David Low spoke to SFM today about the latest focus on Rangers Oldco, but thinks that Dave King’s words about Oldco being the real Rangers matters less to King than the increasingly improving health of the Oldco, now in liquidation.
In the last week it has emerged that HMRC may have lost their appeal against the improper use of EBTs, and that coupled with Dave King’s £20m claim being thrown out, has reduced liabilities so dramatically that Oldco could be solvent – especially if the asset sale from Oldco to Sevco Scotland is overturned as a consequence of current criminal proceedings involving all parties to that sale.
Low says that Rangers cannot possibly raise public investment for Newco whilst that uncertainty surrounding the assets is resolved.
“Nobody will put money into a business whose main assets are under dispute, and if they tried to raise funds in a prospectus, they would have to declare that nature of the dispute”
But the single most important aspect of the new developments?
“Everything depends on the criminal case outcome” says Low, who also observed that King is not alone in his repositioning with respect to Oldco.
The Worthington Group, of which Craig Whyte is a former director, have recently sprung to life and filed three years of returns. They have also made a claim to Rangers’ liquidators, BDO, that they hold a floating charge over the assets (currently around £20m net in cash) held in the current creditors’ pot.
“They also just appointed a new corporate director, Liberty Corporate – a name associated with Whyte”.
Low thinks that criminal proceedings and litigation could drag on for a number of years until the uncertainty over asset ownership is resolved. He thinks that this will critically impair Newco’s ability to raise funds for that period of time, but that improvements on the field will take the pressure of King in the meantime.
“At the end of the day, fans are only interested in what happens on the field.” says Low; “Rangers have a good manager, they are playing well and winning consistently. The fans will be happy with that”
Is it possible that TRFC have not repaid Mike Ashley because potentially there may not be any assets in Ashley’s ownership? In any case, even for Rangers to limp on with soft loans (which he says are the only funding options available), they need to try to put an end to the factional disputes which continue to plague the company.
“Peace needs to break out. There is no consensus, nobody is in control, so there is no way forward at boardroom level”
“The directors find themselves in the situation where they either continue to drip feed the club out of their own pockets, or face the alternative which is far more unpleasant.”
Curiously, Low gives the SFA a pass on their handling of the situation, and feels they were in an impossible position. That is not something that fits in with our consensus on SFM, and in fact the next blog, which will be published later this week, focuses on one of the SFA’s many dysfunctional episodes – their inability to scrupulously apply the rules and carry out their obligation to UEFA.
The podcast will be on iTunes, on our rss feed , and on the web here
Can someone show me the numbers which make Rangers (IL) close to being solvent.
Yes BDO have brought in a lot of money , but they have also taken a load in fees (from memory something in the region of £5m, not just to BDO total expenses) and even if some of the debt has been removed it’s probably still quite a sum. For example.
HM Revenue & Customs £14,372,042
Debenture Holders (various) £7,736,000
Thomas Cook Sport, Manchester £129,216.56
Murray Group Holdings, Edinburgh £278,964.30
The Premier Property Group, Edinburgh £103,210.96 (Note – A Murray Company?)
That’s only a few and it’s ignoring Ticketus, who I believe still have a live claim of around £27m.
If as is being claimed Rangers (IL) are currently solvent then I don’t think it can be by very much and it’s currently being spent at about £150,000 a month actually carrying out the liquidation.
Sorry if I am missing something obvious but I just don’t see Rangers (IL) as being close to solvent. If they were then they would be talking about paying off the creditors in full, not about a percentage of debt.
Low’s giving a pass to the SFA/SPL/SFL is probably fair from the narrow perspective of someone involved in football as a business, in a Gerald Ranter fashion.
However, its also why there is so much distrust, and. frankly, loathing of those who run many of our football clubs, by the people who ultimately fund the businesses,by buying tickets, merchandise and watching TV.
Homunculus
The £20m in the pot is net of BDO and other expenses and fees.
I suppose close is a relative term in respect of solvency, but relatively speaking, the Oldco could be in better shape than Newco,, and therefore more desirable. , but with HMRC largely out of the way, it might be better value for King (or someone like him) to invest £10m in a 50/60p in the pound settlement to Oldco creditors and apply for a sisting. This is based on the (expected) reduced HMRC liability and the inclusion of Ticketus (£27m) which would make the total creditor bill around £60m. So a better dal for existing creditors is achievable.
Of course he would have to hope that the Worthington claim is rejected, and that he could get the old CW stake relatively cheaply.
Lots of ifs and buts and maybes, but if the assets are repatriated, he would have little choice, unless you subscribe to the (plausible but in my view unlikely) John James scenario that a new stadium is on the agenda).
No choice because if the criminal case proves that the sale was not kosher, then King is left with 19% of a licence to play football – and nothing else.
Homunculus 21st September 2015 at 3:47 pm #
The Premier Property Group, Edinburgh £103,210.96 (Note – A Murray Company?)
=========================
Indeed it was: currently in liquidation.
SDM is back in the property game, though.
Apologies for the DR link. It seems quite detailed (for them!).
http://www.dailyrecord.co.uk/business/business-news/exclusive-sir-david-murray-director-4991621
Big Pink 21st September 2015 at 4:06 pm #
And why would HMRC, who chose BDO and who sit on the liquidation committee, and who rejected the CVA in the first place accept 50p or 60p in the pound.
I’m sorry but that makes no sense to me, unless what you are saying is that they could be forced to take that. Who would force this deal on them, presumably it would have to be BDO or the Court.
It is probably worth recapping on the current financial status of the Oldco in BDO’s hands from the last report to Creditors.
As at the end of the last reporting period (30 April 2015) the balance of Cash held by BDO stood at £18.77M.
The bulk of that money came from a damages claim against Collyer Bristow that was settled by their insurers for a total of £24M. The costs associated with that settlement were substantial with a £5.4M windfall going to Stephenson Harwood, the solicitors who were employed by BDO on a no win no fee basis.
