Leeds face £5m charge if they get back into the Premiership

Leeds will face a heavy bill should they achieve promotion. The Elland Road club will have to pay £5m to the consortium of creditors known as the bondholders on their return to the Premiership.

Their manager Kevin Blackwell has steered Leeds to third place in the Championship, five points clear of fourth-placed Watford with a game in hand. However, promotion would not yield the sort of riches other clubs might enjoy.

More than £60m of debts were restructured following negotiations between the Adulant Force consortium and the bondholders, who are represented by Prudential. Though much of the debt was written off, some was deferred, leading to more payments that are applicable now and in the future.

One such sum, contingent on the Championship club's turnover as detailed in the 2004 accounts, which they have yet to file, is due next month. It is likely to cost Leeds around £1.4m and is an annual payment running to 2008.

Most significant, though, is the £5m payable to the bondholders, who include Metropolitan Life and Teachers, on August 30 of a promotion year. If Leeds fail to secure promotion by May 2009, that £5m sum will then be payable on August 30 of that same year, irrespective of which division they are members.

The penalty for promotion would be further exacerbated by the February payment, which increases to £2.5m with Premiership status. It would also rise contingently to any increase in turnover promotion might provide.

None the less, despite the onerous payments, being in the Premiership would be an important fillip for Leeds and the £30m it is estimated to benefit the promoted clubs would not be entirely swallowed up by a return to the top flight.

One of the individuals engaged by Leeds following the Adulant Force takeover will be sentenced next week after pleading guilty on 11 counts of deception at York crown court. Paul Garland was introduced to the club by Geoffrey Richmond, who acted as a consultant to the Adulant Force consortium.

Garland was paid a consultancy fee of almost £2,000 a month by the club and secured interim funding from the Aston Villa shareholder and property tycoon Jack Petchey.

There is no suggestion that Petchey or any of the members of the Adulant Force consortium acted in any way improperly; indeed Leeds cut their ties with the conman immediately after directors were informed of his wrongdoing by a victim who had been defrauded of more than £160,000.

The Insolvency Service yesterday released a statement clearing the former Leeds chairman Peter Ridsdale and the erstwhile directors Allan Leighton and Stephen Harrison as well as the former non-executive director Richard North of any purposeful wrongdoing in the events that led to the financial collapse of the club.