2007: Administration
Leeds entered voluntary Administration on 4 May 2007, thus incurring a 10 point deduction which confirmed the clubs relegation to League One. . Administration had been predicted for some time, due to crippling debts created during Peter Ridsdale's chairmanship. For his part, Ridsdale denied any of the current situation was his fault, only days after having admitted it was a mistake to allow David O'Leary to spend so lavishly on players. Ken Bates, however, blamed Leeds financial situation firmly on Ridsdale and his board. KPMG were appointed as administrators and within minutes of entering administration sold the club to Leeds United Football Club Limited, owned by Ken Bates, Shaun Harvey and Mark Taylor. On 1 June 2007 75.20% of the creditors voted in favour of Ken Bates' bid. With just minutes remaining of the 28 day period during which creditors could challenge the buyback by Ken Bates, HM Revenue & Customs lodged a formal challenge, and the club was put up for sale again. After due deliberation, on 11 July 2007 KPMG revealed that once again they had chosen Ken Bates' bid.
During the weekend of 21 July 2007, Leeds United fans decorated the statue of Billy Bremner outside the Elland Road stadium with flowers, Leeds United shirts and scarves, and notes bearing messages of support for their team, as uncertainty over the future of the club grew amid legal disputes between owners, football authorities, administrators and HMRC. Certain sections of the press predicted (or even called for) Leeds's expulsion from the Football League, but this was considered a difficult matter for the League, since there had never been any precedent for expelling a club outside of the bottom division.
The league eventually sanctioned the sale to Bates without the club going through a CVA under the "exceptional circumstances rule", but imposed a 15 point deduction due to Leeds not following football league rules on clubs exiting administration. On 31 August 2007 HMRC decided not to pursue their legal challenge any further, accepting Bates' final offer.
Read more about this topic: History Of Leeds United A.F.C.