BDO also received £550,000 as part of a “Funds Settlement” of a £3.8M cash pile held in a Collyer Bristow client account. BDO paid out £86,500 to HMRC as part of this settlement in keeping with a prior arrangement. This cash pot was also subject to multiple other claims including the Jerome Pension fund which had connections with Craig Whyte via the Worthington Group.
Other legal costs associated with the liquidation process continue to accumulate (e.g. the EBT appeal). The running total of legal costs currently stands at £6.6M.
BDO’s own costs for the 30 month period of liquidation from the end of Oct 2012 to the end of April 2015 is £2.61M, and continues to increase at around £60K a month.
The Total Creditors claim was £169M, although if the major part of the EBT case (£72M) and Dave King’s spurious claim (£20M) are discounted, then the outstanding amount due is down to £77M. This figure may increase if the reconvened FTT make determinations on the amount of Tax due from the EBT cases (5) where liability was admitted, or should other EBT termination payments (35) be deemed taxable.
The Podcast makes reference to other potential sources of money or assets coming to Oldco. Only the courts will determine where the assets end up or if further damages claims are possible.
The only certainty is that a final resolution is several years down the road and that the lawyers will be a major beneficiary.
easyJambo 21st September 2015 at 4:28 pm #
The only certainty is the a final resolution is several years down the road and that the lawyers will be a major beneficiary.
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By Dickens, it sounds awfully like Jarndyce v Jarndyce. It’s a bleak prospect.
Would it not be down to the unsecured Creditors to vote on a revised CVA IF (BIG IF) the Liquidation was halted.
As BP says ther are several elephants in the room on the ifs. HMRC may not have lost the appeal and even if they have will almost certainly take it higher. There are also those that the Upper Tribunal referred back to the FTTT. Then there is who still owns the shares in the being liquidated company. Did Whyte sell to Green, someone else or retain. Then there are the criminal proceedings which may or may not untangle who actually owns the assets.
Currently DK’s family TRUST does risk holding 17% of a licence to play football but keeping that going until there is a lot more clarity is going to be a struggle but performing a switcheroo back to Wavetower is even more risky at the moment given the know unknowns let alone the unkown unkowns.
If Mike Ashley suspects that his £5m secured loan might in fact not be secured at all, would he be more likely to ask for it to be paid back rather sharpish?
@Jungle Jim yep although he might have difficulty obtaining it given the AIM announcement said no repayment date was set. Of course if he could prove to a court that RIFC/TRFC are in default of one or more conditions of the loan
Haven’t given it much thought, but what would happen to the newco/newoldco debts if ‘the club’ moved back to old oldco? Sevco would become a company with no assets but plenty of debt. Or would the debt move to RFC (out of liquidation)? Surely that wouldn’t be the Rangers’ way (not to shed debt).
In addition, should, as anticipated, HMRC lose their appeal, but then be given leave to appeal further, wouldn’t it put the kybosh on the whole plan, as the uncertainty would make it unworkable?
In the meantime, until all the uncertainty is resolved, the current incarnation must limp along growing debt, with an uncertain future.
Sorry David, but i have to disagree with the assertion that the SFA were in a difficult place. There is nothing difficult about applying the rules.
Rules, that as a governing body they are tasked to implement and enforce. They proved not up to the task.
For whatever reasons, they deemed that Rangers(I.L.) MUST live on. A blind eye was turned to their sins and it was intended that we should never find out about them.
Well we did !
I would suggest that the SFA were fully up to speed with what was happening, and they eased the facilitation of it using methods best described by the very honourable Turnbull Hutton on the steps of Hampden.
The Pinsent Mason whitewash, and LNS are perfect examples of where they clearly had opportunities to, “Do the right thing”, and right some wrongs. Instead they threw in some more wrongs for good measure.
As for the awarding of a money spinning Euro playing license prior to administration, for which answers are still not forthcoming, and the reek only gets smokier and smellier.
Sorry David, but the SFA only had to apply the rules. Probably the first words on their individual contracts. They failed, and did so spectacularly.
The SFA hold as much culpability as to how things now stand, as the spivs, who would have walked away if there was nothing in it for them.
The bottom line is, everything that has happened, has happened with an SFA rubber stamp on it. They struck covert deals, and only time will tell if it was criminals they were striking deals with.
They are not out of the woods by a long chalk.
Big Pink, sorry to clutter up the blog with this, but this is the first I’ve managed to get on the site for days.
The home page comes up, very quickly followed by
an advert for the Perth meeting which takes over and leaving no options. If I click on the PM link, the Perth thing comes right back!
The only reason I got on was I was ready to click the ‘Blog’ link before the Perth thing got a chance – it’s fast!
In the mean time, I will keep this window open until I
hear from you as obviously I can’t read the PM you sent me. Thanks in advance.
There’s been some pretty good analysis of the thrust of David Low’s observations.
We understand that it is legally possible for a Liquidation to be sisted. We have been told, however, that it is very rare.
And there seems to be nothing immediately available to give us any indication of what it must take to satisfy the Courts.
I expect that they would have to balance a ‘better deal’ for the creditors against opening the flood-gates to any kind of future chancers who might find it convenient to go for voluntary liquidation from the off, escape the bulk of their debt, and then hope to ingratiate themselves and get the liquidation cancelled by offering some repayment to creditors of an amount short of the full whacks due.
From that perspective, I would imagine that the Courts would insist at the very least on full pound for pound repayment to all creditors.
The first duty of the Courts, is to ensure that the overall purpose of laws regulating business and commerce is served, rather than that any particular set of creditors or failed club is looked after.
Sisting of Liquidation blows a hole in attempts to prevent fly-by-night chisellers and shysters destroying legitimate business activity by removing penalties for malfeasance or whatever.
While, therefore, it may be legally possible, I suspect that the rarity of it indicates that the Courts are not at all happy to grant it except in the most extraordinary circumstances.
Now, some people might be tempted to suggest that the Scottish courts would very readily accept that any matter touching on the RFC liquidation would have ‘extraordinary circumstances’ that should of course be recognised.
I couldn’t possibly comment.
John Clark 21st September 2015 at 6:56 pm
A Scottish judge in a Scottish Court, finding against a Scottish institution. Not going to happen.
