A Guest Blog for TSFM by beatipacificiscotia
As a child I read a poem by John Godfrey Saxe, “The Blind Men and the Elephant”, and stumbled upon it again recently. It is a simple tale of how six blind men encounter an Elephant and attempt to describe the animal:
It was six men of Indostan
To learning much inclined,
Who went to see the Elephant
(Though all of them were blind),
That each by observation
Might satisfy his mind.
The First approached the Elephant,
And happening to fall
Against his broad and sturdy side,
At once began to bawl:
“God bless me! but the Elephant
Is very like a WALL!”
You get the idea. The other blind men did little better. The second grabbed the tusk and thought the elephant like a spear. Others thought the elephant like a snake (the trunk), a tree (the leg), a fan (the ear), and finally a rope (the tail). What does this have to do with this blog? Let me explain.
There is a danger of all of us, whether consciously or unconsciously, making the same mistake as these blind gentleman. It is too easy to use the parts of the argument that fit our values and belief system, at the expense of the whole truth. The 13th century Jaina scholar, Mallisena, described a much earlier version of the same tale as a parable to argue that people deny various aspects of truth; deluded by the aspects they do understand, they deny the aspects they don’t understand. He said:
“Due to extreme delusion produced on account of a partial viewpoint, the immature deny one aspect and try to establish another. This is the maxim of the blind (men) and the elephant.”
I am incapable of putting it any better than that, though I would go further. I argue that people are deluded by the aspects that they choose to understand, and deny the aspects that they refuse to understand. Which leads me to my tale …..
I have recently read a news report about a decision taken by the Advertising Standards Authority on advertising activities of The Rangers Football Club Ltd and their claims to history and honours. It includes the following quote referring to advice from the SFA:
“We also consulted with the SFA, which confirmed that its definition of a football ‘club’ varied depending on context, and could sometimes refer to an entity separate from the club’s corporate owner.”
I was most unhappy to read this part of the statement. I am yet to see the definition or statement of when you could “sometimes refer to an entity separate from the club’s corporate owner”. This is a contradiction to the definition of a football club given by FIFA; a definition which is handed down to the Confederations, and from Confederations to Associations.
You may or may not be aware, the application of good governance in football is administered through club licensing. This annual process ensures that minimum standards are maintained, to promote growth and development, and ultimately protects all of football – every club, every player and staff member, the integrity of every competition, suppliers of goods and services, the reputation of sponsors, and most of all the fans. FIFA Club Licensing Regulations state that a license applicant must be a football club, defined as:
“Legal entity fully and solely responsible for the football team participating in national and international club competitions that applies for a licence.”
This is a clear and unambiguous definition, which is being ignored by the SFA. Why is this issue so important? Simply, a football club must be held responsible for its commercial activities. For example, an over-ambitious and over-spending Rangers changed the Scottish football landscape forever. Other clubs tried to compete in an unsustainable “Cold War”-like football arms race. I believe Scottish football was damaged. Many clubs have been taken to the brink of death. This could happen in any country, in any league, anywhere in the world. For that reason, a football club and its corporate body must be one and the same, living or dying, inseparably intertwined. The separation of club and company is a myth, a myth dangerous to good governance. Rangers (1872-2012) should be a cautionary tale told to every club owner.
There are many benefits to club licensing. These including minimum standards for stadia and infrastructure, youth development programs, and much more. I would heartily recommend that you read the FIFA document if you have the time. It gave birth to the word and spirit of Financial Fair Play. Look at some of the financial benefits detailed:
10.3 Benefits
Implementation of the financial criteria will help deliver both short and long-term improvements for clubs, the licensors and the football family in general. For the football family in general, the financial criteria should help to:
• safeguard the continuity and integrity of competitions;
• increase the transparency and credibility of clubs’ financial operations;
• improve confidence in the probity of the football industry;
• create a more attractive market for the game’s commercial partners and investors; and
• provide the basis for fair competition, because competition is not just about the teams on the pitch.
For the licensors, the financial criteria should help to:
• improve their understanding of the financial position and prospects of their member clubs;
• encourage clubs to settle liabilities to creditors on a timely basis;
• enhance transparency in the money flow of clubs;
• enhance their ability to be proactive in assisting clubs with financial issues; and
• provide a starting point for club benchmarking at a national level for those licensors and clubs who want to develop this aspect.
For the clubs, the financial criteria should help to:
• improve the standards and quality of financial management and planning activities;
• enable better management decision-making;
• enhance clubs’ financial and business credibility with stakeholders;
• improve financial stability; and
• enhance revenue-generating ability and cost management.
Important words, and I trust the value and opportunity these regulations offer are now clear. Note bullet points 3 and 4, and that our top league currently does not have a sponsor. The SFA must ensure the integrity of competitions, discourage financial recklessness, and protect football for everyone. This is only possible with a clear, unambiguous statement that confirms club / company are one and the same thing.
To suggest a football club can in some way survive liquidation is to undermine the definition of what is a football club, one of the cornerstones of FIFA Club Licensing Regulations. For the SFA to suggest a football club can in some way survive liquidation, or allow this belief to go unchallenged, is a shameful dereliction of duty. It puts all of football in danger. We cannot allow this. There is too much at stake.
The poem ends thus:
And so these men of Indostan
Disputed loud and long,
Each in his own opinion
Exceeding stiff and strong,
Though each was partly in the right,
And all were in the wrong!
The blind men were each partially right, though in their vanity / stubbornness / ignorance they failed to find the truth. There is a lesson for us all in this story. This may appear to be an attempt to renew the old club / new club debate. It is not. To see this as an opportunity to score points against Rangers fans is to completely miss the point – you have failed to find the truth.
This is global issue affecting one of the fundamentals of good governance. Good governance must be the beating heart of our game – ensuring good health and long life. I am looking at the here and now, and ahead into the future.
We must protect and promote ALL of the FIFA Club Licensing Regulations. To deny any part is to refuse to see the whole elephant, like the foolish blind men.
Smugas says:
January 31, 2014 at 11:42 am
If you dance with the devil, wear a flame proof suit.
