The Draft SPL Financial Fair Play Rules – Pro or Anti Rangers?

In early March Neil Doncaster, the CEO of the SPL, blogged about Financial Fair Play.

He wrote:-

“What does ‘financial fair play’ really mean? UEFA’s explanation, in 2010, was that the concept would require clubs to balance their books over the medium term, not spend more than they earn, and operate within their financial means.

This is all seen as important for one key reason: because any club that is spending more on players than they can afford, is automatically gaining a sporting advantage over every other club it competes with. Whether the precise system of measurement used by UEFA is perfect is a moot point. But the logic behind the principle however is, I think, broadly sound. And it is this same principle that explains the position of the SPL.

To turn a blind eye, to allow clubs to continually fail to make prompt payments as they fall due, would be to allow those clubs to gain an unfair sporting advantage over all those other clubs that pay their players, the taxman and other clubs on time.

Any club spending what it cannot afford is automatically gaining a sporting advantage.

To allow clubs to continually fail to make prompt payments gives an unfair advantage over all clubs that do.

However, Mr Doncaster and his members clubs appear not to feel that the present rules contain enough provisions to prevent the above offences.

Today the SPL announced that on 30 April 2012 the SPL Clubs will consider a range of proposals to amend the Articles and Rules of the SPL. A brief description of the effect of adopting the Resolutions is provided below.  (I have added my comments below each proposed resolution. Until we see the full terms, there will be some speculation, but I will do what I can.)
Resolution 1 proposes an increase in the sporting sanction (points deduction) on any Club which suffers or is subject to an Insolvency Event from 10 points to the greater of 15 points and 1/3 of the Club’s SPL points in the preceding season.

The points deduction was introduced originally because of the sporting advantage seen to exist for clubs getting out from under their debt without paying it back. The idea of an increased penalty is unusual. It is reminiscent of the furore a few years ago when England brought in a system of fines in criminal cases where the penalty was tied not to the offence but to the income of the accused.

I assume that the text of Reg 1 will include a provision dealing with a team which was not in the SPL the previous year and what deduction should be made.

It is quite clear that such a sliding scale has the potential for injustice. Might it be better to leave the penalty to be imposed to an SPL panel? Perhaps so, but only if the SPL was trusted by clubs and fans. Today’s reaction suggests no-one entirely trusts the SPL.

 

Resolution 2A proposes further sporting sanctions in the event that any Club undergoes an Insolvency Transfer Event (i.e. transfers its share in the SPL to a new company where this occurs because of the insolvency of the transferor) of 10 points in each of two consecutive seasons from the Insolvency Transfer Event.

Resolution 2B proposes revisions to the fee payment arrangements i.e. SPL fees to any Club which has undergone an Insolvency Transfer Event will be reduced by 75% in each of three consecutive seasons from the Insolvency Transfer Event.

This Reg seems ripe for litigation. A newco is not in law the oldco. It might have acquired the assets of the oldco, including the stadium, name and colours, together even with players, but it is not the oldco. In law even if all the directors and shareholders were identical, the newco is not liable for the oldco debts. “Phoenix” rules now entitle HMRC to look for deposits towards tax due by phoenix companies. That does not however make the newco liable to pay the oldco’s debts.

A newco might argue that the penalties above are unfair and in breach of its human rights. (Yes, a limited company has legal rights. I won’t bore readers with the reasoning just now.) Even if the Regs are passed by the SPL that will not render them immune to challenge, especially where, by definition, no-one on whom the penalty has been imposed would have voted to accept the rule change.

It is quite permissible for a newco to face conditions upon its entry to the “club” but setting them down in this fashion would lead to an accusation that the SPL had “fettered its discretion” by a flat rate penalty being imposed.

Reg 2 seems to take for granted a transfer of the SPL share to a newco. The SPL rules on this are complex and it is not a straightforward issue.

What happens if the penalised team was relegated anyway in the year of insolvency? Or in the next year? Is it proposed that the penalty continue to the next season in the SFL, or would it sit there, waiting to be applied when the club made it back to the SPL?