I posted this in the last thread, I think it still holds good.
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If Dave King did manage to come up with tens of millions of pounds and pay off Rangers debts, then manage to convince the World that it should not be liquidated after all and have the club resurrected who would actually own it. Would it be the original shareholders.
If he then decided to “move the assets” back to Rangers from Sevco who would have to agree to that and how much would they charge for said assets. Would it be the £5m they paid originally, the £25m based on the release of negative goodwill, what they are valued at in the books or would they have an independent valuation done. It’s not like the current shareholders (Mike Ashley and the Easadales for example) would just want to give them away and fold the business they own substantial percentages of.
Does Dave King genuinely believe that owning 16% of Sevco means that he can just do what he wants with that company and with Rangers. That he can resurrect Rangers, take that away from the shareholders who owned it when it went into liquidation and transfer the assets from Sevco into that club.
Howdy. This is all very confusing. So, if they manage to resurect the club that’s currently undergoing liquidation and then continue on as before, then where does the current team fit in to the “same Rangers” thingy ? What happens to Sevco? Will they just scrap it and the old club just carry on as if nothing happened? Does there need to be another transfer of football licences?
AJ @ 5.29
Re the growing debt issue. Another way to look at it of course is if the SFA are to invent the reverse gear then this a perfect reason why no bank should be offering any support to any club at present unless they’re fully secured.
Of course you won’t see it reported like that!
Interesting podcast with lots of “ifs” and “ands” but it does help identify what they are.
Two things at the tail end:
I thought a year out made sense at the time. I recognised the unlikelihood of that happening but I think that when entering grief from loss you don’t rush into anything.
I know David Low was speaking personally when he says he saw nothing wrong with the SFA handing of the situation.
Now I’m a fan who does understand that the game could not afford to lose so many supporters and the associated finance and never expected RFC to disappear, but, and this is where I differ personally, I’m not making any money out of the business of football.
Quite the reverse, like all supporters we are putting our money into the game and do so on the basis that it is a sport governed by rules on and off the park that means what we are paying to watch is an even handed competition as is possible to achieve, where the parties are playing to the same rules.
When a ref does not give a stonewall penalty I don’t want to think it is to save the bacon (thought Id mention it) of the team that benefitted from his decision.
I don’t want a return to the days when to quote Craig Levein “Its all about Rangers” after the most one sided display of refereeing I’ve seen in my life.
What bugs me is what has changed? What has been put in place to assure the paying customer that from now on every club will get the same treatment at all levels from the governing body? (BP might have more on that later).
Its the kind of thinking that all that matters is the business and supporters will accept anything because of emotional attachments that created the SFA “solution”.
The veil the game depended on, that is the trust placed in those playing it and governing it, for its credibility as a sport, where sport determined the outcome and not politics or money, has been ripped away.
Rangers just did not special treatment after liquidation, they got it in the run up in the final year before (2011) for sure (and perhaps more) before they entered administration. What happened after that was the SFA protecting themselves from their own failings.
Now either all clubs were happy with this “protection” in which case they have been misleading their supporters about the true nature of the game, or only a few knew and were determined to prevent what did happen from happening using CL money to bankroll Rangers out of the debt they entered to get the CL money to pay for it.
We must remember, and it will happen again if another fudge is attempted, that is was supporters reminding their clubs that they would not stand for what the SFA originally attempted to have a Continuity Rangers that stopped it.
That it should have been necessary to do that tells us of the contempt the football authorities have for supporters in even considering it as a way forward.
Should they have spelled out the business case for keeping RFC on? Damn right they should, it would have got the same thumbs down as the route they attempted, but at least they would haver been honest.
Its not just peace that needs to break out locally at Ibrox, its trust and honesty that needs to infect a game bereft of both.
I saw a blog by Phil suggesting the repair bill at Ibrox is substantial
http://www.philmacgiollabhain.ie/the-big-house-and-the-price-of-dignity/
Its an update on an earlier article and whatever the cost of repair there is no doubt Ibrox is a dilapidated stadium.
I was wondering though in the context of assets? Is it, whoever owns it?
Must say I really enjoyed the Podcast.
Thanks to David Low and BP for doing it.
The sad thing is that it takes 2 guys, who are not Rangers fans, to actually take the time to look at and discuss the issues, sensibly and make a great sounding show from that.
That’s something that Rangers should be taking a lead from.
Not me, obv, as I don’t even have a face for the Podcast 🙂
What I’m trying to get my head around from the podcast is: is Dave King saying that had the creditors then been the possible creditors now (i.e HMRC and DK taken out) liquidation would not have been voted for then?
I forget the tipping point on the vote 75%/25% ? and which way?
Does the money from the insurance also reduce the debt so that if we were to turn back time the level of debt would have been such that a CVA would have got a vote rather than failing?
Then there is the £18m taken from Ticketus to pay LSB, do they not become a creditor?
Murray could not sell RFC before the BTC so does there possible removal make them more sellable?
RFC were a viable business if ran on a sustainable basis, still would be but they would not be The Rangers so loved by their support and media in their days of living high on the hog.
😉
Interesting suggestion…that DCK could, depending on the level of debt, try and bring the dead club in liquidation back to life…
However that would also require a new licence from the SFA…or a transfer of licence…to the club that is being liquidated by BDO and who no longer have a licence to play football…it would also require the club in liquidation applying for membership…and subsequently having to start if granted entry in division 3, if they can meet the conditions as laid down by the SFA such as 3 years audited accounts…oh hang on wait a minute…
Auldheid 21st September 2015 at 11:25 pm
I don’t think he is saying that Auldheid. Of course we don’t actually know because DL is like us unsure of King’s reasoning. Certainly in DL’s opinion, someone with £10m to invest would have a better chance of success with Oldco that Newco IF (and only if) the premise with regard to HMRC is correct – and the assets are repatriated.
My inference from what David said – and he will correct me if I am wrong – is that given the uncertainty surrounding the validity of the asset sale in 2012, King is covering all bases. The problem for King is that he is not in pole position unless he can get hold of the CW 85% shareholding, which is held (we think) by Worthington.