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FFP is a half-arsed scheme from a corrupt and labyrinthine organization pretending to reform. If favours the status quo, and as you say, the rich clubs who can afford expensive lawyers and advisers – as for tax planning. But smaller clubs need to be careful not to think they can save a few quid by not paying someone to advice when their strategy has moved outside the rules of the game and the laws of the land 😉
Campbellsmoney
BUSted 😆
I wasn’t belittling your undoubted knowledge (hopefully not direct exerience) of insolvency law by the way. Normally the entity is desperately trying to distance itself from the crash site, not openly bragging it was them all along.
If the authorities take the view that they are soley foccussed on the club, this now miraculously ringfenced ‘thing’ and do the media’s three monkeys on the business aspects, then I believe my version is closer to the scenario in which we now find ourselves.
Headline: m.c.f.c. rules out hot date with Scarlett Johanssen – but hopes for curry and beer as transfer deadline approaches
Headline: Rangers boss Ally McCoist rules out any deadline day signings.. but hopes to keep squad intact
http://www.dailyrecord.co.uk/sport/football/football-news/rangers-boss-ally-mccoist-rules-3097088
Smugas says:
January 31, 2014 at 12:17 pm
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Question for you – are Busted the same group even without Charlie?
Don’t worry abut belittling me – I could do with being downsized and it never does anyone any harm to have their pomposity pricked every now and again. 😀
There are so many aspects of this saga that fly in the face of what one would normally expect to see in company law, business practice and insolvency law that I hesitate to try to apply normal logic to this situation. An earlier poster identified that many of the things that have occurred have been the opposite of what one would have expected to see – e.g. no player redundancies during administration etc.
However I have to say that I have some faith in the law and that eventually I hope (and trust) that the law will be seen to work (slowly but effectively).
Oh the law will work eventually. I have the same faith as you on that.
But only on the company…
ecobhoy says:
January 31, 2014 at 10:12 am
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Danish Pastry says:
January 31, 2014 at 8:18 am
….But in this day and age it would be easy and relatively inexpensive to build an audio-visual record of the school history which could be added to by former pupils or children of them as well as ordinary residents of the area.
We have to move with the times and I really think the AV would have been the way to go. I would have expected Celtic to assist in this but it’s the responsibility of Glasgow Council, who presided over the structural demise of the building, to carry-out the project. It would have been lovely to involve other East End schools in the project – each investigating different historical aspect which would allow children many insights into how their world has changed and progressed over the decades.
All it takes is ‘Vision’ but often any huge bureaucracy like Glasgow Council just doesn’t reach the starting line in that department. I blame the schools – well some of them.
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Great thoughts @echo. Your recent digging got me thinking along those lines too. Any museum-type, historical record project obviously can’t be a CFC project, but since Celtic Park is slap-bang in the middle of the 300-year-old industrial site, it would be nice to see the club become involved in any future project, in whatever capacity it felt it could do so.
On my travels here and there I’ve noticed how much local heritage projects mean to people, even down to very modest local collections outlining the history of an area. Of course, this case has my particular interest because I am from the East End, and its my heritage and history. The details of the mining and other industries, and human stories associated with them, should never be lost or overlooked either. Telling kids about the history of the ground they’re standing on could help them develop a better vision for the future. It’s strange to think that something as locally and historically significant to us as the Carlton Weavers was never even mentioned at primary or secondary level. You’d like to think an indy Scotland would change that type of thing.
I can’t see any any blue stick surrounding the actual demolition myself. If there was genuine ‘cultural outrage’, then I’d admire that. As I understand it, though, the slightly insane or contrived obsession is merely rodent in nature.
PS My old school on Ally Parade is still there, Jannie’s hoose annaw 🙂
Smugas says:
January 31, 2014 at 12:40 pm
Oh the law will work eventually. I have the same faith as you on that.
But only on the company…
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Yes – it is going to have to be that way because as far as the law is concerned there is no such thing as a Club (as the SPFL apparently imagines that concept).
” As an honest, plain-speaking, up-front, personal risk-taking business man, he is probably unique. ”
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He would have been unique if he had paid tax on his profit, he didn’t so he isn’t.
ptd1978 says:
January 31, 2014 at 7:35 am
I agree that the new Ranger’s behaviour and business model has been completely unacceptable and has only been possible because the governing bodies are so corrupt and willing to break their own rules only for the Ibrox club.
There can’t be a solution without the SFA being fixed so that Spiv activity results in a club suffering.
Look at Hearts. Vlad overspent madly and ran out of town. Hearts are basically guaranteed relegation now and still may disappear altogether.
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I for one hope Hearts survive.
Their fans have shown remarkable courage in dealing with the club going into administration; no whining about being punished, just stoic acceptance and buckling down to try to help the club keep going.
I sincerely hope it’s not long before Hearts recover.
” An earlier poster identified that many of the things that have occurred have been the opposite of what one would have expected to see – e.g. no player redundancies during administration etc.”
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No administrator can give away millions of pounds worth of player assets without trying a CVA first, asking for a pay cut until a CVA was proposed was the most prudent course of action, the administrator cannot just assume the CVA would be rejected without getting a refusal.
HMRC only refuse CVAs that are proposed not before.
Hindsight is 20-20.
manandboy
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I completely agree. Middle ground was a bad choice of words. Maybe accord would have been better. There are many many areas if disagreement where most Rangers fans and apologists are just incorrect and no examples I can think of where any other club just denies the facts.
The only areas for compromise I can think of are:
The idea that all Rangers fans approve of the corruption at Ibrox.
The idea that oneupmanship by Rangers fans at the expense of Celtic fans is automatically sectarian and not just football rivalry.
The idea that only one club has problems, just because it’s problems are much worse than any other club.
Is there nothing she could say to convince you? 😆
Danish Pastry says:
January 31, 2014 at 8:18 am
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upthehoops on January 31, 2014 at 7:25 am
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A warning to anyone travelling in or around the Parkhead area of Glasgow today. Celtic have commenced demolition work on London Road Primary School. Rumours of several angry bears in the area have yet to be confirmed.
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Don’t know about angry bears but @celticfc posted photo links of the destruction of the listed building yesterday.