What is the definition of SPL money? Does this include TV revenues? With-holding ¾ of the SPL money and a 10 point penalty might seem a recipe to keep the afflicted Club in trouble on and off the field.

As has been pointed out, after the innovation by Duff & Phelps of the “hybrid liquidation” we now have an “Insolvency Transfer Event”. The whole Rangers saga is creating neologisms at every turn!

 

Resolution 3 proposes extending sporting sanctions where an Insolvency Event is suffered by a Group Undertaking of a Member Club of the SPL (Group Undertaking is defined in Section 1161(5) of the Companies Act 2006).

The section quoted states:-

In the Companies Acts “group undertaking”, in relation to an undertaking, means an undertaking which is—

(a)a parent undertaking or subsidiary undertaking of that undertaking, or

(b)a subsidiary undertaking of any parent undertaking of that undertaking.

Therefore if a parent company of a football team has an Insolvency Event, the penalties referred to are inflicted on the Club. In addition, if a subsidiary of the Club enters insolvency, the same would apply. If, for example, Melchester Rovers FC owns a chain of Melchester Rovers Shops through a wholly owned subsidiary, and the collapse of the retail trade leads to insolvency, that would appear to mean that, under Reg 3 Roy Race’s team would suffer a 15 point or more deduction!

This Reg too I can see as being open to legal challenge.
Resolution 4 proposes updates and extensions to the definition of Insolvency Event in the SPL Rules.

I can’t comment until we see how much further the definition is to extend. It was pretty wide to start with. I suspect that it will venture into areas not classically described as “insolvency”.

 

Resolution 5 proposes updates and extensions to the definition of Insolvency Event in the SPL Articles and clarifies the process in the event that a Member which is the subject of an Insolvency Event is required to transfer its share in the Company.

“Clarifies the process” is a notable phrase. One wonders of it is a euphemism for “makes easier”.

 

Resolution 6 proposes a specific requirement in the SPL Rules that Clubs must pay their Players in terms of their Contracts of Service on due dates and places a duty on any Club to report any failure to pay its Players in a timely manner to the SPL.  Failure to pay Players and / or to notify such failure to the SPL would be a breach of SPL Rules.

We have seen how the SPL dealt with this issue with Hearts under the “utmost good faith” rule. They were called for disciplinary action not for delaying paying players, but for not complying with their undertaking to the SPL.

 

Resolution 7 proposes a requirement in the SPL Rules that Clubs report to the SPL any failure to make payments to HMRC in respect of PAYE and NIC (a Default Event).  Any Club suffering such a Default Event will be subject to a Player Registration Embargo.  Any failure to report a Default Event shall be a breach of the SPL Rules.

Reg 7 might be called the “Craig Whyte” clause. However, it would not have covered the EBT’s, as they are under appeal just now, and have been for over four years. In addition, the definition of a “default event” will need to be very precise. Also it appears that VAT payments are not included, nor Corporation Tax (Although few if any SPL teams make a profit leading to that tax being payable.)

Who is going to check?

Will enforcement be a self checking system, as with the SFA’s “mythical” fit and proper person test?

If Melchester Rovers is taken over by unscrupulous businessman Joe Bloggs, who decides not to remit any PAYE or NIC, but to tell the SPL that he is, how will this be checked? Will the clubs have to give mandates to the SPL to make these enquiries directly with HMRC?

If Mr Bloggs does not make his monthly return to HMRC, then it won’t know till after the end of the tax year if the correct sums have been remitted.

Resolutions 2B and 5 require the support of a minimum of 11 Clubs to be adopted; all other Resolutions require the support of a minimum of 8 Clubs to be adopted.

As regards the membership vote needing the support of 11 clubs, would Dunfermline support the change now? Their Chairman knows that, unless Rangers go into liquidation at some point prior to next season’s fixtures being compiled, they will not be relegated. Why would Dunfermline vote for what would effectively be its own relegation?