Not much been said today about the appointment of Liberty Corporate to the Worthington board. On the face of it, it looks as though Whyte is still very much in the mix.
The King claim being kicked into touch, alongside the uncertainty surrounding Ticketus and the HMRC appeal rumours have seen a few people crawling out of the woodwork.
My take is that King is completely washed up at Rangers if that court case doesn’t result in TRFC retaining the assets – and even then, he might run out of time and/or money before there is a resolution.
In those circumstances, doing nothing is not an option, so the sisting idea, whilst perhaps unlikely, is not impossible – which is what his position is if either scenario in the previous paragraph plays out.
There are a lot of ifs, buts and maybes in this recent twist and nobody really knows where it will end up but I wonder if someone has been watching the Avatar movie which Film 4 broadcast this evening. There is a scene at the end where the psyche of a crippled soldier is subsumed into the body of a large blue alien. Life may yet imitate art but only time will tell.
Paulmac2 21st September 2015 at 11:54 pm
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If it was possible to bring back the Oldco from the dead, the least problematical way of doing it would be to have it as a subsidiary of RIFC.
With both TRFC and RFC 2012 under its control, the memberships and shares could be transferred in a solvent reconstruction (as permitted under SFA articles), then we might see TRFC crashed and burned along with any remaining creditors.
Auldheid 21st September 2015 at 11:25 pm #
What I’m trying to get my head around from the podcast is: is Dave King saying that had the creditors then been the possible creditors now (i.e HMRC and DK taken out) liquidation would not have been voted for then?
I forget the tipping point on the vote 75%/25% ? and which way?
=======================
The total of the Creditors’ claims was £169M. If you remove the Big Tax Case (£72M) and DK (£20M), then you are left with £77M.
HMRC’s other claims (VAT, PAYE NIC & the Wee Tax Case) would still amount to £22M, which would still be enough to block a CVA (29%), if they were so minded.
Ticketus with a claim of £27M (35%) would also be in a position to block a CVA, although they voted for one first time round.
It seems to me that the chances of the assets returning to oldco are vanishingly small.
With the exception of Ibrox itself, everything else is held, or acts as security for, Mike Ashley’s loan.
Unless Mike was shown to be a party to a deception that led to Sevco Scotland obtaining the assets undervalue, his position seems to be quite secure.
Even if others are ultimately found guilty of such an offence (and we must presume that all parties are innocent) I cannot see a method by which those assets that Mike has a current interest in, can be returned to oldco.
No-one is suggesting that Mike is about to receive a visit from Police Scotland.
On another point. The oldco CVA was presented to creditors on the basis that Charles Green had purchased CW’s 85% shareholding in oldco. If Mr Green does not own these shares (or at least owned them at the time of the CVA) it is difficult to see how that CVA was anything other than a sham.
On that basis, I would have to assume that 85% of a resurrected oldco would belong to Mr Green.
We know that Mr Green and Mr Ashley have worked well in the past. Perhaps they will get the chance to work together again. 😎 💡
easyJambo 22nd September 2015 at 12:49 am #
‘..If it was possible to bring back the Oldco from the dead, the least problematical way of doing it would be to have it as a subsidiary of RIFC. ‘
______
Yes, but how would the Board of RIFC actually get its hands on RFC(IL)? Who would they buy it from-are the directors of RFC when it was liquidated still in office, and able to sell the club to a buyer who clears the debts?And the debenture holders and other shareholders would need to be involved?
Certainly, if RIFC did get ownership and if they actually own TRFC and the assets, then they could terminate TRFC’s membership of the SPFL (giving two full seasons notice), and ‘hope’ to persuade the SPFL to transfer the TRFC share to RFC.
I’m pretty sure not too many obstacles would be put in their way by the SPFL or, when it came to SFA membership, by that rotten body.
HirsutePursuit
Re Ashley’s standing – of course litigation would ensue over ownership of assets if the original sale to Sevco Scotland was found to be invalid. My understanding from talking to David Low is that in that case, the current board had no title to the assets so couldn’t assign the as security.
The analogy he used was that if someone stole his BMW and I bought it off the guy who stole it. I would be bound to hand the car back to the person from whom it was stolen.
My only remedy would be to sue the person who stole it, although I suspect if I had deep enough pockets I might be able to get a lawyer to argue otherwise. In the Rangers case that is bound to happen – another reason why this could take ten years to clear up.
Seems fairly intuitive to me, but am happy to be corrected.
Big Pink 21st September 2015 at 11:58 pm #
The King claim being kicked into touch, alongside the uncertainty surrounding Ticketus and the HMRC appeal rumours have seen a few people crawling out of the woodwork.
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The HMRC appeal rumours came from a Rangers fans organisation close to the current board. An organisation apoplectic at what they perceive to be leaks by HMRC re Rangers tax affairs over the past few years. Apoplectic to the point they want sackings and court cases. Yet it seems it’s okay for leaks to happen (from whoever) when it suits them. The HMRC latest appeal is not yet in the public domain, yet an organisation not exactly controlled by pillars of society firmly believe they know the result. If their source proves correct, I do think the authorities in this country should be more careful when choosing their friends.
Personally if HMRC lose and this has to finally get out of Scotland to the Supreme Court it is what I have envisaged all along. Perhaps HMRC suspected the same all along, who knows!
Big Pink 22nd September 2015 at 2:30 am #
HirsutePursuit
Re Ashley’s standing – of course litigation would ensue over ownership of assets if the original sale to Sevco Scotland was found to be invalid. My understanding from talking to David Low is that in that case, the current board had no title to the assets so couldn’t assign the as security.
The analogy he used was that if someone stole his BMW and I bought it off the guy who stole it. I would be bound to hand the car back to the person from whom it was stolen.
My only remedy would be to sue the person who stole it, although I suspect if I had deep enough pockets I might be able to get a lawyer to argue otherwise. In the Rangers case that is bound to happen – another reason why this could take ten years to clear up.
Seems fairly intuitive to me, but am happy to be corrected.
