I think there has been an appreciable shift of opinion amongst fans of TRFC recently.
Unlike the ‘invest: speculate to accumulate’ rhetoric featured in the press and by ex-players, the ordinary fans are coming to the realisation that there is no quick fix. There are even murmurings that there may never be a fix which involves their club becoming a competitive force.
Poor management of fan expectations has long been an accusation levelled at the TRFC board by SFM. It is possible though that many fans are beginning to manage their own expectations rather better. There are certainly justifiable criticisms of the manager, Mark Warburton, but alongside that is a realism about the limitations and constraints that he is working under.
There is a rather misguided, and possibly not accurate assumption that another liquidation for a team out of Ibrox would result in having to start ‘yet again’ in the bottom division; but in fact there is a growing acceptance that consolidation in the top league is a much better solution than gambling on huge borrowing simply to stop Celtic adding more notches to the goalpost.
Could it be that the fans are about to do the job that the board haven’t had the balls to do –accept the gap between themselves and (at least) Celtic, and settle for mediocrity on the field as a short term price to pay for continuity?
During the 1990s, in the middle of the Murray/BoS fuelled spending spree, and with Celtic in the doldrums, it seemed to many Celtic fans that their club would never be able to bridge that gap. Of course they did, but at the emotional cost of losing the exclusive 9IAR record.
TRFC now find themselves in pretty much the same position, but their road to bridging the current gap is a more difficult one.
There are similarities of course. Like the Celtic of the 90s, Rangers have major infrastructure challenges to meet. Celtic had a stadium to build, Rangers have Ibrox (and Auchenhowie) to fix and improve. Both required massive investment to improve the team, although I would argue that Rangers have a steeper hill to climb in that area.
Unlike RFC of the 90s, Celtic’s accrued wealth has nothing to do with an intravenous hook-up between their bank account and the chairman’s pals at the bank. Their baseline advantage over the current Rangers predicament is a combination of a stadium which holds 10,000 more fans than Ibrox, no debt, a burgeoning cash balance and the current inflow of European cash.
The Euro cash and the cash balance could be depleted, but the 10,000 extra seats won’t.
It also seems difficult to imagine how TRFC can obtain seed capital – even if they were inclined to gamble – given the combination of barriers to achieving that;
- They have a PLC with no stock market listing
- They have NO executive directors on the PLC board
- The current chairman is a convicted criminal, convicted of offences involving money
- The current chairman and vice-chairman are both directors of a previously liquidated club, and therefore associated with the financial mismanagement which brought that about.
- In that climate, sponsorship deals are hard to come by. Major sponsors want to be associated with stability, success and integrity. TRFC don’t tick many boxes in that regard.
- Banks do not lend to football clubs. Pre Murray/Masterton, football clubs were cash businesses with modest overdraft facilities to cover modest cash-flow peaks and troughs. The banks have returned to that model. 1987-2007 was the exception, not the norm.
- They are at war with a powerful and substantial shareholder in Mike Ashley.
- There is still litigation pending on more than one front which could even call into question the ownership of the club’s assets.
- They are in debt already (estimated at around £15m).
- The current onfield situation may require yet another write-off in terms of contracts.
Any one of those bullet points could be enough to derail any plan to get to the top. In combination, there may even be an existential question to answer.
That is why the fans are starting to look a lot smarter than the board, and ultimately the good sense of the fans may well help the board to find a way out of their current dilemma.
But even with realistic expectations from the supporters, is it possible that they can find a way? Is there for instance someone with a magic wand or bag of cash who could come in and turn it around? Perhaps, but who would risk money on a precarious venture like a football club when one of the most powerful businessmen in the country is in dispute with you?
In order for serious inward investment to happen;
- Ashley has to be reconciled with the board (needs King and Murray to go).
- The debt has to be written off .
- The new investor(s) has to be given control of the club (and this would perhaps require another 75% special resolution where current shareholders would be asked to vote to dilute their own influence).
- If they achieved that (and it is a pretty big if) the new investor cash would go into the club’s bank account – not used to pay off the debt – and they would be free to pursue new and better sponsorship deals, improve the merchandising contract with an onside Ashley, and add new revenue streams.
Even then, any new board would need to see the infrastructure challenges as paramount. Having one eye squinting in the direction of Parkhead will blur the bigger picture.
Their priority should be to reduce the losses (whilst increasing wages for better players), fix the stadium and the training ground (both in need of repair and improvement), build a scouting and youth infrastructure, and free up a (relatively modest) wad of cash to improve the playing squad.
In defence of the current board, the challenges facing them are almost vertical in incline. No matter how skilful they are, nothing other than someone with a barrowload of cash and a very long term outlook can put any kind of fix in place.
£50m might buy the debt and equity, and repair the stadium, but progress requires on-field improvement. It also needs stability, and therefore Ashley’s cooperation. The price of that is the head of Dave King.
Rangers will bring in more at the gate than Aberdeen, Hearts or Hibs, but they have a considerably higher cost base than those clubs. With better players, recurring costs will be even higher – much higher.
To square this circle, however unpalatable it appears to be, peace has to be made with Ashley. That is the key to being able to embark upon a journey that has any chance of success. Otherwise, the clocks will have to be reset to 2022, and the end of the SD contract, before progress can be made.
However there is no chance it can go on that long. Rangers fans may be increasingly less demanding in what they expect, but they will need to see some signs – and not just words – that a plan is in place.
The board are getting ready to throw Mark Warburton to the hounds (the MSM lapdogs have already been armed with poison pens to effect that). This will buy them some time, but not enough.
We’ve said it before, and at the risk of sounding like a broken record, I’ll say it again;
For Rangers to have a fighting chance of competing at the top of football, King needs to be gone. If he does go, half of the barriers preventing the club raising cash are dismantled.
So is King’s departure a price worth paying? If he really had Rangers in his heart, he would say ‘Yes’.
