Leeds United has been given permission to play in Football League One despite failing to enter into a company voluntary arrangement, as was required by the league.
Adminstrators to the club, from KPMG, will liquidate the old Leeds business and agree payments to its creditors. The Football League has agreed to transfer rights to enter the league to the new Leeds company, however, with a 15-point penalty.
The league had insisted that Leeds should enter into a CVA, according to its insolvency regulations, before the club could take part in the upcoming season.
But, in 'exceptional circumstance', it has let the club play despite a lack of CVA.
The league, in following its priorities of the club continuing to exist, the payment of football creditors in full and the best possible return for other creditors has always insisted this is undertaken through a CVA.
But it acknowledged that in this situation a CVA was not possible.
'This applies only in exceptional circumstances and is at the absolute discretion of the board,' said the league in a statement.
The club has appealed the penalty.
Further reading:
Comments