Jannie’s hoose first away. A very sad sight to behold, this unsentimental bulldozing of a wee bit of East End culture, heritage and history — three things the club is otherwise associated with.
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I appreciate what you’re saying, but progress is inevitable and the old must always make way for the new.
Many listed buildings in Glasgow in the past 40 and more years have been left to deteriorate into eyesores.
There was a church on the southside of Glasgow which had lain empty and abandoned for many years and had trees and bushes and weeds growing out of the walls! The building was situated near the junction of Cathcart Road/Thistle Street, (now gone) a couple of hundred yards from The Brazen bar.
I believe this eyesore has since been demolished.
Thankfully.
D&P lost an additional £4m or so during the administration process. It was incumbent on them to trim the bills, which they failed to do. Dundee, Dunfermline, Motherwell, Hearts all shed players and other employees prior to attempting a CVA. D&P should have done the same; doing so improves the terms of any proposed CVA and so the likelihood of its acceptance
scottc says:
January 31, 2014 at 1:30 pm
Headline: m.c.f.c. rules out hot date with Scarlett Johanssen – but hopes for curry and beer as transfer deadline approaches
Is there nothing she could say to convince you? 😆
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Scott – she’s made a couple of offers – but they are far below my expectations – and to be honest quite disrespectful – she may come in with something at the 11th hour – but otherwise maybe we’ll talk again in the summer 🙂
” D&P lost an additional £4m or so during the administration process. It was incumbent on them to trim the bills, which they failed to do. ”
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They trimmed the bills by getting pay cuts and kept the high asset value on the books, I suggest the value of these assets was far in excess of 4 million.
” Dundee, Dunfermline, Motherwell, Hearts all shed players and other employees prior to attempting a CVA. ”
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They did not shed players with an asset value of 20 million, horses for courses, a cabbage is not a stapler.
” D&P should have done the same; doing so improves the terms of any proposed CVA and so the likelihood of its acceptance ”
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Reducing the asset value of a business does not improve the terms of a CVA, in fact the opposite is the case, which makes its acceptance less likely.
Dumping 20 million worth of assets is not going to increase any offer, common sense says it will reduce any offer.
ptd1978 says:
“Fans need to be more tolerant too and to say other clubs are doing nothing wrong is burying your head in the sand a bit. Quite a few clubs have fan problems and could be more active in dealing with them”
I stopped there, AT to his credit acknowledged the apples and oranges involved with such a topic, and even Millwall don’t command a fear of ” civil unrest ” by the FA/Polis.
Again, i’m not arguing with you, you have a point about mediation or whatever being required. I had quite a long post trying to expand, but I deleted it as I am no longer sure how you think everyone else is contributing to the problem.
Were the administrators under the impression that HMRC – and this is pre FTT remember – would approve said CVA? Why?
My recollection but I know my learned friends will keep me right – contracts would survive a CVA (the dreaded TUPE) thus the asset valuation would remain in place, to be sold to the eventual good of the creditors whereas under a normal liquidation they would not, no?
expatbhoy says:
January 31, 2014 at 1:20 pm
No administrator can give away millions of pounds worth of player assets without trying a CVA first, asking for a pay cut until a CVA was proposed was the most prudent course of action, the administrator cannot just assume the CVA would be rejected without getting a refusal.
HMRC only refuse CVAs that are proposed not before.
Hindsight is 20-20.
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Why did HMRC choose to vote against the CVA?
Because (and in this particular case this will not have been the only reason) the CVA envisaged that football debts would be paid in full. HMRC had made it abundantly clear in publicly available guidelines that they would oppose CVAs that attempted to do such a thing. So why bother attempting a CVA at all when the arithmetic meant it was doomed to fail? All insolvency practitioners know about these guidelines.
Apologies. You are correct in that and I withdraw it. I still firmly believe though that D&P should have reduced the squad size.
Administrators do not do impressions, it will get them sued to death, their job is not to assume anything but to submit a CVA and wait and see, it was obvious Rangers was worth more as a going concern for the very reasons you mentioned amongst others.
If D&P had dumped 20 millions worth of assets without trying a CVA first, they would have been sued and they would have lost, an administrator cannot guess what HMRC may do, it doesn’t work like that.
Smugas says:
January 31, 2014 at 1:55 pm
Were the administrators under the impression that HMRC – and this is pre FTT remember – would approve said CVA? Why?
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It was clear from previous behaviour that HMRC, as the biggest creditor by far and so the must-have vote, would not be accepting less than 10p in the pound – although Green claimed to have been led to believe otherwise and was indignant when the CVA failed – crocodile tears !!!
EDIT: HMRC’s thinking clearly included the fact that agreeing a CVA wipes the slate clean for any action against present and former directors/officers for non-payment, evasion etc.
” It was clear from previous behaviour that HMRC, as the biggest creditor by far and so the must-have vote, would not be accepting less than 10p in the pound ”
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This is factually inaccurate, HMRC do not comment on CVA proposals prior to judgement, the plain reality is the only way to know HMRC’s attitude is by submitting a CVA, therefore D&P would be negligent in dumping assets based on an assumption.
edit:
” HMRC’s thinking clearly included the fact that agreeing a CVA wipes the slate clean for any action against present and former directors/officers for non-payment, evasion etc. ”
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Irrelevant since this information was only released after the CVA was rejected, an administrator is not psychic.
expatbhoy says:
January 31, 2014 at 2:07 pm
” It was clear from previous behaviour that HMRC, as the biggest creditor by far and so the must-have vote, would not be accepting less than 10p in the pound ”
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This is factually inaccurate, HMRC do not comment on CVA proposals prior to judgement, the plain reality is the only way to know HMRC’s attitude is by submitting a CVA, therefore D&P would be negligent in dumping assets based on an assumption.
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The key phrase here is: previous behaviour. Can you give an example where HMRC has accepted anything near 10p in the pound where they were the major creditor and there was overwhelming prima facie evidence of industrial, persistent and prolonged evasion and similar evidence of attempts to deny HMRC access to documentation of such ?
As the witching hour approaches it looks like CEO Wallace will still have a full squad of 56 on full wages.
Stockbridge may have gone but as his full £200k was paid out there has been no saving.
