Leeds United could be facing another financial crisis in mid-July. Its new owners are understood to have just 120 days to pay back the £15m property entrepreneur Jack Petchey has poured into the troubled club.
A takeover deal was announced on Friday between the club and Adulant, a consortium of Northern businessmen. Mr Petchey - who through his investment vehicle Trefick holds stakes in businesses including Leeds' Premier League rivals Aston Villa - is bankrolling the takeover with a £15m loan.
The money will be used to buy out the US bondholders, who control around £60m of Leeds' £81m debt pile, and the player leasing company Registered European Football Finance. Commitments have been made by Adulant to pay the remaining creditors in full but over a longer period of time. The club owes the Inland Revenue and Customs & Excise around £10m.
Under terms of the deal, however, the £15m loan must be repaid to Mr Petchey in four months. A source close to the club said it was likely the new owners would try to make the repayment by selling players at the end of the season, but added that doubts remained whether the full amount could be raised.
Adulant has not revealed what the loan is secured against, although the consortium has now taken ownership of the Elland Road stadium and the club's Thorpe Arch training ground.
The deal will also see chief executive Trevor Birch leave at the end of the season. Mr Birch confirmed that he would be staying on until then in an advisory capacity but not as a director or in his current role of chief executive.
It is understood that Gerald Krasner, an accountant who acted as Adulant's spokesman, will become chairman. David Richmond, son of Bradford City's former chairman, Geoffrey Richmond, also joins the board as commercial director. Mr Richmond Snr left Bradford with debts of £36m when he quit as chairman after their relegation from the Premiership in 2001.
Meanwhile, Brendan Guilfoyle, a partner at The P&A Partnership, an insolvency specialist, has been appointed to investigate former Leeds directors. These include Royal Mail boss Allan Leighton - who made several attempts to save the club himself - and InterContinental Hotels chief executive Richard North. Leeds' disgraced chairman Peter Ridsdale will also be investigated.
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