DEL 2:
Also, you will be aware that Councillor Carter has publicly stated that the Council will not deal with people who are not identified, and he restated this strongly to me, Martin Farrington, and the Chief Executive yesterday. This means that the Club does need to give serious consideration to revealing the names of those people who control the activities of FSF Trust if we are to make any progress.
With regard to Teak Commercial, I appreciate the difficulties which exist here for all of us, but as I pointed out yesterday, the Council will take a view on the level of secrecy surrounding any proposed transactions and this will ultimately dictate whether the Council is willing to be a party to such transactions. The local authority would have to meet its full obligations under any money laundering regulations and this may be a time factor outside of the Council’s control. [Brook to Harvey, 5th April]
Despite these difficulties, the Council do make an informal proposal to Harvey of a potential way forward. The request for a first option to buy Council land is apparently dismissed, but Brook asked Harvey whether the following might be acceptable:
[Harvey agreed to] Seek advice as to whether a 125 year lease of the Stadium (or similar) from the Council would carry sufficient balance sheet value to give the Club the increase in net worth which it desires … annual rent of circa £1.25m, with no upward reviews in the first 25 years … Rent payable by 12 monthly instalments to keep individual payments manageable and also to highlight early any repayment problems … Landlord consent for the redevelopment of the Stadium not to be unreasonably withheld so long as the proposals are within the context of the adopted master plan (and subject to its primary use being for the staging of football matches). Any proposals would, of course, notwithstanding the status of the master plan, be subject to planning. [Brook to Harvey, 5th April]
Harvey seemed doubtful about this proposal, however. He stated that he was reluctant to reveal the owners of FSF, “in view of the way previous information has ended up in media,†but offers:
To alleviate the concern over Forward Sports Fund why don’t we create a mechanism whereby the stadium is purchased by a subsidiary of Leeds United AFC Ltd (linked to our share in the Football League Ltd) over which the council could have ‘a golden share’ so it could prohibit the company from taking any action that prejudices the stadium being used for the long term benefit of football in the city. [Harvey to Brook, 11th April]
With regards to the Stadium ownership, the best Harvey can offer is a letter from LUFC Director Mark Taylor stating that no LUFC Directors have an interest in Teak:
Having spoken with Jacob Adler, with whom the previous Board arranged to sell the stadium and Thorp Arch, he said he would do what he could to confirm that none of the current Board of Leeds United AFC or specifically my Chairman, Ken Bates, had any beneficial interest in that Company. Teak Commercial Ltd have now appointed Hammonds (Birmingham Office) to act on their behalf but upon enquiry failed to confirm or deny who anybody was connected with Teak Commercial Ltd. I do, however, enclose for your attention a letter from the club’s solicitor, Mark Taylor who is also a Director of Leeds United AFC giving you the clarification that nobody connected with the club has an interest in Teak Commercial Ltd. I would be obliged if you can confirm that you are now satisfied with this position. [Harvey to Brook, 27th March]
And Harvey responds specifically to the Council’s offer to buy Elland Road and lease it to LUFC:
I have asked the relevant questions of our advisors to see if this approach would benefit our balance sheet and will revert to you once I have had their response but as you have gathered this would be my least favoured option as I don’t think it will achieve ultimately what I need it to. [Harvey to Brook, 11th April]
This informal offer, and a statement of willingness to meet with the club’s guarantors and the potential £10m investor, was reiterated on 13th April 2007. The lines of communication appear to have gone quiet until 1st May 2007, when Paul Brook was moved to contact Shaun Harvey:
Dear Shaun.
Just a quick word to say how disappointed I am about your Chairman’s latest reported comments about the Council to the media. [Brook to Harvey, 1st May]
The report in question was headlined ‘Chairman Ken attacks ‘media vultures’’, and concluded:
Bates was also highly critical of regional development agency Yorkshire Forward and Leeds City Council, to whom he recently turned for help in a bid to buy back the Elland Road Stadium and Thorp Arch training ground.
Bates added: “We’re disappointed with the lack of support from Yorkshire Forward and from Leeds City Council frankly.
â€But we’ll get there and when we’re back where we belong we will remember those people who didn’t support us.
â€Revenge is a dish best eaten cold.â€
Brook wrote to Harvey:
When recently asked by the Club for a letter of comfort the Council acted quickly to get something to you within 24 hours, and on the issue of repurchase of the stadium we made some proposals to which the Club have not yet fully responded. I therefore feel that the reported comments do not reflect the concern shown by the Council about the Club’s plight. As you know, we will continue to explore ways in which we can help, but any assistance offered will be about preserving top class football in the City rather than being for the benefit of the shareholders.
In the light of the reported comments we will all now be looking over our shoulders and avoiding dark alleys. [Brook to Harvey, 1st May]
We have no record of a response from Shaun Harvey, suggesting that discussions between LUFC and LCC ended with this letter on 1st May. Leeds United entered administration on 4th May 2007.
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