Two wrongs and a right

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Neepheid 5th January 2016 at 9:48 am #What remains of …

Comment on Two wrongs and a right by HirsutePursuit.

neepheid 5th January 2016 at 9:48 am #What remains of my mind has been chewing over the question of whether the Rangers Retail exclusive worldwide licence would survive the liquidation of its owner, TRFC. I believe that the answer to that question is likely to determine King’s next course of action. I can see the point of a liquidation if it effectively breaks Ashley’s grip over retail, but if it doesn’t achieve that, then I really don’t see the point.When you can’t answer a question yourself, find someone who can, is usually a good approach, so I wrote to the very nice people at the Intellectual Property Office, asking whether a licence over IP survives a change of owner.I got an almost immediate response, referring me to The Trade Marks Act 1994, Section 28(3) which states that “Unless the licence provides otherwise, it is binding on a successor in title to the grantor’s interest”.So if TRFC was liquidated, and ownership of the IP transferred, whether to RIFC or another Newco, then the licence for Rangers Retail to use the IP would remain in place.I also learned (from the IPO website) that once an owner of IP licences it, then unless the licence explicitly says otherwise, then the owner has no right to use the IP without the licensee’s consent.
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You are, of course, correct.
I had not properly researched this. I was going to talk about, but then realised that Section 178 of the Insolvency Act applies only to England and Wales. Whilst this section of the Act gives a liquidator south of the border the power to disclaim onerous property, their counterparts in Scotland have no such luxury.
In England, contracts and licence agreements which are unprofitable or would inhibit the realisation of assets would be covered by Section 178. Although RR may have retained rights to use the club’s IP, obligations of the licensor under the licencing agreement – such as restrictions on distribution channels and purchasing unsold stock from the licencee – could have been dropped.
Hilariously enough, had Monsieur Verte de Normandy actually used Sevco 5088, the current IP licensor would have been registered in England.

HirsutePursuit Also Commented

Two wrongs and a right
Another view of the OC/NC discussion.
“Before: THE HONOURABLE MR JUSTICE PETER SMITH- – – – – – – – – – – – – – – – – – – – – Between: Sports Direct International Plc (Claimant)- and – Rangers International Football Club Plc (Defendant)- and – David King (Additional Respondent)

INTRODUCTION 1. On Thursday 10th December 2015 I had before me 3 applications in this matter namely:- 1) The Claimant Sports Direct International Plc’s (“SDI”) application by Notice dated 7th September 2015 inviting the court to find the Defendant (“Rangers”) in contempt of court for breaching the order…

BACKGROUND6. The issue relates to a written Confidentiality Undertaking dated 5th September 2014 given to the SDI Group (comprising SDI and its subsidiaries). It relates to the well known Glasgow football team Glasgow Rangers. The Background to the Confidentiality Undertaking is set out in Mr Forsey’s witness statement provided in support of SDI’s application for the June Order.
7. In summary in or around 2012 SDI was approached by The Rangers Football Club Ltd (“the Club”) which is now a wholly owned subsidiary of Rangers to explore potential commercial opportunities.”
You will note from the above extracts we can see, for the purposes of this judgement, Mr Justice Peter Smith has given meaning to the following words and phrases:
Rangers International Football Club Plc = Defendant
Defendant = Rangers
the well known Glasgow football team = Glasgow Rangers
The Rangers Football Club Ltd = the Club
In each case, he has given a specific definition so that the meaning of these words and phrases in the remainder of the document cannot be mistaken for any alternative meaning in normal everyday life.
While most people would concur with his description of The Rangers Football Club Ltd as the Club, it makes no real difference that I would think of Rangers International Football Club Plc as the holding company that owns Rangers. As long as he is clear (as he is) that he is referring to the PLC as Rangers in his judgement, he is perfectly entitled to do so.
Rangers, from his perspective and for the purposes of his judgement, has the Club as one of its subsidiaries – which is fine.
The point of all of this, is that legal documents and contracts often provide a definitions section (and/or within parentheses) that ascribe specific meaning to words and phrases that could otherwise be misconstrued. It doesn’t change anything in the real world; but should provide clarity within the document to which the definition applies.
Much has been said about how LNS settled the question of whether Rangers, as a Club, continued beyond the liquidation of the legal entity that operated until June 2012.
The Honourable Mr Justice Smith has provided a useful reminder that LNS simply provided a view of the meaning of Club as it applied to the SPL articles and rules (albeit in error, I believe). The commission gave no view on the real life meaning of the word.
Interestingly, I came across a legal judgement the other day where the word “club” was not defined in any particular way: the word was simply allowed its really life everyday meaning.
“The stand had been built about 1909 by the Bradford City Association Football Club (1908) Ltd. In 1983 that company had become hopelessly insolvent and was wound up. The football ground in 1983, including the stand, was taken over by a new club with a new chairman and a new board of directors. This club, called the Bradford City Association Football Club (1983) Ltd is the first defendant in these actions and has to be distinguished from the 1908 Club. I shall sometimes refer to the 1908 Club as the old club and the 1983 Club as the new club.”
So, while some within the SPL (and now SPFL) might wish to believe that the Club continued through a change in ownership, it seems clear that in the real world The Rangers Football Club PLC (now RFC 2012 plc ) was the old club and The Rangers Football Club Ltd (formerly Sevco Scotland Ltd) is a new(ish) club.