McCoist’s first reduced pay cheque may have just gone through at the end of this month.
Other than that the rest of the coaching squad are all in place and there is no hue and cry over redundancy notices being passed out to non footballing staff.
CEO Wallace said he would consider all options for making savings.
Wondering if has be put a call into Craigie to see how best to avoid paying PAYE, NI and VAT?
The Daily Record story on lack of transfers in or out and the possibility of nowt happening in the summer basically confirms (and softens up the Bears) that if they do manage to cling on into next season the current squad is most likely the one they will have for the next year or two.
expatbhoy says:
January 31, 2014 at 2:07 pm
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” It was clear from previous behaviour that HMRC, as the biggest creditor by far and so the must-have vote, would not be accepting less than 10p in the pound ”
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This is factually inaccurate, HMRC do not comment on CVA proposals prior to judgement, the plain reality is the only way to know HMRC’s attitude is by submitting a CVA, therefore D&P would be negligent in dumping assets based on an assumption.
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expatbhoy – I agree that HMRC do not comment on specific proposals in advance but they had said very publicly that CVAs structured in the way that D&P structured this one would be rejected. There was never any doubt. It is not and has never been about the pence in the £ that was offered. I have seen HMRC approve a 1p in £ CVA and refuse a 50p in the £ CVA. They have no hard and fast rules about that.
” Because (and in this particular case this will not have been the only reason) the CVA envisaged that football debts would be paid in full. HMRC had made it abundantly clear in publicly available guidelines that they would oppose CVAs that attempted to do such a thing. So why bother attempting a CVA at all when the arithmetic meant it was doomed to fail? All insolvency practitioners know about these guidelines.”
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D&P did not breach any guidelines, the decision to settle football debts was outwith the CVA proposal, the footballing debts were clearly identified in the list of creditors, the decision to pay or not is up to the new owner, nothing to do with the Administrator or HMRC or the CVA proposal.
Let me repeat the arithmetic was sound, and D&P could not KNOW the CVA was doomed.
expatbhoy says:
January 31, 2014 at 2:03 pm
If D&P had dumped 20 millions worth of assets without trying a CVA first, they would have been sued and they would have lost, an administrator cannot guess what HMRC may do, it doesn’t work like that.
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If D&P were sitting on £20m of liquid assets, why did they agree to sell them and the property and the history and the rest for £5.5m when the obviously flawed CVA failed. Did the failed CVA impact the value of the players ? What is the lowest CVA percentage D&P have had accepted by HMRC in similar circumstances ?
.
expatbhoy – if it would have been negligent not to at least try a CVA, why is it that outside of football company administrations, CVAs are so rarely tried? By your thinking they should be proposed in virtually all administrations.
” I agree that HMRC do not comment on specific proposals in advance but they had said very publicly that CVAs structured in the way that D&P structured this one would be rejected.”
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D&P structured the CVA like any other, and HMRC never implied the structure would be a problem, they do not comment on CVAs prior to judgement, they did not reject the CVA because of the way it was structured.
I see Dignity Rules have been ditched by Rangers as part of their cost-cutting exercise 🙄
McMurdo is quoting Sandy Easdale as stating: that if Whyte turns-up at Ibrox he would: ‘Personally would throw him down the marble stair case .’
Amazing to threaten that kind of violence towards a man he says he has never met. As a cynic it appears to me that rumours of Whyte’s impending return is getting some people hot under the collar at Ibrox.
Love his quote: “It’s like if he can’t have Rangers then all he wants is to try to ruin things for everybody.” Well as my mammy dinned into me: ‘Shares go down as well as up’. It’s fortunate she passed away when she did because she surely would have if she had seen what happened to her beloved bank shares while her estate was being settled.
Still God rest her soul – she was a staunch trade unionist and co-operator and served in WWII with the WRAF and never ever stopped fighting for the underdog. So Sandy, I truly hope you aren’t tied in to a ridiculous price for any shares you are legally obliged to pay Green for.
He might end-up another marble staircase slipper and Ahmad too if his court action further depresses the Rangers share price. Might be better changing that blue carpet at the foot of the stairs to a red one especially with the cut-back in cleaners ❗
And another priceless quote: ‘“Craig Whyte is mad. Is he not aware that everyone with a share has more claim to RFC assets than he does?” I hope Sandy is right in his surmise that CW doesn’t have any shares because if he isn’t Wee Craigie might well be flogging the marble staircase 😳
All this tough talk – just the thing to get the Bears onside. But how does it sit with the complaint made to the Police pre-Xmas about threats of violence to three members of the Rangers Board including Easdale.
Will the SFA or AIM have anything to say about this utterance or is it acceptable to them
Stop dreaming eco – this isn’t any other club or director – This is The Rangers ❓
expatbhoy says:
January 31, 2014 at 2:07 pm
” It was clear from previous behaviour that HMRC, as the biggest creditor by far and so the must-have vote, would not be accepting less than 10p in the pound ”
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This is factually inaccurate, HMRC do not comment on CVA proposals prior to judgement, the plain reality is the only way to know HMRC’s attitude is by submitting a CVA, therefore D&P would be negligent in dumping assets based on an assumption.
edit:
” HMRC’s thinking clearly included the fact that agreeing a CVA wipes the slate clean for any action against present and former directors/officers for non-payment, evasion etc. ”
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Irrelevant since this information was only released after the CVA was rejected, an administrator is not psychic.
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Are you seriously suggesting that D&P thought there was a snowball’s chance in hell that HMRC would accept 9p/£1 in the circumstances ?
” if it would have been negligent not to at least try a CVA, why is it that outside of football company administrations, CVAs are so rarely tried? By your thinking they should be proposed in virtually all administrations.”
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Please do not invent my thoughts, CVAs are tried where there is more value to the creditors as a going concern, football is just one of many sectors and all of this is irrelevant to the fact, it does not matter how slim the chances are, an administrator cannot dump assets without knowing the CVA would be rejected.
m.c.f.c. says:
January 31, 2014 at 1:36 pm
Scott – she’s made a couple of offers – but they are far below my expectations –
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In breaking news, I can confirm that – following m.c.f.c’s rejection of personal terms proposed by Johanssen – her agent has been on to me in a last-ditch effort to get her set up before the deadline.
