I think the problem is that Randy Lerner underestimated how hard it was to fill the stadium and increase the revenues at the biggest club in England's second city.
He has missed totally in the revenue side, and thus the wages that he felt were ok to pay out, indeed was too much too handle for the club.
And regarding accounting techincals. Milner was bought for 12 mill, got a 4 year contract and was sold for 26 mill after 2 years. The profit on that deal should be 20 mill. That makes the reported numbers even worse and makes me wonder what the hell is going on.
Depending on the source Milner was sold for 26m or 24m on a cash plus player basis I.e. Ireland who was said to be worth £8m so the cash was 16m or 18m.
Another fantastic deal by our amateur CEO! There are regular references to how much MON wasted. How much has PF wasted? Houllier, McLeish, Ireland - clearing in the woods!