As a slight aside check out Bradford City’s website and search for any hint of liquidation. It seems the art of denial is not unique to the west of Scotland.

Two wrongs and a right

Two wrongs and a right
John Clark
TRFC owns assets with a book value greater than its total debt and apparently can pay its bills as they become due, so are not technically insolvent.
You can look at how SDM managed to lose tens, if not hundreds, of millions whilst remaining solvent as the book value of RFC’s assets increased year by year and bank loans and cash from share issues kept the cash flowing.

Recent Comments by HirsutePursuit

Who Is Conning Whom?
I am with you in most of what you say, but there are some important differences.

SFA Article 6.1 & 6.2 say:

Clubs or associations undertaking to promote Association Football according to the Laws of the Game and these Articles and other rules of the Scottish FA may be admitted as registered members, associate members or full members, subject to the provisions of Articles 6.2 to 6.7 (both inclusive).
6.2 A club or association shall be admitted as a registered member automatically by reason of its being admitted as a member of an Affiliated Association or an Affiliated National Association, or in the case of a club through membership of or participation in an association, league or other combination of clubs formed in terms of Article 18 and in the case of an association by being formed in terms of Article 18, provided it is not already an associate or full member. A registered member shall not be a member of more than one Affiliated Association or more than one Affiliated National Association. A registered member may apply at any time to become an associate member.

We are in complete agreement, I think, that SFA Article 6.2 made Sevco a registered member of the SFA from the date it was accepted by the SFL – 14th July 2012.

But, and I think this is important, the nearest the SFA get to insisting that a club has associate or full SFA membership is Article 6.2 which simply says, ‘A registered member may apply at any time to become an associate member.’
Note: no timescale applies… and no consequences (from an SFA perspective) if a club chooses to not make that application.

So I think we are on common ground that Article 6.2 was applicable as far as the registered membership was concerned – and Sevco did not take the opportunity to apply for associate membership by this method.

If we then go back to what the SFL Rules actually said:

6. REGISTRATION WITH SFA A CONDITION OF MEMBERSHIPA Member or Associate Member who is not already a full or associate member of the Scottish Football Association must make application to become a full or associate member of the Scottish Football Association (as the case may be) within fourteen (14) days of being admitted to membership of the League failing which its membership of the League will lapse, and in the event that the application is unsuccessful, its membership will lapse upon that decision being intimated to the League.

Now, if the SFL was being prescriptive about which SFA Article was to be used (to apply for full or associate membership), and that Article 6 was the only valid route, why mention full membership as an option. If ‘application’ is meant to mean only applications in terms of SFA Article 6, the only relevant option would be to apply as an associate SFA member.

No, the SFL rules are not prescriptive in the manner of that application. I think Rule 16 is clearly written to allow a transfer of associate or full membership from an existing club to a new club or entity under SFA Article 14. 

In fact the only method by which this could be achieved is SFA Article 14

14. Prohibition on Transfer of Membership14.1 It is not permissible for a member to transfer directly or indirectly its membership of the Scottish FA to another member or to any other entity, and any such transfer or attempt to effect such a transfer is prohibited, save as otherwise provided in this Article 14. Any member desirous of transferring its membership to another entity within its own administrative group for the purpose of internal solvent reconstruction must apply to the Board for permission to effect such transfer, such consent not to be unreasonably withheld or delayed. Any other application for transfer of membership will be reviewed by the Board, which will have complete discretion to reject or to grant such application on such terms and conditions as the Board may think fit.