Unfortuntely I’ve just signed up Pfeiffer on a short-term contract, so it appears Johanssen is still looking for a suitable position.
” Are you seriously suggesting that D&P thought there was a snowball’s chance in hell that HMRC would accept 9p/£1 in the circumstances ? ”
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You seem to be missing the point, D&P could not KNOW the CVA would be rejected, they cannot afford to guess based on what is likely, can you imagine the outcome if the CVA was accepted and they had dumped 20 million of creditors money into the river?
Let me remind you the CVA offer was higher than the asset sale offer, on what grounds are D&P assuming rejection?
Re The CVA
HMRC publish guidelines on the circumstances under which HMRC will not agree a CVA.
I have seen said guidelines and read them through but I am unable at this time to provide a link.
In the circumstances, which included the deliberate and systematic witholding of PAYE & NI, under the guidelines, there was no possibility of a CVA being ageed by HMRC.
D & P must have known this, so also CG whose rant on TV showed that he was either incompetent or making a pretence.
Angus1983 says:
January 31, 2014 at 2:34 pm
m.c.f.c. says:
January 31, 2014 at 1:36 pm
Scott – she’s made a couple of offers – but they are far below my expectations –
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In breaking news, I can confirm that – following m.c.f.c’s rejection of personal terms proposed by Johanssen – her agent has been on to me in a last-ditch effort to get her set up before the deadline.
Unfortuntely I’ve just signed up Pfeiffer on a short-term contract, so it appears Johanssen is still looking for a suitable position.
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Apparently West Ham are also said to be interested in Scarlett according to Scarlett’s mum’s agent, since Katy Perry dumped Russel Brand and burned her WHUFC lingerie.
http://www.rangers.co.uk/news/headlines/item/6126-business-as-usual
btw what exactly passes for “business as usual” at ibrox ?
expatbhoy says:
January 31, 2014 at 2:38 pm
Let me remind you the CVA offer was higher than the asset sale offer, on what grounds are D&P assuming rejection?
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The CVA offer was £8.5m – for what you describe as £20m liquid assets plus properties plus history plus the rest – oh and not forgetting the “Get Out of Jail Free” card.. Now why didn’t HMRC jump at that ? D&P must have been shocked and bemused.
Is now a good time to ask why the administrators thought buying Cousin was a good idea? Maybe not.
expatbhoy says:
January 31, 2014 at 2:24 pm
D5P did not breach any guidelines, the decision to settle football debts was outwith the CVA proposal, the footballing debts were clearly identified in the list of creditors, the decision to pay or not is up to the new owner, nothing to do with the Administrator or HMRC or the CVA proposal.
Let me repeat the arithmetic was sound, and D&P could not KNOW the CVA was doomed
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expatbhoy – I have not suggested that D&P breached any guidelines. What D&P proposed is perfectly permissible in law. What I have said however is that if a CVA is proposed where, as a result of the arrangements, one group of creditors is to get paid in full (whether as part of the CVA or outside the CVA – whether as from the assets of the CVA company or from the assets of another party) then HMRC have told the world at large that they will oppose such a CVA. D&P knew that the CVA that they would propose would have to be structured that way. So from the minute they knew that football debts would be dealt with in full, they knew that the CVA was doomed to failure.
For the avoidance of doubt, I have a feeling that HMRC might have rejected this CVA anyway regardless of how it dealt with football debts. I think HMRC’s subsequent comment about allowing a liquidator to investigate pre-insolvency matters is a very clear hint.
expatbhoy says:
January 31, 2014 at 2:33 pm
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” if it would have been negligent not to at least try a CVA, why is it that outside of football company administrations, CVAs are so rarely tried? By your thinking they should be proposed in virtually all administrations.”
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Please do not invent my thoughts, CVAs are tried where there is more value to the creditors as a going concern, football is just one of many sectors and all of this is irrelevant to the fact, it does not matter how slim the chances are, an administrator cannot dump assets without knowing the CVA would be rejected.
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OK – sorry for seeming to be presumptious. Why then did the administrators not go straight to a sale to a newco. A quick business and asset sale – no need to dump assets. No need to run up £4m of costs in the administration trading on while trying to get a CVA that (I am being very charitable here) had at best a slim chance of success.
I have to disagree with you when you say ” it does not matter how slim the chances are” – because it absolutely does matter. If there is a 1 in a hundred chance of getting a CVA approved – should an administrator trade on while trying to put one together – if – as here – the result is a smaller return to creidtors than would have been obtained if the decision had been made on day one that a CVA was not a goer.
Campbellsmoney says:
January 31, 2014 at 3:04 pm
expatbhoy says:
January 31, 2014 at 2:24 pm
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Enjoying the discussion guys. Is there a suggestion that D&P should have moved straight to liquidation of this company? Or do you hold to the view that the appointed Administrator had no choice but to try to secure a CVA first?
ecobhoy says:
January 31, 2014 at 2:28 pm
McMurdo is quoting Sandy Easdale as stating: that if Whyte turns-up at Ibrox he would: ‘Personally would throw him down the marble stair case .’
.
Is jack working double time? 😉
Blu/others
Just on that point, does anyone have a link to the charlotte download of the Doncaster discussion piece re treatment of newco’s a couple of weeks back from Summer 13. I think it might be relevant here also.
Ta.
EDIT: Meant to say Blu, don’t forget the infamous incubator phase first. Oldco then Newco, then oldco, oh you do the oldco coco and you turn….
Sorry guys – Friday demob happy.
blu says:
January 31, 2014 at 3:14 pm
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Enjoying the discussion guys. Is there a suggestion that D&P should have moved straight to liquidation of this company? Or do you hold to the view that the appointed Administrator had no choice but to try to secure a CVA first?
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blu – personally, all the evidence points to D&P acting in the interests of preserving a football club (institution) playing at Ibrox and NOT acting in the interests of the creditors – which is their court appointed duty. That might tally with who selected D&P and their previous business relationship. Did HMRC give D&P and others enough rope to hang themselves ? BDO are the final arbiters – although that may be several years from conclusion. D&P’s professional body found nothing untoward – but I seem to remember – without checking – that the investigation had a somewhat arcane focus.