 

If adopted the amendments to the Articles and Rules will have effect from and including 14 May 2012 (the day after the last day of Season 2011/2012).

No further comment will be made in respect of these proposals until after the General Meeting on 30 April at which they will be considered by the Clubs.

So much for clarity and open-ness!

The new Regs look to be a closing of the stable door after the blue horse has bolted, but been invited back into the best stall, with fresh hay and a new set of horse shoes!

On the other hand, the SPL might be able to say that the fact that everybody, Rangers and non-Rangers fan alike seems to think that the new Regs are biased shows they have the balance right!

I think it is likely that, if these changes get through, there could be further ongoing litigation whenever the sanctions are sought to be applied. Equally there would be more scope for a team to take action if it thought another team was “at it”.

The timing seems odd, especially as the rules do not seem to envisage the oft-mooted changes in financial distribution by the SPL.

Do these changes help or hinder Rangers? Despite what Duff & Phelps say, I think it is a help, as it makes more certain the position for a newco. But we must wait and see.

I will comment later on the fact that Duff & Phelps do not like the proposed Regs ands clearly view them as an attempt to sabotage the sale.

 

 

Posted by Paul McConville

 

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28 Comments

Filed under Football, Football Governance, SPL

28 responses to “The Draft SPL Financial Fair Play Rules – Pro or Anti Rangers?

  1. Auldheid

    I wonder on what basis a decison will be reached that “Oldcos” share can be transferred to “Newco”. What is known about Newco at that point that can give confidence that it will be run by fit and proper persons or that its business plans are sustainable and projections of income and wage expenditure sensible?
    Would they meet SFA club licensing criteria? No three years of accounts for example. So do the SFA need to change their licensing rules, put in place to avoid chancers taking part. Rules that if anything need tightening not opening up?

    Is this a rule where in fact it will only apply to Rangers, maybe Hearts but teams lower down will get the thumbs down because the club coming up is a better commercial bet?

    This is a set of proposals put forward by an organisation whose job it is and whose rewards depend on meeting commercial objectives. They are therefore self serving and cannot go unchallenged by those whose job is supposedly to protect football from itself and its worst excesses and uphold fair play in all its shapes and forms.

  2. MWD

    Don’t kid yourself Paul.

    Duff & Phelps, Rangers, The SPL, The SFA and the govt. drafted these resolutions.

  3. TheBlackKnight TBK

    What happens when VAT, PAYE & NIC aren’t paid for almost a year, (and remain unpaid in the hope these will be disolved by a CVA) running to apx £10M

    Is that an unfair financial advantage?

  4. metanight

    Unsurprisingly “insolvency transfer event” is oddly like “hybrid liquidation” in terms of Google analytics as it shows, beyond the recent mentions in the Scottish press, these terms simply do not exist in the rest of the world.

    I’m not surprised to see the tabloid press have instantly branded the new Fair-Play rules as anti-rangers and seem to have set their sights upon members of the SPL board as those responsible for “endangering” RFC’s precious history.

  5. fisiani

    The SPL proposed changes for a meeting on 30th April are being touted by the mainstream media in typical copy/paste churnalism as being harsh on Rangers. They gush about these changes increasing sanctions.
    In reality they are simply a blueprint to change the SPL rules in order to SAVE Rangers.
    The points sanctions can be made up in month of games! The financial penalties are paltry in comparison to turnover.
    The ramifications are that liquidation no longer means the end.
    They are simply a mechanism to allow a New Rangers to continue to play in the SPL after Rangers are in liquidation.

    The proposed rule changes tolerate not paying the ambulance service or the police.

    They tolerate failure to pay tax.

    They tolerate failing to pay football clubs for transfer fees.

    They tolerate asset stripping prior to liquidation which surely must be illegal.

    Is there an available legal mechanism in Scotland to stop the proposed vote taking place.