…which allows the board to grant an application for transfer of an existing membership on such terms as it sees fit.

Importantly, the discretion only applies to which terms and conditions to a transfer of a membership that already exists.

Having complete  discretion on how or if that transfer (of full membership) took place is completely within the board’s power via Article 14.

What it doesn’t do is empower the board to create a new type of membership. 

And, even if it does claim to have done so, I still don’t understand how the SFA ‘conditional’ membership would satisfy the SFL requirement for an application for associate or full membership?

Remember, this transfer application was an SFL requirement. The SFA had no interest in whether or not Sevco applied for associate or full membership.

It seems to me that the SFA and SFL approached the Sevco scenario in a similar way as they did when Inverness Caledonian were admitted (as a new club) in 1994.

Difference is ICT, the SFL, SPL and SFA all recognise that that club was founded in 1994.

As I said earlier with regard to the birth of Sevco, the deceit is not so much in what they all did, but in what they said and continue to say.

Who Is Conning Whom?
The new club (Sevco) was issued with written permission to use the name of a club in full membership (Rangers).

This was necessary because both existed as SFA member clubs at the time.

Who Is Conning Whom?
This was the nub of the ‘conditional membership’

10.7 Each club in full membership or associate membership shall in its Official Return register its ground and playing field dimensions and no such club shall remove to another ground without first obtaining the consent of the Board. Any club in full membership or associate membership wishing to make any alteration to its name, its registered ground or its playing field dimensions must first obtain the prior written consent of the Board. No club in registered membership shall adopt in whole or in part the name of a club in full membership or associate membership without the prior written consent of the Board.

Who Is Conning Whom?
The 14 day application deadline was an SFL requirement – not something that the SFA had any locus in considering.

As long as Sevco was a member of the SFL it was a member of the SFA.

It would have been up to the SFL management committee to decide if the application for transfer (rather than application for a new associate membership) met its requirements. If it did not, it would have been within its powers to revoke Sevco’s league membership. It is an arguable point, but there is no suggestion, as far as I’m aware, that the SFL league management committee ever met to even discuss the matter.

Nevertheless, I think you are saying that Sevco was no longer a member of the SFL at the time of the SFA statement – therefore needed this ‘new’ SFA membership category to play Brechin.

But how would any type of membership of the SFA help if it was no longer a member of the SFL? If its membership of the league had already lapsed or been revoked, another SFL EGM would have been required to try and vote the club back in. I’m 100% sure that did not happen.

On 29th July, Sevco must still have been a member of the SFL as the Ramsden Cup was only open to members of that league.

There was simply no mechanism for the club to rejoin the league in the available time. If it did not rejoin (and I’m as certain as I can be that it did not) then it cannot ever have been removed as a member of the SFL.

And as I keep saying, as a member of the SFL, it was also a member of the SFA.

The SFA’s deceit was not in its actions – but was in its words.

Don’t forget that the SFA had to consider the use of the Rangers name. The ‘conditional’ membership squirrel has been particularly useful in covering up the SFA board’s approval for Sevco to play Brechin under the Rangers name.

That, in reality, was the big announcement on that day. The rest was sleight of hand.

Smoke and mirrors.

Who Is Conning Whom?
The golf club analogy has been used before.

Dear old dad is a member of St Andrews (other golf clubs are available). To make best use of the facilities new members must apply to a ‘house’ that will give access to their respective lounges and bars. After 15 years of continuous membership Mon pere was awarded the status of ‘Gold Member’.

Gold Members have their own lounge and gain a range of additional benefits. 

Recently poor old dad has become poorly and suggests that l join the golf club and take over his ‘Gold Membership’.

I join the club and, with a letter of agreement from sickly pater, apply for the transfer of his ‘Gold Membership’ status.

The committee meet and decide that I can only take on the enhanced membership status if old pop dies.

I tell them that father is on his last legs and won’t last the weekend.

As an existing member I can enter the club’s Saturday medal competition. On a conditional basis, they tell me I will be eligible to use the ‘Gold Members’ facilities. They issue me with a letter to confirm this arrangement.

They will reconvene in several weeks to confirm the transfer of membership status – assuming that by then papa will be gone. If he makes a miraculous recovery I must then apply to join one of the standard houses.

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