The extent of Celtic’s financial advantage has just been demonstrated with the issue of their interim accounts for the six months to 31 December 2016
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/CCP/13118926.html
Revenue £61.2m
Trading profit £21.4m
Pre-tax profit £18.6m
Cash in the bank £18.6m
They look a fabulous set of figures, boosted of course by CL Group qualification, and some exceptional income to come from future transfer fees should they choose to sell.
JIMBOFEBRUARY 6, 2017 at 16:21
“What to do, what to do!
(Oh for a war chest!)”
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Some fair observations there Jimbo.
You are correct to point out how critical ST sales are, (As they are to every club) However every other club is quite stable as to predictable numbers, and their fans buy, knowing where their club sits in the pecking order, and will have a realistic idea of what they hope to achieve for the season. I don’t mean to be cruel to TRFC fans (it’s just a consequence), but their club is mainly selling a pipe-dream.
After #Goingfor55, even pipe-dreams are in short supply. There is the possibility of Europe, but they will be entering the qualifiers with the squad they have, as the quallies begin before the next window opens. I don’t think I am being unkind, by suggesting that if Euro does happen, it will be a short tenure. A new management team may have to be the price paid for the next dream, with a wedge of ST funds used to pay for his departure.
That doesn’t take any consideration as to what a new management team will cost and demand. The higher up the management tree they go. The higher the costs, and demands made of the board to get them in place.
Having said that, there is some infra-structure in place with wee Stevie in IT, so they may choose to opt for a cheaper route, via an inexperienced “Laptop” manager….
It may actually help them better manage fan expectation (Needs time etc). Getting in a name, but giving him Warb’s old tool-box, will do nothing for them, and may actually make expectation management harder.
It’s hard to tell with events over there, as short-term reactionary decisions seems to be the only constant. It couldn’t be displayed any more starkly than this season’s slogan.
I wonder if it is copyrighted?. Peter Lawell may want to use it in a few years time as a sales drive due to fan boredom setting in.
CO, I’m glad you used the expression ‘expectation’ several times. It’s too easy for fans, of Celtic I have to say, to use ‘entitlement’. That (entitlement) may have been valid some years ago, but hardly now. I lurk on ja606 most days and when they are having a serious discussion the Rangers fans are honest about where they are. The past few years is one of embarrassment, bamboozled, realignment. Sure they wish things could go back to where they were, The Establishment Club, The most successful club in the universe. More money than sense – except they didn’t – but it’s gone.
They perhaps rightly EXPECT to be second because of their wage budget. Last summer they expected to be closer to Celtic in the title chase this season. But the truth is they are not much closer to Celtic than Aberdeen, Hearts or St. J. That’s down to management, on the pitch and off.
The 6 month financial review of Celtic reported above by EJ won’t bring much comfort to any other team in Scotland. But please remember it was achieved honestly. Celtic did not have a blank cheque book from the BOS (in fact they wanted to close us down). And we didn’t cheat the tax man, nor register our players in a fraudulent way. And we didn’t get involved with corruption regarding our integrity to play in Europe.
So although I try to understand the decent Rangers fans’ predicament of the past few years I will never forgive nor forget their management. I am very happy for Celtic’s financial stability.
CORRUPT OFFICIALFEBRUARY 6, 2017 at 19:05 1 Vote
That doesn’t take any consideration as to what a new management team will cost and demand. The higher up the management tree they go. The higher the costs,
Something i tried to touch on the other day. The money it would cost to have MW leave and the money it would cost to get a new management team in. The new management team would still have most of the players MW signed except the loanees who would buy any of these players to generate some income to give the new manager?
The cost to get rid of old manager and get a new manager and some players just to stand still is money they don’t have.And if the ibrox fans don’t buy into it and there is a drop in ST they will be worse off than they are now.Needing bigger loans just to keep going.Even if MW hangs on, how will he survive another defeat at the hands of celtic? the ibrox fans will not stand for it
easyJamboFebruary 6, 2017 at 16:51
‘….and some exceptional income to come from future transfer fees should they choose to sell.’
________
In which connection,the word I hear is that Celtic have been offered £20m for Dembele, and have knocked it back, looking for more, with half a dozen clubs chasing him.
CLUSTER ONEFEBRUARY 6, 2017 at 20:14
Possibly a cup run, or even a result v Celtic may save him, but that only points to what I believe should be the biggest worry for TRFC fans.
Everything the board do is reactionary, and dependent on what happens next week, or next month. and it is always geared to one thing…”Something to keep the fans sweet”. There doesn’t appear to be any long term objective
None of us are really 100% as to how long the loans can continue for, but they do create the impression, that even a couple of thou drop off in sales will have their trousers changing colour.
I believe they will also have a huge decision to make in a few months, and again it will be a decision based not on what they themselves do, but a reaction to what Celtic do.
Celtic may decide to capitalise on the feel-good factor around the club, and raise ST prices. Alternatively they may consider its been a good year, and that there is no need for a raise and decide to stick.
There may be consequences if the TRFC board decide to twist, on what is already an expensive pursuit. Get their pricing wrong, and they may have a mutiny on their hands….Especially if Celtic stick.
It will be interesting to see who announces prices first. In a way, Celtic can pretty much govern what TRFC can, and can’t do. If Celtic stick, or only raise by a modest amount, it could mean more loans outwith the expected budget.
Ps…
If MA wins his case in march and an ibrox board have to pay millions,And i don’t expect MA to take any money due in installments.If MW has not gone by then an ibrox board may not have the funds to pay him off and the ibrox fans could be stuck with him for next season
In retrospect, I apologise to all the other clubs in Scotland who paid their taxes. It wasn’t just Celtic.
Also, nearly most, registered their players at Hampden in the correct manner. Apart maybe for Livingston who made a miniscule error. But who are Livingston? Just a west Lothian club trying their best to establish themselves in a big community. Then get s…t upon by the same b……s who allowed the biggest registration scandal to go unpunished in football world history.
