Bates defends buy-back deal

The Inland Revenue have appealed to the High Court in a bid to block Bates' plan to regain power at Elland Road, after placing the club in administration in early May with debts of £35million, and a High Court hearing in Leeds on Friday will lay out a timetable for the Inland Revenue's appeal.

Following meetings with administrators KPMG and the Football League, Bates has instructed his lawyers to go on the offensive, and a club statement read: "In view of the HMRC appeal against the CVA, the club has instructed its lawyers and asked the administrators to analyse all parts of the claim with particular reference to the inclusion of protective assessments."

It continued: "One of the protective assessments relates to the club reclaiming VAT charged by football agents for services provided, which was included in the HMRC's £7.7m claim."

Bates won a vote by the slimmest of margins to pay off the club's debts of £35million at 1p in the pound at a creditors' meeting on June 4.

Bates later increased his Company Voluntary Agreement (CVA) offer to 8p in the pound in a last-ditch attempt to appease furious Inland Revenue officials, who were set to receive just £77,000 under the initial terms.

But an improved settlement of £600,000 was not enough to stop the Inland Revenue lodging an appeal in the High Court.

One of several options now available to administrators KPMG would be, with the High Court's approval, to scrap Bates' CVA proposal and buy back the club for £1 before selling it on to the highest bidder.

It is understood the accepted bid could be sanctioned by the High Court and the Football League without the need for a creditors' vote.

That has alerted two rival parties who have stepped up their bids to take control of Leeds as Bates' buy-back deal hangs in the balance.