Campbellsmoney says:
January 31, 2014 at 3:13 pm
OK – sorry for seeming to be presumptious. Why then did the administrators not go straight to a sale to a newco. A quick business and asset sale – no need to dump assets. No need to run up £4m of costs in the administration trading on while trying to get a CVA that (I am being very charitable here) had at best a slim chance of success.
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I believe the initial administration costs were estimated at £500k. Maybe Duff & Phelps got struck by Rangersitis and realised that they too could get their share of the honey pot? It’s amazing what the lure of ££££ signs can do to a company.
Not sure if D&P were ever released as admins – they requested that at the end of administration – but not granted at the time by LH – can’t remember any update for official discharge?? – Anyway, they could still be in this one way or other – esp why CWs assumed pre-pack not pursued
tomtom says:
January 31, 2014 at 3:25 pm
I believe the initial administration costs were estimated at £500k. Maybe Duff & Phelps got struck by Rangersitis and realised that they too could get their share of the honey pot? It’s amazing what the lure of ££££ signs can do to a company.
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D&P fees topped out at £2,783,872.80 incl VAT (£2,319,894.00 excl VAT) – http://scotslawthoughts.wordpress.com/2012/08/28/administrators-how-to-spend-millions-in-creditors-interests-the-rangers-way/
Or to put it another way, 51% of £5.5m. Best interests of the creditors ? You decide.
” In the circumstances, which included the deliberate and systematic witholding of PAYE & NI, under the guidelines, there was no possibility of a CVA being ageed by HMRC. “.
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I am sorry but this is simply not true, non-compliance does not disqualify a CVA, HMRC accept over 70% of CVAs and they are all non compliant, they have to be to make HMRC a secured creditor.
This is why the CVA was rejected, nothing to do with structure, footballing debts or even the size of the bid, and D&P were not told this until after the CVA was rejected, they could not have known beforehand, it is against HMRC policy to discuss CVAs prior to submission.
“A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company’s financial affairs in recent years. A CVA would restrict the scope of such action. ”
D&P couldn’t possibly know the likely outcome in advance, that is why they were unwilling to risk their professional reputation and livelihood on a guess.
Danish Pastry says:
January 31, 2014 at 8:18 am
‘…Jannie’s hoose first away. A very sad sight to behold, this unsentimental bulldozing of a wee bit of East End culture, heritage and history — three things the club is otherwise associated with.’
———
Yes, DP, it is a little sad when ‘ iconic’ buildings are bull-dozed to leave not a trace. That particular style of building ( the red sandstone parish school board schools) is etched in the minds and hearts of hundreds of thousands of Glaswegian’s still alive.
For many of us, they and the teachers in them,were in large measure the shapers of our characters, the places of our earliest and perhaps longest lasting friendships, and, in our early primary days ( at least in my case) the furthermost point to which we were permitted to travel on foot and alone, with all the sense of adventure attached to exploring neighbourhoods and territories that felt different and strange.
I would like to think that Celtic will keep some at least of the stones and build a little something for incorporation into their proposed new walkway to the stadium.
I hope that at least the possibility has been raised at Board level.
blu says:
January 31, 2014 at 3:14 pm
Campbellsmoney says:
January 31, 2014 at 3:04 pm
expatbhoy says:
January 31, 2014 at 2:24 pm
===============================
Enjoying the discussion guys. Is there a suggestion that D&P should have moved straight to liquidation of this company? Or do you hold to the view that the appointed Administrator had no choice but to try to secure a CVA first?
+++++++++++++++++++++++++++++++++++
As it turned out ,the football authorities suddenly realised that football clubs are immortal,
why bother with a CVA if liquidation gets you the same result,
just come out of liquidation, then the next day and carry on running the business,
as Doncaster stated, it’s all merely a legal method of shedding debt,
same club, same colours and badge, five wee stars if they apply,
the bit that i still don’t get ,
if administration and liquidation are one and the same,
why offer £8.5m by way of a CVA
if a £5.5m asset purchase gets you everything a CVA would get you.
As a NEWCOmpany owner, what would that extra £3m get you if the CVA is accepted ?
m.c.f.c. would you guess that expatbhoy is in a bit of DeNiall ?
” So from the minute they knew that football debts would be dealt with in full, they knew that the CVA was doomed to failure. ”
The football debts were part of the list of creditors, let me repeat no such arrangement existed in the CVA proposal, the CVA was not rejected because of footballing debts.
expatbhoy says:
January 31, 2014 at 3:49 pm
”……“A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company’s financial affairs in recent years. A CVA would restrict the scope of such action. ”
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There are still some individuals who are very,very worried about the UTTT.
If they haven’t already got their loot stashed away far from HMRC’s reach-just in case the verdict goes against them- they had surely better move fast.
” I have to disagree with you when you say ” it does not matter how slim the chances are” – because it absolutely does matter. If there is a 1 in a hundred chance of getting a CVA approved – should an administrator trade on while trying to put one together – if – as here – the result is a smaller return to creidtors than would have been obtained if the decision had been made on day one that a CVA was not a goer. ”
The result would not have been a smaller return, you are assuming all the 4 million would vanish in a liquidation, it would not, and the creditors were obviously getting a higher return.
As I said the reasons for the rejection free the administrator from any claims, they could not have known the reasons for rejection and could not therefore calculate how slim or otherwise the chances were.
McCoist has given his approval to the Wallace timetable, saying: “I would have thought that was about fair, yeah. I would agree with Graham there.
“He has been completely honest with everybody and if he said a five-year plan has been put in operation then I think we should respect that.”
===========================================================
I see Ally not only agrees with but is backing Wallace 100% – that’s him fracked then 😆
But what amazes me is that Wallace hasn’t even completed his 120 day fact-finding to be able to announce an immediate survival plan – but suddenly we have a 5 year ‘Vision’ being unrolled. As I say: ‘Truly Amazing and a pile of keich.’ 😆
expatbhoy says:
January 31, 2014 at 3:49 pm
D&P couldn’t possibly know the likely outcome in advance, that is why they were unwilling to risk their professional reputation and livelihood on a guess.
