Leeds deal ends local involvement

GUERNSEY-BASED player leasing company Registered European Football Finance should soon cease its ties with debt-ridden Leeds United. The company is due to be paid about £22m. which it was owed by the club whose estimated total debt was more than £100m.

It follows the Yorkshire club's £30m. takeover on Friday by a consortium headed by Gerald Krasner.

National newspaper claims said that some of the creditors, including Reff, had turned up the pressure for the deal to be concluded or the club would be put into administration.

Others were believed to have supported the continuation of Leeds' hand-to-mouth survival until it became clear whether or not the club would be relegated from the Premiership.

National reports claimed that Reff and its German insurance underwriter Gerling, which owns the registration of Australian striker Mark Viduka, pushed for the swifter resolution.

Locally-based Heritage Fiduciaries manages Reff as a client company and has been involved in player-financing deals with Leeds and other clubs. Reff has helped fund the purchase of several players.

Richard Tee, a director of Heritage, confirmed yesterday that after the deal was struck on Friday, creditors were assured that they would receive their money, which had come as a huge relief.

'We faced a very significant loss. That triggered the insurance claim on Gerling which is why it led the negotiations on behalf of Reff,' said Mr Tee.

'The situation has been resolved, which is a good thing for everybody. It has dragged on for a long period of time.

'The money will come from the insurance company and that will end Reff's involvement with Leeds United,' he said.

Money will be paid to the bank, which holds the insurance policy as security, and Gerling will pay off the bank.

'Other creditors had different types of security, which meant they had a different interest in reaching a deal, but all were pressing for a satisfactory conclusion,' said Mr Tee.

'Reff is relieved that this has been resolved. Its bankers will recoup the money it is owed that it lent on player-lease agreements with Leeds Utd.

'It allows Reff to move on and concentrate on its other successful deals.

'As a Leeds supporter myself, I hope the club can resolve the situation on the pitch and stay up. Removing this financial uncertainty has got to help the players and staff,' said Mr Tee.

Contrary to some reports, the takeover did not wipe out the club's debts, although the consortium is thought to have halved the liabilities.

It was claimed that the bondholders who loaned Leeds £60m. had accepted 20p in the pound as an up-front payment but intended to recoup a substantial part of their investment.

A players' wage deferral to help the club's financial plight has now ended.

But Mr Krasner, the new chairman, yesterday refused to say whether high-earning players, such as Viduka, would be sold this summer to reduce the club's salary bill as part of the agreement with the creditors.