring themselves insolvent. Clubs which do that, then fail to exit via a CVA, which requires 75% of creditors to agree, now have as a standard possible sanction the deduction of 25 points - 10 for going into administration, 15 more for failing to agree a CVA. The League argued it did not want the Leeds case to be a binding precedent but Mawhinney acknowledged that 25 points is now "an established fact" and so has set a bar.
In any consideration of the fairness of this, the context has to be remembered. English football, in its greatest boom-time, is leaving millions of pounds unpaid to HM Revenue & Customs, public bodies and utilities, local businesses and, always, St John Ambulance when clubs go bust. The League pointed out that 40 clubs, over half its 72 members, have declared insolvency in recent years. This season Bournemouth, Rotherham and Luton fell into administration and after a sober period following ITV Digital's 2002 collapse, several other clubs' finances are far from pretty.
The League introduced its 10-point automatic penalty for clubs declaring insolvency partly to show that it disapproves and also as a "sporting sanction" so that clubs which cut their debts in this way cannot benefit at the expense of those paying every penny they owe. Many League chairmen who strive to keep their clubs solvent feel vehemently that administration is dishonourable. Several resent Leeds' spending this season on wages and new players - including Neil Kilkenny, signed from Birmingham City for a reported £150,000 - after slashing their debts last summer.
The League's moral compass in negotiating this landscape is skewed by its rule that in any insolvency "football creditors" must be paid in full - meaning, mostly, players' wages to the end of their contracts and transfer fees to other clubs. The League justifies this in terms of "sporting integrity", so that clubs cannot recklessly sign quality players whose wages they cannot realistically afford, then lay them off unpaid when "living the dream" unravels. The rule leads, however, to the deeply unappealing spectacle of multi-millionaire footballers being paid their outlandish salaries in full while "ordinary" creditors must settle for a fraction of what they are owed. In Leeds' administration Danny Mills, who played his final game for the club in May 2003, four years later was still owed £216,667 under his contract and was required to be fully paid. The West Yorkshire Ambulance Service, owed £8,997, was among the creditors whose debts were cut.
The League has survived legal challenges to this rule but understands how appalling it looks. This partly lies behind its insistence that if a club does declare insolvency, it must exit via a CVA agreed by at least 75% of creditors.
The three-man arbitration panel found that when Leeds emerged from a £35m insolvency last summer Bates agreed to the League's imposition of a 15-point penalty, which was in fact lenient because Leeds could have been expelled or relegated to League Two. Leeds agreed in writing to accept the penalty and promised that while they could appeal to the League's clubs, they would not mount a legal action. Mark Taylor, Bates' solicitor, signed the agreement on Leeds' behalf. "Leeds hereby covenants," said the crucial clause, "that it shall not... commence... any proceedings... before any court [or] arbitration body... against [the League]."
The panel hearing Leeds' appeal therefore decided it was being asked to determine proceedings that the club had promised not to bring. In its ruling, the panel wrote: "The case begins and ends with [the agreement]. There is no basis to allow [the club] not to honour that covenant."
Mawhinney, far from resigning, feels wholly vindicated, and the League has been significantly strengthened. The judgment stated that the League did have the right to impose conditions when Leeds failed to agree a company voluntary arrangement (CVA) after going into administration, and that the 15-point penalty was "reasonable and proportionate". On Leeds' conduct in bringing the case, and Bates' comments, Mawhinney was scathing:
"The fact that Ken Bates personalised it on me was a distraction from the fact they had comprehensively lost every argument," he said. "Leeds agreed to accept 15 points as a condition of playing in League One. They signed the agreement, gave their word, then immediately reneged on it. The arbitration panel were singularly unimpressed with Leeds' behaviour."
The judgment is important beyond the battlements of Elland Road, because it reinforces the League's authority to maintain sanctions for clubs which fail to pay their bills then cut them wholesale when declaring themselves insolvent. Clubs which do that, then fail to exit via a CVA, which requires 75% of creditors to agree, now have as a standard possible sanction the deduction of 25 points - 10 for going into administration, 15 more for failing to agree a CVA. The League argued it did not want the Leeds case to be a binding precedent but Mawhinney acknowledged that 25 points is now "an established fact" and so has set a bar.