£50m might buy the debt and equity, and repair the stadium, but progress requires on-field improvement. It also needs stability, and therefore Ashley’s cooperation. The price of that is the head of Dave King.
—————————–
But DJ said on the Radio,£16 mill had already been spent upgrading the stadium….
I know. must have missed that news myself.And so must have level5 as they would have pushed that good news by now.Maybe after celtics financial results that £16 mill on repairs squirrel has yet to make an entrance
How refreshingly honest of Ian Bankier to state
“looking forward, and entirely in line with our trading seasonality, we do not expect the same level of financial performance in the second half of 2017”
if only all clubs were as open and honest with their fan base instead of offering promises of moonbeams and jam tomorrow.
Another good blog , BP, and one that gives a glimmer of hope to the bears that their problems might be solved if only they can get rid of their most recent Messiah, or two!
The problem for them, or one of the problems, is that both Messiahs, King and Warburton, are unlikely to just get up and leave with pockets unstuffed with cash, and cash is one thing RIFC doesn’t have. So there has to be someone with mega-bucks waiting to pile the money in, right from the off, and, with the exception of a man who has hung around Ibrox for some time without ever digging deep, Kennedy, there isn’t even a whisper of a ‘maybe, possibly, perhaps’ billionaire emanating from even the most entitled factions of bears.
There is also the assumption that Ashley will get onside if King goes. The way the whole fiasco has panned out over the past five years I’ve constantly half-expected MA to suddenly announce that everything was great between him and TRFC, and that he’s ceased all legal proceedings etc., etc., because we just don’t know how he, or anyone else for that matter, will act. In the same way we don’t know that Ashley is only at war with King (and possibly Murray), or that he would be satisfied to see the back of him (them). The supporters did more than just a little to humiliate him and his business, and no one on the board tried to stop King or instill some sense into the belligerent support, so his fight might acctually be with TRFC, the football club!
It may well be, regardless of who sits on the board, that, at the very least, any mutual solution will require an even more onerous contract in favour of SD! We just don’t know how much of a grudge Ashley bears, or how vindictive he might be.
So, unless there is someone waiting in the wings (and there might be) to bankroll the exit of, at least, King, with Ashley satisfied by his departure, it seems to me that progressing to a sustainable level will just get more and more difficult.
Something I wonder about King, though: is it possible he might use his ever increasing unpopularity as a tool to increase the desperation to depose him, and thus increase the price to do so, so see it as a strategy suitable for a money grabber like himself? What’s more, I am sure the Hong Kong based loans are controlled by King, and that a demand for their repayment would end the club. This might make it difficult, or impossible, for the board to move against him, so, without that multi-millionaire in the wings, King would be there until he gets what he wants.
And what of that millionaire in the wings, is there one? I know people better placed to know than any of us are suggesting there is, but where is this millionaire, or consortium of millionaires? It would surely be better for them to take over the club at the earliest opportunity to stem the haemoraging of cash, if nothing else, and to create an atmosphere conducive to fruitful negotiations with Mike Ashley, before the case goes to court.
Of course, any potential buyers would first have to carry out due dilligence, and I am sure they will want to lift the bonnet, and check the underside of this particular vehicle, properly, before making any offer, but perhaps they already have…
New to site. I notice that the return to uefa competition has raised its head again.
Could someone correct me if I am wrong?
I am led to believe that the first round starts before the next transfer window opens,
however no one mentions that the loan players will have returned to their own clubs by then and an even bigger problem will be that the contracts are now only paid for 48 weeks (I believe this to be true?) so the players will be on unpaid leave just at the time the qualifiers start.
On Mr Ashley for what it is worth, I think he is in a position of being in between a rock and a hard place.
Does he go ahead and win his case in March and allow L5 to call him the reason The Rangers have gone into administration, or does he wait, delay once more, and bide his time for the inevitable to happen. Great site by the way.
Watcher, the first qualifying round is 29th June. Players would need to be registered 10 days prior (19th June) with one late registration allowed – up to 24 hours before the first game. I’m not sure when the 2017 pre-season window opens but it was 9th June in 2016.
EASYJAMBO
FEBRUARY 6, 2017 at 16:51
====================================
EJ, just a tiny point, where you show
“Cash in the bank £18.6m”
I believe that is actually
“Period end net cash at bank of £18.6m”
Maybe someone can confirm if there is a difference, if not apologies for being pedantic. I just thought net cash was cash you had minus associated liabilities. So it would be what was left after allowing for any loans / overdrafts with that bank.
I see John James is having another little jab about how regular the articles are today. Has no-one told him about the podcasts?
Or is he such a purist that only the tightly crafted, written word counts?
I would have thought TRFC and their fans have burned their bridges with Mike Ashley. There is no emotional attachment for MA towards Ibrox and all he has experienced so far is grief. Even when he was loaning them money to keep them afloat, his name was dirt. Why would anyone in their right mind want to go back to that?
I just don’t see it. Besides he has not had his own troubles to seek recently at Sports Direct, I think his mind will be very focused on that just now. He is away out of the road in Southern England, who would wish to come back to the basket case at Ibrox? I’m not sure he came much to Ibrox, if at all? Probably looking after his own safety.
New investors would need to dig very deep. Heaven knows what the sum total would be for paying off the management team, signing a new management team, repaying the ‘soft loans’, buying the shares from existing shareholders. I can’t do the sums but £20-£30 million? And that’s before even thinking about investing in the team. Maybe infrastructure problems to address too.
It’s a big ask. Your talking about an oil sheik’s pockets.
HOMUNCULUSFEBRUARY 7, 2017 at 12:33
The figure quoted, £18.64m is the Net Cash position taking account of outstanding Capital Liabilities which I understand sit at £6.75m. Therefore the Cash in hand and cash equivalents stands at £25.4m.