__________
A couple of weeks ago a very occassional poster, with an apparent legal background, posted that the ‘stolen car’ scenario is not pertinent to the ‘Rangers’ situation as an ‘innocent purchaser’ of heritable property can receive full title even in the event of an earlier fraud. He suggested, in the event that the acquisition of the assets is found to be fraudulent, that TRFC’s title might be upheld by a court, though perhaps many years of litigation might be required.
He agreed, though, with my assertion that, as TRFC are, in fact, one and the same as Sevco, the original beneficiary/perpetrator of any possible wrongdoing, that that loophole might not exist, though it could take many years of legal argument, again, to decide.
If, though, his original point is correct, and I think it is, then MA/SD might well be in the position of ‘innocent party’ and find their security over MP is good (the security over the car park and Edmiston House are not under threat).
Regardless of the outcome, ‘the club’ is going to have to either pay back the £5m, or lose 2 assets and face lengthy litigation over MP.
A bit late to the podcast, but thank you BP & DL.
Crux of it for masel, as a non-financial type, was near the end with the mention of the SFA. I remember at the time fully expecting a one-year pause while fans & backers set about creating a viable newco. The SFA & league bodies push for a newco-same club continuation route basically facilitated this mess.
Treating it as a special case with secret agreements was dodgy then and it stinks now. If they were to be cruel to be kind they’d revoke the licence, even at this late stage, and create a vacuum for proper fans & backers to start again. Of course, they won’t, not unless UEFA, the courts, or financial meltdown bring it about.
AJ
Thanks for that.
I am sure that whatever the view on the stolen car scenario, there are no certainties for anyone here. Like many other matters, it is arguable and adds to uncertainty which is not good from a planning perspective.
I think the headline from the interview is that Rangers as a football club are lumbered with many years of crippling uncertainty, and that a successful future requires some kind of agreement between all the warring parties.
However I missed that post. I have gone back to David with your stolen car point. Update when I get a reply.
Are the Car Park and Edminston Drive “safe”? Yes there is no doubt RIFC purchased them after being created so the seller(s?) definitely had legal title to transfer. However the money used for the purchase was from the proceeds of the IPO. An IPO which in itself may turn out to have fraudulently claimed it was to become a shareholder of the holding company of TRFC/The Club which owned MP and Ibrox as assets. More potential litigation?
The stolen car point is applying a false analogy. The state guarantee in the land registration system is being updated as we speak to reduce what the SLC called “impenetrable complexity” particularly in cases of fraud and other lack of good faith. Uncertainty upon uncertainty never leads to quick resolution of issues. Adding in switcheroos, dissembling, occult recordings to colourful back stories and it all starts to sound like a hybridisation of the Lincoln Lawyer and Lincolm Rhyme. Lawyer Rhyme is not poetic or quick or certain or cheap. As the Chinese say of the French Revolution, it is too early to comment.
Definitely under qualified to comment this morning, but its never stopped me before!
I think three points are also pertinent to the oldco resurrecto debate. I flag them up only as points to consider as I’m the first to admit they fit in the box marked “Can’t get head around”
Firstly you must maintain the bigger picture. Oldco’s debt was to all intents and purposes repaid by Ticketus so for those two transactions, again in shorthand for simplicity, Oldco are “as you were” in terms of debt. Then you add in the Insurance payout which makes the Oldco the ripe cherry some say it is. But the flip side of this is that for all Oldco are + 18m following the shenanigans, CW, by virtue of the Ticketus claim against him personally (in itself due to Oldco’s inability to deliver 4 years season tickets) is -24m.
The reason I highlight all of this is simply that none of these parties are going to stand by and watch the miraculous metamorphosis unless they are ‘accommodated’ within it.
Secondly, in all the discussion about the CVA agreement, or lack of, in 2012 you must remember that DCK didn’t see fit to lodge any claim against it I understand. His claim only came once the liquidators were at the door.
And thirdly, the thing is going to stand and fall on the ownership of the shares of Oldco. This is essentially a remix of point one and the parties involved but to which you must then add Ashley by virtue of his securities, Green depending on his status by then, and Whyte who bizarrely almost becomes the default option, something I’m sure Ticketus wouldn’t be disappointed to see happen. Completing the picture that then draws in D&P regarding the 2011 purchase.
This won’t be quick and it won’t be pretty!
g Pink 22nd September 2015 at 9:12 am #
AJ
Thanks for that.
I am sure that whatever the view on the stolen car scenario, there are no certainties for anyone here. Like many other matters, it is arguable and adds to uncertainty which is not good from a planning perspective.
I think the headline from the interview is that Rangers as a football club are lumbered with many years of crippling uncertainty, and that a successful future requires some kind of agreement between all the warring parties.
However I missed that post. I have gone back to David with your stolen car point. Update when I get a reply
_________
Thanks for responding BP. I’ll try to find the posts I referred to and get back to you, sadly I only have my tablety thingy with a poor wifi connection until I get home later, when looking for it will be easier.
Just listened to podcast, if only the professonals were that professional!
It came as no surprise to me that DL sees things from a different perspective than us supporters, always business first and morals afterwards the higher the success story goes, but he certainly sounded honest and open with what he said. Excellent podcast and hearty congratulatons are due.
Clearly the mess is going to get messier, and if it ever gets clearer, there could well be another mess to clean up.
While all these machinations are interesting, stimulating and entertaining, like giving the boaby to a deid pig they are a bit of a distraction from the main issue.
History tells us the old and new club needed at least and extra circa £10m per annum to get to the end of the season.
The current club is in debt to the three bears, King and Ashley with no sign of a pay off or swap for equity being on the horizon.
While there has been cost cutting it does not appear to be at the level of austerity required to balance the books.
The key issue will be how much needs to be stumped up, most likely come January, and who is willing to put up the unsecured cash to see the club to the end of the current season.
Joking apart wottpi, and partisan ribaldry aside this was why I was pleased with the defeats to Motherwell in the play offs.
