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Last Updated: Thursday, 9 August 2007, 11:58 GMT 12:58 UK
Leeds lose points penalty appeal
Ken Bates
Chairman Bates believes Leeds did not break any rules
Leeds have lost their appeal against a 15-point deduction for the start of the new season following a breach of the Football League's insolvency policy.

The chairmen of the other 71 Football League clubs voted "overwhelmingly" to sanction Leeds and then again to uphold the original punishment.

In both cases, the outcome was higher than a 75% majority vote.

Leeds chairman Ken Bates had insisted the League One outfit had not broken any rules.

However, he has no option other than to accept the punishment, with League chairman Lord Mawhinney confirming the club had no right to take legal action.

Lord Mawhinney said: "We have an agreement with Leeds, signed by both the League and the club, that they will not take any legal action against us and we will not take any legal action against them.

"That is a standard part of the agreement that every club signs when it comes out of administration.

"That has not been generated for the benefit of Leeds United, we've done that in the last 40 administrations and we did in this one as well."


Leeds manager Dennis Wise was incensed by the Football League's decision.

"It's just not funny at all," said Wise. "We'd like to know deep down the real reasons.

"I'm disappointed with the whole thing. Minus 15 points. We have to get 106 points to win the league, 92 points to get in the play-offs and 70 points to stay up. Lovely. Thank you very much.2

Before the vote, Elland Road supremo Bates had sent a letter to all Football league chairmen, arguing that the punishment was a "breach of natural justice".

It was imposed on 4 August, the same day that Leeds were granted their 'golden share', which allowed them to compete in the Football League this coming season.

The share had been suspended when Leeds went into administration at the end of last season, a decision that automatically incurred a 10-point penalty and thus sealed their relegation from the Championship.

The League want clubs coming out of administration to do so via a company voluntary arrangement (CVA), with football creditors paid in full.

Leeds' creditors originally opted for the club to be sold back to Bates via a CVA.

But HM Revenue and Customs, unhappy at the plans by Bates to pull the club out of administration by paying creditors only eight pence in every 1, mounted a legal challenge.

The matter went to a High Court hearing in Leeds. Preliminary hearings were held on 6 July, with a date set for the full case to be heard in September - sparking fears the club might not start the season.

Administrators KPMG subsequently put the club up for sale.

Bates then bought the club back off KPMG in a deal that could eventually be worth more than 50p in every 1 for creditors.

But the purchase meant that the club had not come out of administration via a CVA - with the League imposing their subsequent 15-point penalty for the breach of policy.

In a statement, Leeds said: "We are amazed by the perverse outcome of Thursday's meeting of Football League clubs.

"The only winner is HMRC and we believe the full ramifications of the decision will adversely affect football going forward for many years.

"The club is considering its options but in the meantime will be concentrating on starting its promotion campaign at Tranmere on Saturday."

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