“I think that there has been an approachable shift of opinion amongst fans of TRFC recently…..”
An insightful summary BP.
I’m actually not that certain we’re seeing anything more than a lull and a realisation that the gap between them and their local bench mark is vast.
But my Blue pals are still optimistically supporting King and think all that is needed is a new manager with the right supporting investment.
And next year will be different………
Your ten bullet points are however all valid.
They will not go away any time soon and because they are all inter related it complicates things even more.
Here are three to add to your summary and I bet there are others to further muddy the pond.
First there is the intensifying internecine civil war among some of the RRM on the board who are definitely not all singing off the same song sheet because the fact is they have quite different, to the point of conflicting, reasons for being there.
Quite simply the guys with money have been, and are being suckered by the guys without – and many have already put in real pound notes (in soft loans) they don’t want to lose that in any triggered collapse.
This conflict is not yet very public or in the full public domain but is now manifest in some conflicting and contradicting stuff in their various tame MSM outlets and the “magic hat” is now becoming a pawn in their squabbles.
Second we have a fan group who now lack the clear and reassuring leadership and spending security blanket they as a community have always craved and required.
They like to be led and have a need to believe in their leaders.
King is undoubtedly failing but still has amazing traction and the fact he is on a financial mission will stop him walking away without gain.
Third will be the outcome of the ongoing failures of the planned option to increase the number of shares to dilute the minorities.
It leaves them with very few options – none of them win-win scenarios.
So confusion, internecine warfare and complicated history.
Unlike many I can’t call what will happen.
It really depends when or if the soft loans dry up.
That could be tomorrow but might be never.
Its been entertaining – we’re nearly 5 years on after the assets purchased by Charlie and his pals have been virtually picked clean.
The only remaining positive assets are their fans loyalty, the sheer number they can call on, the spending this generates, and the inherent needs of the rest of the Scottish clubs to keep them alive and kicking.
The bottom line is its a symbiotic relationship and just like in 2011 – 2012 there will be a Doncaster/Regan et al plan in place for whatever outcome.
That’s just good business.
Scottish football and the Chairmen and their administrators proved they needed Rangers in 2012 and they will do the same again if/when the new club hits the rocks.
theoldcourseFebruary 7, 2017 at 09:21
‘…How refreshingly honest of Ian Bankier to state“looking forward, and entirely in line with our trading seasonality, we do not expect the same level of financial performance in the second half of 2017”.’
_______
Well, it may be only me….
But would it not be even more ‘refreshingly honest’ if the Chairman of a plc explained to the shareholders in detail why the plc seem to have accepted the loss of millions of pounds by not attempting even to question the legitimacy of the granting of a UEFA competition licence to a club that was most manifestly NOT ENTITLED to such a licence?
All of us have to face facts.
We slate SDM as the master cheat of Scottish Football ( and he will never escape from that epithet)
We utterly spit in the eye of the lying, abusers of truth and of Sporting Integrity in our Football Governance
and, it goes without question, we would not deign to give even the matter out of our eyes to the distorters of truth who write about football in the SMSM.
And I ask, simply: what distinguishes Bankier , who lets cheats go unchallenged, at the possible expense of his company’s shareholders,from those cheats whose combined efforts resulted in the death of the club that they were trying to save and the destruction of any belief in the integrity of the sport that the creation of the myth of ‘continuity Rangers’ tried to fabricate.
From a purely ‘Business Pages’ point of view, Bankier has some questions to answer, such as why did Celtic plc did not accept and act upon Res 12?
Bankier is not necessarily any more of a clean potato than any of the other shabby truth-benders in the whole rotten saga.
Celtic plc have to satisfy me and lots of other people that they have some explanation as to why they allowed some millions of moeny to be slid to to an unentitled club.
Hope that’s a typo BP.
FinlochFebruary 7, 2017 at 14:13
Agreed with what you said, Finloch, except for the last paragraph;
“Scottish football and the Chairmen and their administrators proved they needed Rangers in 2012 and they will do the same again if/when the new club hits the rocks.”
I don’t think they ‘proved’ any such thing. They may have believed it, at the time, they may still believe it, or only some may believe it, but if anything was ‘proved’ during the time there was no ‘Rangers’, of any sort, in the top tier, it was that they weren’t needed, and that it was a much more pleasant place to be without them!
No league, of any sort, benefits from a lame duck, in particular a lame duck that remains lame even with more assistance than any other, healthy, duck might expect! If the boards of all the other clubs have been paying attention they might realise that they were misled, deliberately, five years ago, by the men they pay to keep them right, they just might be a bit more enquiring of these executives should there be a next time, and remember that there is much (such as Resolution 12) that they (the executives) refused to answer during the intervening five years. Some might just find that as unacceptable as we do.
I’d suggest that even the board members of Scottish football clubs just might get fed up, one day, of being taken for mugs in an attempt to mollify those who refuse to be mollified.
Cant do linkey things but BBC reporting BDO are going after D&P.
Interesting development.
AJ/Finloch
If you change “proved” to “refused to countenance any suggestion that life without a Rangers was even conceivable; that a life without a Rangers was entirely of their own doing; that a life without a Rangers was a proposition entirely different to a life without the rangers but yet simultaneously felt absolutely no compunction to justify any of that stance in any way shape or form” then I could just about run with it.