They will require to address their latest still self inflicted cash crisis from a div1 standpoint (and that’s not to downplay their current excellent progress on the field btw). This is as opposed to mortgaging a no doubt guaranteed euro spot regardless of their table position as would have undoubtedly been reported to be the case had they graced the top division.
Someone made the point earlier that a year out was their best option back in 2012. I genuinely don’t think so, not from the continuity myth point of view. They needed the business as usual pretence to be upheld, regardless of those pesky bampots and their legal niceties.
Big Pink, here is what was said in the short exchange I referred to earlier, I hope it will make the point clearer. Don Dionisio seems to know what he is talking about.
the Don Dionisio says:
Member:
September 3, 2015 at 9:26 pm
With regard to the title to the potentially disputed assets, the general rule of Scots law, in common with many other legal systems, is that the title of a bona fide purchaser for value without notice ( e.g. of fraud or other invalidity or other impropriety) is generally unimpeachable.
It’s a well known exception to the basic rule “nemo dat quod non habet” (i.e no-one can give good title to that which he does not own).
That leaves the party who was duped out of good title (“the dupee”?) to go after the party who committed the fraud generally by way of action for damages, but that won’t generally affect the good title of the purchaser buying in good faith and for value and without notice of impropriety further down the line.
Of course much will ride on the evidence so far as Sevco’s title to the assets is concerned,and that’s likely to be tortuous given that the lawyer for one of the accused has already referred to over a hundred thousand pages of disclosure from the Crown Office and a case bigger and more complex than Lockerbie.
What I would like is some clarity regarding the following points, which really require someone with expert knowledge of Scots law to provide an opinion on.
1) The transfers of both real and intellectual property from the administrators (Duff & Phelps) of RFC (currently in liquidation) to Sevco Scotland Ltd, were properly registered, at the land registry and the IP equivalent, presumably by Scottish solicitors, back in 2012. Is that correct?
2) Ashley has recorded fixed charges over Murray Park, Edmiston House and the Albion Car Park. He has a floating charge over TRFC (to exclude Ibrox). He has temporary ownership of a 25% stake in Rangers Retail, pending repayment of a £5m loan. He also owns all the Intellectual Property of TRFC, again temporarily, subject to repayment of the £5m loan. Is that correct?
3) Let’s assume Ashley has fixed securities properly recorded in good faith (a fair assumption, I feel). If a court then changes the ownership of the secured properties, do the securities survive, or are they extinguished?
4) Can a court really change the ownership of real property, once ownership has been registered? We are talking land, not cars here. Can land be stolen, in the sense that a car can be stolen?
Any clarification would be appreciated.
Just wondering
If a team from the Scottish Championship was to gain promotion,say Hibs,and have debts of 10million GBP and climbing,gained promotion with half their team borrowed from another country ,possibly having to do the same again for the next season,should the SPL not be a tad concerned about allowing a club that runs itself in this way into their competition,the clubs already in this league should also be commenting on such a scenario being allowed to happen
neepheid 22nd September 2015 at 11:53 am #
Neeps, my post above, giving the opinion of the Don Dionoso, might clarify your query somewhat, or, rather, muddy it even further. I think the upshot is that no one knows the answer and it will take many a long year, and millions in legal fees, to reach an answer.
I doubt there has ever been a legal precedent on which to draw sufficient evidence to give a clue as to the eventual outcome, as there are so many tentacles and unknowns involved.
It may well run until, one by one, the parties involved run out of the cash to keep going.
Until the criminal case(s) is concluded, and any appeals heard, the unravelling of ultimate ownership will remain on hold. I think the big question is; can TRFC keep going until ownership of the assets is decided?
Yes, but in terms of priority (in the real world as opposed to the blue room) TRFC have to keep going first and foremost whilst the asset ownership, retail split/debt repayment and oldco conundrum are addressed.
It sounds blatantly obvious but I can’t help feeling there’s more than a few carts leading the race to the line at the moment.
From Rolls Royce to Woolies, they’ve all learned the hard way. Emperors come and go but Cash will always be king (no pun intended).
yourhavingalaugh22nd September 2015 at 12:10 pm
There is no SPL any more, well there is but it has changed it’s name to SPFL and now encompasses all 4 divisions in Scottish senior football rather than just the top 12 in their own seperate league.
This would not be the same as a team moving from the SFL to the SPL where it is moving from one league to the other. All teams are in the same league but different divisions of the league.
So whilst it would still be promotion it is a promotion from one division to the other as opposed to from one league to the other.
If the SPFL were to decide that your hypothetical team was not suitable for the top division then it would really have to also decide that it was not suitable for any of the divisions and remove it entirely from the competition.
Allyjambo 22nd September 2015 at 12:15 pm #
neepheid 22nd September 2015 at 11:53 am #
Neeps, my post above, giving the opinion of the Don Dionoso, might clarify your query somewhat, or, rather, muddy it even further. I think the upshot is that no one knows the answer and it will take many a long year, and millions in legal fees, to reach an answer.
=================
Yes, Ally, my post would have been different if I had seen yours before I pushed the button.
However, I still don’t quite get how the holder of a security over a disputed property is affected. I’m sure Ashley’s legal team know the answer, though, and no doubt he will act accordingly to protect his interests.
His trump card is his control of Rangers Retail, with or without the extra 25% tied to his £5m loan. It seems to me that RR is untouchable, since it postdates the Sevco buyout, and has always been controlled by Ashley’s interests.
As you say, this will be a lawyers’ bonanza for years to come. No outside investor would touch RIFC PLC with a 50 foot bargepole in current circumstances. King and the Three Bears are going to have to contemplate funding this loss-making enterprise indefinitely themselves,together with their “co-investors” of course, with no guarantee that they will be left with anything whatsoever at the end of it all.
In these circumstances, a clean break and a fresh start must surely make a lot more sense. If they could just cut loose from this Ibrox and Murray Park nonsense, start a new company, and ground share with Queens Park for a while, then they would, in my opinion, have a viable business model. The SFA will undoubtedly provide all assistance required, such as licence, membership transfer, etc.
So leave TRFC/RIFC as a dormant group with disputed claims to Ibrox/MP, and start a new company which just plays good football from a rented stadium, funded by Kingco, and see how it flies. If I was a bear that would appeal to me. What’s not to like?
