The Times says former Chelsea chairman Bates has sought legal advice about a claim for a loss in payments that his club would have received from Sheffield United. The money, which is thought to total about £500,000, is based on contingency payments written into the contracts of three players - Matthew Kilgallon, Ian Bennett and Rob Hulse - that Leeds had sold to their Yorkshire rivals.
The clauses would have been invoked had Sheffield United avoided relegation from the Premier League in 2007. Bates believes that Sheffield United could now be liable to pay the money after they reached an out-of-court settlement with West Ham United worth about £25million to end the wrangle over the eligibility of the Argentina forward to play for the East London club during the 2006-07 season.
Any potential legal action would not be directed at West Ham.
"We sold a number of players to Sheffield United with contingencies," Bates said. "When they got relegated on the last day of the season we missed out on a substantial sum. That's what we lost and if they are being compensated for their loss, we believe we should be compensated for our loss.
"There are other clubs in the same boat who have similar claims. Ours is the biggest claim and it would be nice to collect that and strengthen our squad. We are currently taking advice on it and won't be commenting further at this time."