Dare I say, you will all find this rather interesting:
“The liquidators of Rangers Football Club plc have launched a multi-million pound legal action against the company’s former administrators. The claim has been lodged by BDO against Paul Clark and David Whitehouse of accountancy firm Duff & Phelps at Edinburgh’s Court of Session. BDO are seeking up to £28.9m following Clark and Whitehouse’s handling of the administration process. Rangers entered administration in February 2012. Four months later, the company’s business and assets were sold to a consortium led by Charles Green for £5.5m. BDO were then appointed as liquidators, and have since conducted a review of the events leading up to administration through to the sale of the assets.’No other option’ In November 2014, BDO agreed a settlement for £24m in a claim against Collyer Bristow, the legal firm that acted for Craig Whyte in his purchase of Rangers Football Club plc from Sir David Murray in May 2011.Those funds were added to the creditors’ pot, as will any monies raised from the legal action against Clark and Whitehouse. In a statement, BDO said: “The joint liquidators, following extensive deliberations with their professional advisors and the liquidation committee, have taken the decision to issue a claim against the former Rangers’ administrators Paul Clark and David Whitehouse, of Duff & Phelps. “During the course of the liquidation, questions have arisen regarding the strategy previously adopted by the former administrators, which have not, to date, been adequately answered.”In seeking clarity, the joint liquidators have been left with no other option but to pursue the matter via the Scottish Court. The joint liquidators look forward to the resolution of this matter.” Criminal charges against Clark and Whitehouse relating to their involvement with Rangers Football Club plc were dropped in June 2016. Duff & Phelps have been approached for comment.”
http://www.bbc.co.uk/news/uk-scotland-glasgow-west-38896812?ns_mchannel=social&ns_campaign=bbc_sportsound&ns_source=twitter&ns_linkname=scotland
SmugasFebruary 7, 2017 at 16:35 Rate This
Cant do linkey things but BBC reporting BDO are going after D&P.
Interesting development.
————————–
Here you go:
The liquidators of Rangers Football Club plc have launched a multi-million pound legal action against the company’s former administrators.
The claim has been lodged by BDO against Paul Clark and David Whitehouse of accountancy firm Duff & Phelps at Edinburgh’s Court of Session.
BDO are seeking up to £28.9m following Clark and Whitehouse’s handling of the administration process.
Rangers entered administration in February 2012.
Four months later, the company’s business and assets were sold to a consortium led by Charles Green for £5.5m.
BDO were then appointed as liquidators, and have since conducted a review of the events leading up to administration through to the sale of the assets.
‘No other option’In November 2014, BDO agreed a settlement for £24m in a claim against Collyer Bristow, the legal firm that acted for Craig Whyte in his purchase of Rangers Football Club plc from Sir David Murray in May 2011.
Those funds were added to the creditors’ pot, as will any monies raised from the legal action against Clark and Whitehouse.
In a statement, BDO said: “The joint liquidators, following extensive deliberations with their professional advisors and the liquidation committee, have taken the decision to issue a claim against the former Rangers’ administrators Paul Clark and David Whitehouse, of Duff & Phelps.
“During the course of the liquidation, questions have arisen regarding the strategy previously adopted by the former administrators, which have not, to date, been adequately answered.
“In seeking clarity, the joint liquidators have been left with no other option but to pursue the matter via the Scottish Court. The joint liquidators look forward to the resolution of this matter.”
Criminal charges against Clark and Whitehouse relating to their involvement with Rangers Football Club plc were dropped in June 2016.
Duff & Phelps have been approached for comment.
http://www.bbc.co.uk/news/uk-scotland-glasgow-west-38896812?utm_source=dlvr.it&utm_medium=twitter
Looks like BDO are opening up another can of worms, though there may be a danger that this is settled ‘out of court’! But I reckon, should it go to court, John Clark, Easyjambo and a whole host of SFMers had better start sharpening lots of pencils and storing lots of legal pads for the case ahead
Interesting that BDO would go after D&P as administrators. That lends itself to considering the value accepted (exclusively) for the basket of assets as opposed to their (D&P’s) involvement over the Whyte takeover (essentially looking at Ticketus’ role). Can’t forget also that it is BDO who have appealed to the supreme court.
Strangerer and strangerer. Meanwhile Ashleys ring fencing chain just got tightened a couple of clicks…
And why does everything seem to add up to £28m in this farrago?
AJ,
Is it normal to cite individuals rather than the vicarious route of taking the company they represented to court? This is indeed an interesting development.
It’s certainly an interesting development that BDO should go after D&P.
You have to remember that the D&P guys had the criminal conspiracy charges against them dropped by Lord Bannatyne. Those charges covered the sale of assets below market value thus depriving creditors, and also enriching themselves.
I was in court when the charges against the D&P guys were dropped (I think JC was there too), and the reasoning was pretty straight forward, so it may be difficult to prove that D&P’s conduct was illegal.
At least it will keep Court of Session Rolls in focus for a few months more.
easyJamboFebruary 7, 2017 at 17:06
Yes, but if they’re solely focussed on the undervaluation of the assets (or tangentially, on Green’s exclusivity clause regarding the assets allowing him to state the price) are they therefore saying the basket was undervalued to the tune of >£20m with a remainder allocated to subsequent interest forgone? And a wee devil in me can’t help wonder if, following Mackenzie’s little club versus Club shenanigans if the player value for those that walked fairly from the club, but apparently unfairly from the Club hasn’t just bobbed to the surface?
ChristyboyFebruary 7, 2017 at 16:58
AJ, Is it normal to cite individuals rather than the vicarious route of taking the company they represented to court? This is indeed an interesting development.
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Not sure, but I’d imagine administrators are held jointly and severally liable for their own, and the company’s, actions. I think the administrators will be partners of the business, as opposed to employees, and so answerable for all their actions. On re=reading the BBC support it does seem to suggest that BDO are not going after Duff and Phelps, but I wouldn’t be surprised if this is an editorial error, for D&P must surely be in a better position to pay out such a massive figure than any two individuals.
I’d imagine all three (or just two) would have to be confident of their defence for this to go all the way to court, but even then, suspect they would all rather settle out of court to prevent their actions being made public. There may well be people not cited who might think it worthwhile helping to finance a settlement, too.
This was at the bottom of the BBC Scotland piece.
BDO added: “The joint liquidators consider that the former joint administrators failed to take actions which would have reduced costs during the administration period and realised additional value from the company’s assets over and above that obtained from the sale of the business and assets to Sevco.”
easyJamboFebruary 7, 2017 at 17:06
It’s certainly an interesting development that BDO should go after D&P.