Again being pedantic, I think Ashley holds an additional 26% or Rangers Retail whilst the loans are outstanding. I believe that is significant because with the 49% he actually owns that means he currently holds 75% of the business.
I could be wrong in that, if so my apologies.
It seems to me that to unravel this mess, plod will have to examine dealings from day dot. Then adjust every subsequent transaction to align with what has been deemed the true legal position re ownership. Almost every step will be met with claim and counter-claim.
As such, Craigy’s charges from before Crimbo, will come into play.
If the original £1 sale is unwound, then would it hypothetically be possible that the assets are returned to Minty’s ownership?
I imagine that would alter the nature, and charge definitions in the second batch of arrests.
To top it all off, if asset ownership is decided lies anywhere other than with Sevco……Will an invoice for 4 years back rent be landing at the door with no letterbox?
What a mess. I don’t envy anybody tasked with unraveling this cluster.
The pretendygers may be swinging from the tree-tops at the latest arrests, but would guilty verdicts really benefit the new club?…………..I doubt it.
Will this new club even legally exist if membership was fraudulently acquired and they had no legal right to the stadium
use.
I bet the SFA are beginning to wish they stuck to the rules. Breaking their own rules to advantage alleged crims in an alleged fraud does not look too good.
Corruptofficial @ 3.08pm
Which is why I think the reality will lie between the positions of “path of least resistance” and “he who has the deepest pockets.” Interestingly though football (i.e. the future footballing fortunes of RFC*) doesn’t necessarily have to hold sway in either of those camps (as long as the protagonists can maintain anonymity of course – who are these people?) and indeed could be down-graded not least due to its appetite for ongoing cash from a must have, to a nice to have. And that’s where the biggest danger lies.
Homunculus 22nd September 2015 at 2:28 pm #
Again being pedantic, I think Ashley holds an additional 26% or Rangers Retail whilst the loans are outstanding. I believe that is significant because with the 49% he actually owns that means he currently holds 75% of the business.
I could be wrong in that, if so my apologies.
=====================
The 100 issued Rangers Retail shares are split between 51 “B” shares (held by TRFC) and 49 “A” shares (held by Sports Direct). The “A” shares carry 2 votes each, the “B” shares one vote each.
So in terms of control, SD have 98 votes to 51, even ignoring the extra shares obtained by SD in return for Ashley’s £5m loan. Ashley has RR stitched up like a kipper, and that has been the case since before the IPO. The current share structure was put in place on 27/11/2012, according to Companies House records.
You may well ask how RR was ever shown in audited accounts as a subsidiary of TRFC in such circumstances. I can’t answer that one, but in my amateur opinion, RR should always have been shown as a member of the SD group, since SD have always had voting control.
Corrupt official 22nd September 2015 at 3:08 pm #
…I bet the SFA are beginning to wish they stuck to the rules. Breaking their own rules to advantage alleged crims in an alleged fraud does not look too good.
===========================
Part of me suspects that the SFA/SPL/SFL/SPFL complicity was ensured by some form of a “This’ll never blow back on you” assurance. Be interesting to see how water tight that will prove to be.
Another part of me feels quite sure that their defence (if required) will be of the “We’re just simple servants of the game. We were duped!” variety.
Roll on the next 25 years of legal arguments!
Smugas 22nd September 2015 at 3:18 pm #
Corruptofficial @ 3.08pm
Which is why I think the reality will lie between the positions of “path of least resistance” and “he who has the deepest pockets.”
——————————————————————-
I am not so sure. I imagine the law will only be looking at that….The law, and what was legal/illegal. Bums on seats are not their concern, and should have no influence on how they reach their decision.
Deep pockets may come into play, but in Domino terms, i think all of the players are now sitting “chappin'”, waiting on the dot count to see who will fall, and who remains in the game.
Maybe we could run a Sevco asset ownership sweep. 😆
if c verde in the future is faced with the truth the whole truth and nothing but the truth so help his god will the ‘secret’ 5 way have to remain secret ?
neepheid22nd September 2015 at 3:30 pm
As I understand it the double vote thing relates specifically to “financial matters” however I have no idea what would and wouldn’t consitute “financial matters if a vote were to be called.
The way it stands just now Mike Ashley has a 75% vote for any matter. As we know this is a significant percentage with regards special resolutions.
high beeswax22nd September 2015 at 5:15 pm
I would be surprised if he decides to give evidence. Though may may just be that mad.
In all the predictions on TRFC cash flow there are the unknown unknowns. Like is there any other money keeping the real business running?
http://blog.transparency.org/2015/09/18/football-needs-tough-anti-money-laundering-rules/
The case for tighter controls is unarguable. But would it kill the game?
Homunculus 22nd September 2015 at 5:31 pm #
neepheid22nd September 2015 at 3:30 pm
As I understand it the double vote thing relates specifically to “financial matters” however I have no idea what would and wouldn’t consitute “financial matters if a vote were to be called.
======================
You are of course correct. I’ve just found the document on the CH site.
Like you, I have to wonder what issues would be other than “financial” in this sort of company. I’m sure that getting a definitive answer to that question would keep several lawyers in the manner to which they have become accustomed for quite a while.
Does anyone know how much the parent company charges the club on a monthly basis,after all they’d still have various overheads.
high beeswax 22nd September 2015 at 5:15 pm #
‘….so help his god will the ‘secret’ 5 way have to remain secret ?’
__________
There was, I think, a specific reference in the Agreement to the fact that secrecy had to be absolutely maintained except where disclosure was required by a court of law.
(It has no doubt happened, of course, that witnesses who have been bound by certain non-judicial oaths have been prepared to commit perjury rather than break that other kind of oath)
The thing that sticks in my head.