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expatbhoy – do you agree that D&P would have been aware of the HMRC guidelines about CVAs?
Do you agree that D&P should have realised that the CVA (and the surrounding issue of someone picking up the football debts in full) are exactly what HMRC are referring to in the guidelines when they say :-
“any proposal by any member of any organisation that requires debts owed to its
members, to be paid in full, whether inside or outside of the arrangement or
before or after the completion of the arrangement when all other unsecured
creditors will become bound to accept a compromise of their debt. Here ‘members’
includes any prescribed associate(s) or other creditor(s) specified by
the organisation.”
If so, at the very least, D&P should have had a very clear inkling that any CVA would be opposed.
By proceeding with the CVA , D&P were proceeding – not on a guess- but on a wing and a prayer. I would suggest that in such circumstances, there could be no question of negligence in deciding not to propose a CVA – quite the reverse – such a decision would have been clearly a rationale and easily explainable decision.
It may be that what you mean when you say “KNOW” is something like ” know with absolute certainty” (apologies if this is not what you mean). If so, you are right – but only in the very restricted sense that if I drop an egg out of a window I cannot know that it will break. It probably will – it almost certainly will – but there is a chance that it might not. So I cannot say that I know it will break.
So did D&P “know” that the CVA was doomed to failure? Not in the restricted sense above. Should a CVA have been proposed on the off chance that HMRC would not follow their own guildelines? Because that was what D&P were relying on wasn’t it?
coatbrigbhoy says:
January 31, 2014 at 3:59 pm
m.c.f.c. would you guess that expatbhoy is in a bit of DeNiall ?
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Ah those were the days – Paul was never squeamish about a robust tackle or a bit of argee-bargee – but we need to be more respectful these days 🙂
twopanda says:
January 31, 2014 at 3:16 pm
ecobhoy says:
January 31, 2014 at 2:28 pm
McMurdo is quoting Sandy Easdale as stating: that if Whyte turns-up at Ibrox he would: ‘Personally would throw him down the marble stair case .’
Is jack working double time? 😉
===============================================
Don’t know about that but I hear he’s keeping away from the edge of the stairs.
I wonder what Mr Struth would make of it all 😈
.
In my view, the analysis should have been like this:-
1. Can we do a CVA? No chance! HMRC will oppose it. Is there any chance they won’t oppose it? Well there is always a chance I suppose. That would mean them going against their published guidelines wouldn’t it? Yes. Shall we wing it anyway. No.
2. Ok what do we do then? Sell the business and assets as quickly as possible for the benefit of creditors.
I suspect that what must have happened is that instead of the answer “no” at the end of point 1, the answer was “yes”.
By deciding to propose a CVA anyway, that then meant that the administrators were committed to carrying on the business until a CVA could be proposed. That took until mid-summer 2012. The position for creditors deteriorated all through that period. For the avoidance of doubt, I am not saying that they should have proposed a CVA sooner. They could only propose a CVA once they had someone who was prepared to put funds towards it.
If the decision had been taken not to propose a CVA, and instead if it had been accepted that the best route for creditors was a sale of the business and assets to a newco (as would have been the case in almost every other type of business) then the business and assets could have been marketed for sale.
Because of the insistence on proceeding with a CVA, the business and assets were not marketed for sale as a going concern. Accordingly we will never know what offers may have been received. However, the opportunity to buy what was on offer (debt free – except of course for TUPE liabilities) might have elicited a better return to creditors. Its not actually inconceivable to my mind that even a break up sale might have generated a better return in this particular situation – although in a break up, employee costs would fall to be met out of the realisations.
When my team moved grounds I bought a slice of the turf for £5. Imagine how much even just the football memorabila down at Ibrox might have achieved at public auction.
ecobhoy says:
January 31, 2014 at 2:28 pm
“McMurdo is quoting Sandy Easdale as stating: that if Whyte turns-up at Ibrox he would: ‘Personally would throw him down the marble stair case .’”
—————————-
The recruiting of the Easdales onto the Rangers board did seem a wee bit left field. However if the clumpany were anticipating unwanted interference in their affairs then perhaps a robust approach to business, that the hard working Easdale brothers might provide, would be a useful addition to the available skillset.
” Do you agree that D&P should have realised that the CVA (and the surrounding issue of someone picking up the football debts in full) are exactly what HMRC are referring to in the guidelines when they say :”
Footballing debts were not in the structure, they were not part of the proposal, they were included in the list of creditors and footballing debts was not the stated reason for the rejection, the stated reasons could not have been guessed beforehand.
We will have to agree to disagree.
expatbhoy says:
January 31, 2014 at 4:08 pm
As I said the reasons for the rejection free the administrator from any claims, they could not have known the reasons for rejection and could not therefore calculate how slim or otherwise the chances were.
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All you seem to be saying repeatedly is that D&P could not have known that the CVA was deeply flawed. But surely that is exactly the expertise they are being paid to exercise in the interests of maximising recovery for the creditors. You’ve failed to address any of the issues concerning precedent: either HMRC behaviour or D&P CVA achievements. Please stop flogging this horse – it is a dead horse….
btw – at the risk of being moderated how do you know that D&P didn’t know that the CVA was a rank outsider with three legs ? As Jonnie Cochrane famously said: “There’s something wrong here, there’s something not right”
Does Mr Wallace realise that contrary to popular belief that rules do not apply to sevco ………. DEADLINE DAY actually means deadline day 😉 time is slipping by
#skint
Campbellsmoney says:
January 31, 2014 at 4:19 pm
“Because of the insistence on proceeding with a CVA, the business and assets were not marketed for sale as a going concern.”
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For me, putting aside all the pro’s and con’s (see what I did there), the above point is what shines through.
I had argued previously some time ago that, judging by documents we came into possession of, a CVA was seriously being considered prior to the administration event. The majority of poster responses to this suggestion was that they did not believe that a CVA was ever really on the cards as ulterior motives were at play.
What could or couldn’t have happened is I’m afraid immaterial now. It does however make an excellent discussion and I appreciate the ongoing education.