You have to remember that the D&P guys had the criminal conspiracy charges against them dropped by Lord Bannatyne. Those charges covered the sale of assets below market value thus depriving creditors, and also enriching themselves.
I was in court when the charges against the D&P guys were dropped (I think JC was there too), and the reasoning was pretty straight forward, so it may be difficult to prove that D&P’s conduct was illegal.
At least it will keep Court of Session Rolls in focus for a few months more.
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EJ, There’s been much criticism of the way the police seized evidence against Clark and Whitehouse. I suspect that BDO will have been much more meticulous and proper, and, with the burden of proof being less onerous than in a criminal court, perhaps more confident/capable of success. I very much doubt it will go to court, but if it does, regardless of who wins, a lot of dirt will surely be put into the public domain!
Then, of course, it will not be possible, I’d imagine, to keep any out of court settlement figure secret, as it will appear in the RFC (IL) accounts, so the level of that settlement must surely give an indication of how unsure the defendants were of their ‘innocence’ of any incompetence/impropriety.
Just one of my wee thoughts.
I wonder what, if any, effect this latest court case involving RFC(IL) and Sevco/TRFC might have on any possible new investor in RIFC. Surely, at least until the contents of the indictment are made known, it must put any potential move to buy into the club on hold!
28 million quids worth??? YOIKS.
If there’s a chance of additional millions being repaid to Rangers (IL), is Dave likely to be talking again of reinvigorating the old club and joining it with the new/
It was fun when he talked about doing that after the Collyer Bristow win – the Bears Den was raging at him for even remotely suggesting that there might be two distinct entities!
Re BDO vs D&P
James Doleman estimating a kitty of £40m if BDO successful in their action – is Dave King still on the creditors list with BDO ?
That extra paragraph suggests that BDO thinks that D&P should have emptied out the higher earners like McCoist and Jig early in the admin process and ensured that they got transfer fees for Davis, McGregor, Naismith, Lafferty and co.
Looks like catch-up time to refresh the memories. I think as well as BDO looking in to why players were not sold, before being allowed to walk away for free, They will be looking at this.
The full details of the claims being pursued by BDO will be interesting.
https://scotslawthoughts.wordpress.com/?s=gratuitous+alienation
Nawlite
King going after Oldco only works if the supreme court overturn CoS decision on EBTs and there are free proceeds after creditors are paid – otherwise why bother?
However why would BDO just hand over any free proceeds to King?
Surely the final shareholders of RFC would be entitled to that?
Absolutely EJ,
I think we were all bemused at the way the Administrators were, well, administering. I seem to recall they were even trying to rush through a signing though l can’t remember who .
Christybhoy
Daniel Cousin (sp)
BP @18.06
King argued he was a creditor (to BDO, specicifically not to D&P more or less damning them to liquidation) on account of having been duped by Minty. I thought BDO had chucked it out though, listing him, as you say, as just a shareholder behind the creditors.
I imagine that D&P’s decision not to sell players – and in fact buy some (I think) – during the administration might be at the root of this.
Perhaps the sale of assets is also involved since the burden of proof in criminal cases are greater than in civil cases.
My guess is the rather obvious lack of austerity, save for some deferred salary arrangements may be at the root of it.
EASYJAMBOFEBRUARY 7, 2017 at 17:55
That extra paragraph suggests that BDO thinks that D&P should have emptied out the higher earners like McCoist and Jig early in the admin process and ensured that they got transfer fees for Davis, McGregor, Naismith, Lafferty and co.
=======================
Then again perhaps the plan was to liquidate, with the SFA ensuring the same club charade. Thereafter a promise made of admission straight into the top league. Once there players with a sellable value could be sold and the creditors of the oldco get zilch. For those us use who truly do believe in sporting integrity, the stance taken by fans of all other clubs in 2012 is something we should hold dear forever. I could be wrong but were the rules not changed following 2012 to take a similar event away from a vote by all clubs, and leave the decision to the powers that be? If so, there is no chance of a third Rangers (should it happen) having to start at the bottom.
EJ,
The failure to sell players early in the process – who then walked away for nothing – will most probably highlight, yet again, the contradiction between Doncaster and Reagan’s OCNC posture and their actual administrative approach at the time.
Smugas,
BP @ 18.36
id like to think that if tasked between confirming some off the record deliberations, guidance and blatant unapproved offers with Regan/ Doncaster and stumping up £28.9m that they’d hopefully lean towards the former.
Like you I think it has to be player values. Greens basket of assets was undervalued for sure but not to the tune of £28m.
ALLYJAMBOFEBRUARY 7, 2017 at 16:47 4 Votes
Looks like BDO are opening up another can of worms, though there may be a danger that this is settled ‘out of court’! But I reckon, should it go to court, John Clark, Easyjambo and a whole host of SFMers had better start sharpening lots of pencils and storing lots of legal pads for the case ahead
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Before my mind starts to wander…was it John Clark, Easyjambo or James Doleman who bumped into someone when they left the kinloch and coral case,and they had a little chat.and the guy said look out for something.Does anyone remember who it was and does it have anything to with todays news?
BIG PINKFEBRUARY 7, 2017 at 18:36 2 Votes
EJ,
The failure to sell players early in the process – who then walked away for nothing – will most probably highlight, yet again, the contradiction between Doncaster and Reagan’s OCNC posture and their actual administrative approach at the time.
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could the 5 way agreement have a light shone on it?
STV have the answer to the ‘continuation’ mythology:
“BDO was appointed liquidator of Rangers oldco, which was subsequently renamed RFC 2012 PLC, in October 2012 after an attempt to strike a deal with creditors failed.”