The bring the old/co back to life
Does TRFC not owe TRIFC £16 mill,
who pays this back to who?
or has it just to be forgoten about? 😕
Jingso.Jimsie 22nd September 2015 at 4:28 pm
“Part of me suspects that the SFA/SPL/SFL/SPFL complicity was ensured by some form of a “This’ll never blow back on you” assurance”
————————————————————————–
I agree 100%, and the Pinsent Mason report is a case in point. No effort was made to uncover the truth by the SFA, but they
were happy with a piece of paper, providing an unasked for version of it. So they put the onus, and trust, on Sevco to provide it.
One cant have too many get out of jail free cards you know. 👿 .
Several days behind with the site, but good to see a new blog and podcast still to listen to.
The only quick, pointless contribution I can think of;
Re: “About Big Pink…” and accompanying photo.
Do you have a dug to go with those shades BP ? 😎
…or are you a ‘Blues Brothers’ fan ?
I think we should be told. :irony:
I have lasted 17 minutes listening to the reincarnation of Brazil 1970 pish on BBC Scotland tv the TV is in danger so no more!
Too slow the tractor boys just scored whit to do….
Cluster One 22nd September 2015 at 7:05 pm #
I think the idea that ‘it’s Rangers’ continues to blind some (many) people to unpalatable accounting details! They seem to forget that not every shareholder of RIFC gives a fffig about TRFC!
Since I first heard mention of the regurgitation of RFC I’ve felt that this rather problematical procedure might, even if it’s workable, have problems getting round the question of, ‘what happens to newco?’ There must be some difficulty in the board assuming they can just turn off the lights of RIFC/TRFC and switch them back on and be RFC.
If they get away with it (assuming the regurgitation works) then they must surely suffer some football penalty, for not to would produce an even more heinous ‘get out of debt free’ scam than the ‘life after liquidation’ one football has already refused to deny and treat according to the laws of the land!
Well we have now seen next seasons premiership main challengers meet a decent side and it has shown just how good Rangers are at present – Not very was the answer. Defence – weak, midfield – work hard but no creativity, forwards – nothing special.
At best they would be bottom half of the premiership.
I thought that the ref had a pretty good game, for once, Didn’t miss much and did not fall from the numerous dives in the St Johnstone box – although he could have booked at least 3 rangers players for diving.
Big Pink –
As I understand it – and I am happy to be corrected – the primary allegations relate to a conspiracy that, if true, defrauded the creditors by failing to achieve full value from the sale of Rangers’ assets.
At the point of sale, the controlling mind of Rangers was that of the administrators. Those administrators are alleged to be part of the conspiracy.
The injured parties – if the allegations are true – are the creditors.
The problem I have with attempting to classify the asset sale as theft -in which case legal title would be in doubt – is that the original owner (Rangers) is alleged to be fully aware of the nature of the transaction.
If consent was given for the transfer of legal title no theft has taken place.
Theft allows restitution of property, fraud only allows damages.
On the other hand, the charge against Mr Green alone – which appears to allege that he acted beyond his power as a director of Sevco 5088 – has the theoretical potential to provide a degree of restitution. The problem is that assets have been used by TRFC to secure loans. As such they appear to be beyond reach. In any case the beneficiary would be Sevco 5088, not RFC plc.
At 9/2 the bookmakers got it all so wrong. They should never have listened to the Level 5 spin
neepheid 22nd September 2015 at 6:15 pm
I would bet you a substantial sum that Mike Ashley’s lawyers, who probably put the deal together could tell you exactly what constitutes “financial matters”.
If I remember correctly Charles Green didn’t see fit to use a lawyer. Like Ally McCoist he may not even have read the contract.
Though to be fair to Charles Green his end was to get Mike Ashley to invest in Sevco pre IPO and get some sort of deal in place. I don’t think he was concerned about the longer term ramifications for the new club. In short a crippling drain on a vital revenue stream.
A happy St J fan
https://pbs.twimg.com/media/CPiLwYNWoAAJ_v7.jpg
Cluster One 22nd September 2015 at 9:21 pm
It really depends how much money they managed to get Rangers supporters to punt.
I don’t imagine a great number of people were putting large sums on the Perth outfit. They may have paid out a few quid to those chaps. It wouldn’t surprise me in the slightest if they collected more from those who punted on the championship outfit.
A good book isn’t about what you pay out, it’s about the difference between what you take in and what you pay out.
An deserved comfortable victory for St Johnstone. Rangers continue to show more fight than they ever did under McCoist. The defence may have been on the team sheet, they weren’t on the park. On this performance the premiership challenge Waeburton will face is avoiding relegation.
The comet turn from the BBC commentary team was an unexpected bonus
HirsutePursuit 22nd September 2015 at 9:20 pm #
‘..As I understand it – and I am happy to be corrected – the primary allegations relate to a conspiracy that, if true, defrauded the creditors by failing to achieve full value from the sale of Rangers’ assets…’
_________
I don’t disagree with your line of thought, or rather I’m not in a position to argue against it!
The information about the nature of the charges against the various individuals has been less than precise as far as I can see, but wasn’t there a question mark over the original sale by SDM to CW? ( Which would imply a conspiracy of many layers).
If so ( and I can’t tell now whether it is merely a creation of my own mind or whether there wasindeed some such question mark), then, if it were to be proven that SDM had been fraudulently ‘duped’ into what he thought (perhaps) was a genuine sale, wouldn’t a question arise as to whether the sale ought to be declared null and void?
and that therefore everything that happened thereafter would have declared null and void- the sale of the assets to ‘Sevco-whichever’, the IPO, and every subsequent operation of RIFC/TRFC including any sporting operation, etc etc etc…….?
On October 16th we should, we hope, find out precisely the nature of the charges against the various presently- innocent- until- proven- guilty individuals.
And guys like me can cease speculating about how far back in time any possible ‘conspiracy’ had begun.
I remember hearing that CG only paid £5.5m for the assets. Like it was mentioned in the podcast, I was astonished at the time. I seem to recall that in the Murray era the value put on Ibrox was phenomenal many x more. My brother pointed out to me that a football stadium’s worth is only worth that much money (if that!) to another football club. Otherwise it’s only worth the land value – less demolition costs.
A few weeks later the assets were (intra?)traded for £25m? Unbelievable.
They just pick numbers out the air according to circumstance.