Ecobhoy,
I now have an image of Craig Whyte and Sandy Easdale wrestling at the top of the marble staircase for control of the assets fixed in my mind.
Thanks for that. 😀
I’m picturing a no holds barred contest with biting and scratching allowed though I can’t see the bout going the distance. Both men inevitably succumbing to the slippery steps and tumbling bloodied and bruised into the street below.
The aftermath interviews see each protagonist claiming victory through gritted teeth and offering up tufts of their opponent’s hair as trophies while the SFA appointed referee is sedated by a paramedic.
Ok I’ll concede I’ve got an overactive imagination, but hey it’s Friday, I’m allowed to indulge.
By the way, does anyone know the height and weight of the prospective combatants?
” You’ve failed to address any of the issues concerning precedent: either HMRC behaviour or D&P CVA achievements.
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There are no precedents to address, please explain how they relate to the actual reasons the CVA was rejected, if you have data or guidelines ignored by D&P, then produce them and I will address them.
A question thrown to the floor.
I assume (and if this afternoon has proven anything it is, a little worryingly, how little of the original farrago I can remember in detail) that ‘to newco’ a la Bill Miller meant a questionable transfer of licence-membership thingy (sorry Auldheid) because of the shedding of debt whereas to achieve a CVA a la Dunfermline/Hearts meant that it continued.
On this basis, to newco out was, at the time, unthinkable, one would almost say unachievable. A CVA had to be formally attempted as per Ex pat Bhoy and equally, as per MCFC and others it was doomed right from the start because HMRC do not, as a policy, accept CVA’s that include them getting stiffed whilst others are paid in full.
So, my question is this. Can a newco transfer happen during a season? Is there precedent for this? Was the £4m loss incurred by RFC-old pre liquidation the price that stability in the game until the close season cost? Or was £4m of perfectly good creditors money simply blown on a ‘same club’ cheap stage illusion?
Just asking.
expatbhoy says:
January 31, 2014 at 4:22 pm
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expatbhoy
Sorry I get it now.
You are saying;- (1) the CVA doesn’t even mention footballing creditors (well it does but not in a relevant way); and (2) when HMRC issued a statement of their reasons for rejecting they did not mention football creditors.
The HMRC statement I can see says:-
“A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company’s financial affairs in recent years. A CVA would restrict the scope of such action. Moreover the liquidation route does not prejudice the proposed sale of the club. This sale can take place either through a CVA or a liquidation.
So the sale is not being undermined, it simply takes a different route. Liquidation will enable a sale of the football assets to be made to a new company, thereby ensuring that football will continue at Ibrox. It also means that the new company will be free from claims or litigation in a way which would not be achievable with a CVA. Rangers can make a fresh start.”
That does not necessarily read to me as being a full explanation of why HMRC voted against. There is only one reason given in there – a liquidation allows certain actions to be pursued and a CVA would have blocked them off.
That might have been the only reason. It might not have been. But you are correct – I am wrong to blindly assume that the football creditor issue was a reason.
The CVA proposal says:-
“4.22.6 all consents or other requirements of the SPL and SFA having been obtained or complied with so that Rangers Football Club can continue to participate in such domestic leagues and competitions as it currently participates in.”
I had taken that to mean inter alia football debts paid.
Some positive signings from several clubs in Scotland. I hope I’m not speaking too early but it seems our young talent will be staying too. Fingers crossed. Stevie May looks set to stay as st Johnstone have freed striker Rory Fallon. Best news of all Dunfermline have signed Ross Forbes and Danny Grainger. Hope this is a sign of better financial times for the club.
So, assuming that there are no agreed transfers for any TRFC players later tonight…
The closure of the transfer window will at least bring some clarity to TRFC about any additional cash inflows and reductions to the cost base.
Assuming there is no movement with either: has a critical decision point now been reached by those at the top of the ‘slippery’ marble staircase ?
Can we expect an announcement from TRFC on Monday ?
[To be clear, just idle speculation on my part. 😉 ]
expatbhoy says:
January 31, 2014 at 5:05 pm
o address any of the issues concerning precedent: either HMRC behaviour or D&P CVA achievements.
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There are no precedents to address, please explain how they relate to the actual reasons the CVA was rejected, if you have data or guidelines ignored by D&P, then produce them and I will address them.
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Read my posts and address the issues I’ve raised. Tedious gainsaying is not moving the discussion forward and if you can’t/won’t engage, I’ll leave it there – which you should not interpret at any semblance of acquiescence to your partially formed theory.
Smugas says:
January 31, 2014 at 5:05 pm
So, my question is this. Can a newco transfer happen during a season? Is there precedent for this?
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It can now – Article 36 of SPFL Articles.
I think that this is the point – no one thought you could do a Newco at all (or more correctly that if you did the Newco route it wouldn’t be the same – I can feel I am very dangerous ground re Bonkers OCNC thread here) .
I know that a Newco route was proposed once in connection with a club in the old SFL and the response was – no way – that would be a charter for teams to walk away from the debts scot-free and we can’t have that (even though in practice that is really what happens in football CVAs anyway).
So it was a CVA or nothing really. What happened was that the nothing became the newco route and suddenly the unthinkable became the thinkable, the believable, the doable and then the done. Its just that in my view, it should not have taken months to get there.
But expatbhoy is right – 20:20 hindsight. But I’d like also to suggest that even 10:20 foresight at the time might have saved a few bob.
Testing
Both the old club and the new club have done all they can through their history to show outward signs of being a massive club.
Therefore when it came to matters of lack of cash, they couldnt do what other teams did when strapped. ie tighten bets, firesales, etc etc
Thats for wee teams.
It killed one club, its hurrying along the death of another.
to have no sales, let go’s, backroom staff laid off, even a downgrade from tetley to Asda value tea for Ally’s weekly meetings, nothing has been done to save cash.
And the saddest thing of all, is that a good % of the support will be happy tonight that all’s well
Campbellsmoney
No I think you’re on the money. Old logic ruled out the newco route out of hand. Without going completely bonkers, then 4 months, and £4 million of losses later new logic asked us to completely ignore old logic.