They were “renamed”
It all makes sense now. (in case someone is reading this 200 years in the future, I’m being sarcastic)
JIMBO
FEBRUARY 7, 2017 at 19:23
STV have the answer to the ‘continuation’ mythology:“BDO was appointed liquidator of Rangers oldco, which was subsequently renamed RFC 2012 PLC, in October 2012 after an attempt to strike a deal with creditors failed.”
They were “renamed”
It all makes sense now.
——————————
I think that the STV terminology is accurate. RFC2012 is the corporate entity in liquidation. The Oldco was The Rangers Football Club PLC, which has no connection with Rangers International Football Club PLC (different company number for a start) & its subsidiary, The Rangers Football Club.
Sportsound tonight is pretty predictable fare btw warburton out (actually not out according to Dick Wilson apparently just put on gardening leave which is “perfectly normal”) and McInnes in (Dick Wilson again, “it’s a no brainier for him”). In fact Wilson is so extreme he makes Jackson sound moderate and informed. Which makes me ask the question: has anyone ever seen Neil Patey and Dick Wilson in the same room together? Anyway I digress.
There’s a segment 30 mins in which to be fair Dick Spiers (me bad?) pursues as to why Warburton doesn’t get Rangers. Interesting insights but not in a good way.
A response
Cant help feeling that Mackenzie with his wee club/Club duplicity must be sweating blood tonight. Good.
Cluster OneFebruary 7, 2017 at 19:42
Attachment
A response
________________
There’s a surprise, Duff and Phelps were ‘surprised’ to receive notification of proceedings today! But wait, they say that’s because it’s ‘just one week before expiration of the limitation period’! Does that mean they were counting the weeks until that expiration date, when they could heave a sigh of relief?
Still, I’d have though innocent people would be surprised to have any sort of legal action taken against them, regardless of when any expiration period might be! I know I would! Clearly, for them, it didn’t come out of the blue.
I wonder if there’s any significance in the fact that it is David Whitehouse, himself, who is making this statement, and not someone from D&P’s legal department or PR team? If Duff and Phelps haven’t been named in the action, could it be that they’ve cut their men adrift?
SmugasFebruary 7, 2017 at 19:58
“In essence, BDO is now alleging that as the former administrators, we should have achieved a better return for creditors by selling the club’s assets on a piecemeal basis, including Ibrox and its playing squad.This is a strategy with which we fundamentally disagree both in terms of its deliverability and its relevance to achieving the statutory purpose of administration.Cant help feeling that Mackenzie with his wee club/Club duplicity must be sweating blood tonight. Good.
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Considering that, despite his being a free agent, Southampton felt compelled to give TRFC £500,000 (I think) for Stephen Davies, then it’s safe to assume that the players who walked away from Sevco alone would have amassed something close to the £5.5m if sold while under contract to RFC (IA)! It will be interesting, if it goes to court, to hear exactly what research D&P carried out to establish how much they could have got for the playing squad, sold individually, as well as how much the heritable assets could have made on the open market.
I suppose the decision, one way or the other, will rest largely on – in who’s interest the administrators should act once a CVA is rejected, and whether or not any prior agreement to sell, for a lesser amount than was offered under a CVA, is enforceable, or legally acceptable!
The ‘statutory purpose of administration’, I would imagine, ends at the point the CVA is rejected, when the statutory purpose of the administrator matches that of a liquidator or, perhaps, becomes no more than the custodian of the assets until such time as a liquidator is appointed!
Test
There’s a stage before that AJ Shirley! On entering administration it is the administrator’sduty to protect the company from creditors and to return it to reasonable health such that said protection can be removed. D&P appear to have made the decision that “the business” (their term which more accurately should read the assets of ‘Rangers’ miraculously dissociated from the liabilities of ‘Rangers’) was worth more intact i.e. Players plus stadium than the constituent parts. Not withstanding the accuracy of that viewpoint one would question the assumption behind it. The players alone were worth more than the eventual sales price received. So what did they think was going to inflate the value of the intact business (Mackenzie’s Club)? A green flag for the new club (which would own and operate the Old original Club) to enter straight into the top flight perhaps? I wonder who was offering those sorts of guarantees?
TILHOTDOGSBARK
FEBRUARY 7, 2017 at 13:16
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Thank you, that makes sense.
SMUGAS
FEBRUARY 7, 2017 at 17:13
Yes, but if they’re solely focussed on the undervaluation of the assets (or tangentially, on Green’s exclusivity clause regarding the assets allowing him to state the price) are they therefore saying the basket was undervalued to the tune of >£20m …
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Sorry if someone has already addressed this, there was a release of negative good will to income in the first set of accounts.
My understanding is that effectively they were saying that the assets were worth a lot more than they paid for them. I remember it being discussed at the time, it seemed a bit like a giruy to everyone else.
Extract attached.
Cluster One February 7, 2017 at 18:56 Before my mind starts to wander…was it John Clark, Easyjambo or James Doleman who bumped into someone when they left the kinloch and coral case,and they had a little chat.and the guy said look out for something.Does anyone remember who it was and does it have anything to with todays news?
=========================
It was me who bumped into David Grier. He had been in court progressing an action against the Lord Advocate and Police Scotland for their actions following the initial arrests of Grier, Clark and Whitehouse.
I’ve been keeping an eye on the Court of Session Rolls for their next court date.
Here’s what D&P said in their creditors report dated 10 July 2012
“In essence, BDO is now alleging that as the former administrators, we should have achieved a better return for creditors by selling the club’s assets on a piecemeal basis, including Ibrox and its playing squad.This is a strategy with which we fundamentally disagree both in terms of its deliverability and its relevance to achieving the statutory purpose of administration.”
The point is they “sold” the basket of assets prior to the CVA result. The deal was in place that if the CVA failed Green would get all of the assets for buttons.
That made no sense whatsoever. As soon as the CVA is rejected then the company and business become irrelevant, the job is to obtain the maximum return for the creditors. Breaking them up and selling separately would surely have achieved the best result.
It was a clear stitch up at the time and it still is.