In any consideration of the fairness of this, the context has to be remembered. English football, in its greatest boom-time, is leaving millions of pounds unpaid to HM Revenue & Customs, public bodies and utilities, local businesses and, always, St John Ambulance when clubs go bust. The League pointed out that 40 clubs, over half its 72 members, have declared insolvency in recent years. This season Bournemouth, Rotherham and Luton fell into administration and after a sober period following ITV Digital's 2002 collapse, several other clubs' finances are far from pretty.
The League introduced its 10-point automatic penalty for clubs declaring insolvency partly to show that it disapproves and also as a "sporting sanction" so that clubs which cut their debts in this way cannot benefit at the expense of those paying every penny they owe. Many League chairmen who strive to keep their clubs solvent feel vehemently that administration is dishonourable. Several resent Leeds' spending this season on wages and new players - including Neil Kilkenny, signed from Birmingham City for a reported £150,000 - after slashing their debts last summer.
The League's moral compass in negotiating this landscape is skewed by its rule that in any insolvency "football creditors" must be paid in full - meaning, mostly, players' wages to the end of their contracts and transfer fees to other clubs. The League justifies this in terms of "sporting integrity", so that clubs cannot recklessly sign quality players whose wages they cannot realistically afford, then lay them off unpaid when "living the dream" unravels. The rule leads, however, to the deeply unappealing spectacle of multi-millionaire footballers being paid their outlandish salaries in full while "ordinary" creditors must settle for a fraction of what they are owed. In Leeds' administration Danny Mills, who played his final game for the club in May 2003, four years later was still owed £216,667 under his contract and was required to be fully paid. The West Yorkshire Ambulance Service, owed £8,997, was among the creditors whose debts were cut.
The League has survived legal challenges to this rule but understands how appalling it looks. This partly lies behind its insistence that if a club does declare insolvency, it must exit via a CVA agreed by at least 75% of creditors.
SkyBlueRuffian
Well-Known Member
Have you quite finished?
deanocity3
New Member
I'm not sure as the FL have played a big part in this, dare they do it or can they use their discretion.
what's in the rules
what's in the rules
saltaire bantam
Well-Known Member
No love, Halifax were not relegated anywhere.
Some interesting facts for Coventry fans regarding Halifax Town AFC. That club went bust, it was liquidated and ceased to exist in 2008 when Halifax were in the Conference. FC Halifax Town was then formed, a new club with a new name, this new club was placed just 4 rungs below the football league. Halifax complained bitterly, they said they were too big and wanted to remain in the Conference, this with crowds of about 1200!
And some think a "new" Coventry would start at the bottom of the pyramid?
FC Halifax Town
Northern Premier League Division One North - 8th - Champions
Northern Premier League Premier Division - Champions
Conference North - Failed in play offs - Promoted
Conference Premier
It took them only 5 seasons to get back to where they started, they now have no debts and higher crowds (winning club and all that) and it could have been done in 3 seasons! They set off the first season in a mess and wasted it, then lost in the play offs when they should have gone up in 2011.
Try telling a Shayman that he supports a different club!
Last edited:
Bill Glazier
Active Member
At least Bates cared what happened to Leeds. In our case Sisu look to be more interested in their own finances than worrying about points deductions. The football club seems to be of no interest to them, other than a vehicle for their property ambitions.
ccfcway
Well-Known Member
honestly wouldnt surprise me if we got inquidated and were not docked any points at all as SISU may threaten to sue FL again. That is of course unless SISU want us to lose the 15 points to get relegated so the rent at Ricoh is now only £100k a year according to latest ACL offer
italiahorse
Well-Known Member
If we are liquidated on Friday it is because SISU have not accepted the extraordinary deal offered by ACL.
If that's the case I don't give a toss anymore.
Crawley will be a farewell to me to the Sky Blues after 36 years.
Cobblers to SISU
Brighton Sky Blue
Well-Known Member
How grossly unfair such a sanction would be on those who the League has failed on an already grand scale.