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Leeds United's new season is in serious doubt today after Ken Bates failed to head off a legal challenge at the city's High Court
An appeal by Her Majesty's Revenue and Customs against the resale of United to Mr Bates and Leeds United Football Club Ltd by administrators KPMG will not be decided until September - three weeks after the opening day of the 2007-08 League One campaign.
A five-day hearing, which is due to begin in Leeds on September 3 will see witnesses from both KPMG and Leeds United called to give evidence, and be cross-examined.
HMRC launched a legal challenge on Tuesday against the Company Voluntary Arrangement (CVA) proposed by Leeds United Football Club Ltd and accepted by the Club's creditors at a meeting on June 1.
HMRC's grounds for appeal are based on procedural matters relating to the way in which KPMG conducted the creditors' vote. The court today ordered KPMG to submit their evidence by August 3, eight days before United start the new League One season against Tranmere Rovers. HMRC must submit their reply to KPMG's evidence no later than August 20.
The case will then be argued during a hearing in Leeds two weeks later.
But barrister Louis Doyle, representing KPMG told the court that HMRC's appeal against the CVA would threaten to prevent United from starting the season.
The proposed take-over by Mr Bates would require the approval of the Football League before United's share in the league is transferred to the new company in charge of Elland Road, Leeds United Football Club Ltd.
The Football League requires clubs in administration to secure a CVA before their share is transferred. The league however recently revealed that they are able to bypass that rule in 'exceptional circumstances'.
But Mr Doyle told the court that the league had informed KPMG that United's circumstances were not considered to be exceptional and a CVA would still be required. Mr 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."
KPMG could decide to scrap the CVA proposed by Mr Bates and Leeds United Football Club Ltd and seek new buyers for United. But Mr Doyle told the court that the search for new buyers would also drag into the new season.
Listing the case for the earliest opportunity the High Court judge, Mr Justice Patten said: "One hopes that Leeds can play football in the coming season but all I can do is get this hearing on as soon as possible."
Leeds United's new season is in serious doubt today after Ken Bates failed to head off a legal challenge at the city's High Court
An appeal by Her Majesty's Revenue and Customs against the resale of United to Mr Bates and Leeds United Football Club Ltd by administrators KPMG will not be decided until September - three weeks after the opening day of the 2007-08 League One campaign.
A five-day hearing, which is due to begin in Leeds on September 3 will see witnesses from both KPMG and Leeds United called to give evidence, and be cross-examined.
HMRC launched a legal challenge on Tuesday against the Company Voluntary Arrangement (CVA) proposed by Leeds United Football Club Ltd and accepted by the Club's creditors at a meeting on June 1.
HMRC's grounds for appeal are based on procedural matters relating to the way in which KPMG conducted the creditors' vote. The court today ordered KPMG to submit their evidence by August 3, eight days before United start the new League One season against Tranmere Rovers. HMRC must submit their reply to KPMG's evidence no later than August 20.
The case will then be argued during a hearing in Leeds two weeks later.
But barrister Louis Doyle, representing KPMG told the court that HMRC's appeal against the CVA would threaten to prevent United from starting the season.
The proposed take-over by Mr Bates would require the approval of the Football League before United's share in the league is transferred to the new company in charge of Elland Road, Leeds United Football Club Ltd.
The Football League requires clubs in administration to secure a CVA before their share is transferred. The league however recently revealed that they are able to bypass that rule in 'exceptional circumstances'.
But Mr Doyle told the court that the league had informed KPMG that United's circumstances were not considered to be exceptional and a CVA would still be required. Mr 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."
KPMG could decide to scrap the CVA proposed by Mr Bates and Leeds United Football Club Ltd and seek new buyers for United. But Mr Doyle told the court that the search for new buyers would also drag into the new season.
Listing the case for the earliest opportunity the High Court judge, Mr Justice Patten said: "One hopes that Leeds can play football in the coming season but all I can do is get this hearing on as soon as possible."