SmugasFebruary 7, 2017 at 20:58
There’s a stage before that AJ Shirley! On entering administration it is the administrator’sduty to protect the company from creditors and to return it to reasonable health such that said protection can be removed. D&P appear to have made the decision that “the business” (their term which more accurately should read the assets of ‘Rangers’ miraculously dissociated from the liabilities of ‘Rangers’) was worth more intact i.e. Players plus stadium than the constituent parts. Not withstanding the accuracy of that viewpoint one would question the assumption behind it. The players alone were worth more than the eventual sales price received. So what did they think was going to inflate the value of the intact business (Mackenzie’s Club)? A green flag for the new club (which would own and operate the Old original Club) to enter straight into the top flight perhaps? I wonder who was offering those sorts of guarantees?
___________________________
I would agree that the administrator’s duty is to the company during administration, but at what point does administration end, and can it be right to circumvent the point where the creditors become the priority by agreeing to sell the assets of the liquidated company before the CVA has been rejected?
I don’t know the answer to that, but Green offered more for a company in the CVA than he was offering for the assets should the CVA fail, so why agree beforehand to accept a lesser amount without putting it out to tender (if that’s the correct expression) on a break-up basis, or even as a basket of assets? I would imagine that the administrators, if this is a normal procedure, should have to be able to show, quite categorically, that it was in the best interests of the creditors for that arrangement to be made, and have the figures to back it up.
They may have acted legally in this pre-CVA agreement with Green/Sevco, but surely in doing so, they must be in a position to fully back up their decision with documentary evidence, or, in just about every case of insolvency, this would be a terrific wheeze for the spivs! On the face of it, BDO seem to be saying they acted improperly in selling the assets to Green for a paltry amount within this agreement! If BDO’s claims are upheld by the court, then this deal, between the administrators and Green/Sevco, was improper!
easyJamboFebruary 7, 2017 at 21:37
Here’s what D&P said in their creditors report dated 10 July 2012
As previously reported, the tangible assets of the Club held limited value and as such the sale consideration received represents the perceived future potential of the business to deliver profit. Based upon recent financial performance, the uncertainty surrounding future European participation and the offers received during the sale process, the Joint Administrators regard the sale price achieved to be the best result possible for creditors following the rejection of the CVA Proposal.
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Smugas, it would appear from this report that D&P were (supposedly) acting on behalf of the creditors when agreeing the sale to Green/Sevco, not the company in administration, so should have been putting their interests, and thus aiming to make maximum return, as opposed to selling the business/club as a going concern! The question now, must be, did they act wholly in the creditors’ interest, or were they trying too hard to give Mr Green a bargain?
This may be of interest in relation to the current situation (and indeed the situation at the time).
https://www.purnells.co.uk/limited-company/administrations/what-are-the-purposes-of-administration
The three Administration statutory purposes (or required outcomes) are:
– Rescuing the company as a going concern. (Note: this purpose is to rescue the company as opposed to rescuing the business undertaken by the company.) {My bold}
– Or, achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration).
– Or, realising property to make a distribution to one or or more secured or preferential creditors.
EASYJAMBOFEBRUARY 7, 2017 at 21:28
thanks for reply
The same Whitehouse. that is managing Director of Duff & Phelps who is today surprised?
Could BDO’s claim throw a spanner in the SFA’s cornflakes?
I believe the assets were only sold so cheaply, mainly because Crumbledome, and Minty’s Park, only had value to a football/Rugby club or similar. At the time Sevco were neither of these things, (although fully intending to become one)
Chuckles is on record stating he never bought a club, but a basket of assets.
However 6th floor of Hampden, although mostly they have shied away from a direct answer, appear to be of the view that he did buy a club.
Ergo he must have did so at the point of sale.
D & P look like they will contend this, as they never sold the assets based upon a much higher valuation, (i.e. the value to a club) which they should have done if Chuck had bought, “A Club” at the point of sale
That puts the SFA in an indefensible position (I know).
The “buyer” on record as stating he never bought a “club”. And now the “seller” saying they never sold a “club”
But the SFA/SPFL saying. “But he did, he did buy a club”
EASYJAMBOFEBRUARY 7, 2017 at 21:37
just catching up…..
, the Joint Administrators regard the sale price achieved to be the best result possible for creditors following the rejection of the CVA Proposal.
Is this why BDO are taking action as the sale price of a job lot together was not the best result possible for creditors following the rejection of the CVA Proposal. but a better result for creditors would have been to sell everything as individual
Corrupt official February 7, 2017 at 18:04
Looks like catch-up time to refresh the memories. I think as well as BDO looking in to why players were not sold, before being allowed to walk away for free, They will be looking at this.
The full details of the claims being pursued by BDO will be interesting.
https://scotslawthoughts.wordpress.com/?s=gratuitous+alienation
————————————————————————————————–
CO
Thanks for posting that link. Oh man could Paul McConville write well. One of the very best at taking complex issues and explaining them in terms a lay person could readily understand. Such an untimely and immense loss.
Big Pink,
An excellent blog. And prescient too given today’s announcement from BDO
In a hypothetical situation of BDO winning their case against Duff and Phelps would this count as gratuitous alienation? I’ve no idea, I just don’t have that sort of knowledge. Is anyone able to shed some light on this?
And if it was found to be gratuitous alienation then what would the consequences be, if any, for TRFC/TRIFC?
EJ
So not intangible, ethereal thingies?
A smart move on the part of BDO. They have evidently followed up on a remark by Alan Rough on the Real Radio phone-in circa 2011 when he declared it was the strangest administration he had ever witnessed.
EX LUDO
FEBRUARY 8, 2017 at 00:06
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Indeed, thank heavens Roughie made his comment on Real radio all those years ago, otherwise Mr Cohen and Mr Stephen may not have thought of this.
Can I post Malcolm Cohens specialism again, I realise I’ve done it several times before.