    Is there an SPL member who is also a creditor of RFC(IA) who could legally object? (Hearts, Dundee United, Dunfermline, Celtic)

    Will HMRC allow Rangers to be a shining example to every other club in Britain of how to avoid paying taxes and receive only a slap across the wrists?

    Given that this vote is apparently not related to Rangers but a coincidental change to apply to all clubs then there can be no need for urgency for the vote.

    Can an injunction be taken out?

    Can it be tied up in the legal system for months?

    Football is a games of rules.
    You cannot changes the rules during the game.
    The SPL is proposing to change the rules of SPL membership to hurriedly give a lifebelt to a team that has deliberately avoided tax and played ineligible players for a decade.

    They would not do this for an Airdrie or a Gretna they would only do so for a Rangers.

    April 30th is the Scottish Pearl Harbour.

    A day when the SPL on behalf of the Scottish establishment declared war on honesty and integrity in football

    A day that will live in infamy.

    • iain

      Hyperbolic pish. To be expected of course

      This is of course all the other clubs in the SPL (the SPL is the clubs remember, not the SFA, masons or establishment but the clubs themselves) attempting to have their cake and eat it.
      IE have the benefit of Rangers in the league in terms of TV money and travelling fans, whilst ensuring they are unable to compete for several years.

      The proposals are all about self preservation for the ten other teams in the league. That’s nothing new…it’s why the SPL was set up in the first place.

  6. It is actually amusing on a certain level that D&P are saying these changes don’t help. The reality is they are exactly what they need and are delivered exactly when they need them.

    The old boys network strikes again.

  7. I have to admit that I’m getting close to the stage where words totally fail me. The shamelessness of this manoeuvre is so utterly pathological that I’d rather see Scottish football thrown out of UEFA and FIFA right now than have to argue against these self-evidently corrupt and insulting proposals.
    This is so far beneath contempt that Neil Doncaster should have been sacked within seconds of its publication.
    I’ve known for a long time that Scottish football is thoroughly corrupt and if those in charge of the game are absolutely determined to flaunt its complete lack of integrity and moral bankruptcy for all to see then they are certainly going about it the right way. I’m almost past caring now.
    Hell mend the lot of them.

    • iain

      I wonder where all the wailing about lack of sporting integrity were when teams were being refused entry despite having won the first division? Or when teams were benefiting from staying in theleague despite coming bottom?
      No one seemed to care then that the SPL was essentially a cartel set up for the benefits of it’s members and it’s members alone.

      • There was and always has been widespread criticism of the SPL’s attempts to pretend that a Scottish football match played in a half-empty, all-seater stadium produces glamorous, attractive, spectacular television. The foolishness of the requirement for each stadium to have 10,000 seats was regularly pointed out.

        What’s your point, caller?

      • iain

        I would have thought that was obvious.
        That the SPL was set up as a self serving mates club, and remains a self serving mates club.
        These plans are simply another example of all the clubs in the league making decisions that suit them best financially.
        There have been many times this has happened before and there will be many to come.

        As for “widespread criticism” Don’t make me laugh. Barely a ripple before now

      • Best just to leave it there, I think, iain.
        The ramshackle condition of Brockville stadium has got absolutely nothing to do with today’s topic.

    • Got to agree with that, I am actually smirking somewhat after reading the purposed regulations earlier today. After weeks of folk greeting on phone-ins etc. about poor Rangers going into Division 3 etc. the SPL has more or less decided to throw a life-raft in welcoming Rangers back to the SPL no matter what -and at any cost to others.

      My view: that the SPL has basically said, ” all SPL clubs are equal, but some SPL clubs are more equal than others”

      I wrote a piece with my views on it: http://www.garryjbmacinnes.com – wrote it this morning, came on here for a read to find out that Paul had written a similar styled piece. I really don’t see why ANY Rangers supporter is in any way up in arms about this….seriously. It’s a gift horse that makes liquidation look like a great idea.

  8. Althetim

    Paul’s comments make excellent reading as usual. I agree with the opinions expressed in the responses so far and copy a text I sent a few friends this morning.

    Got to laugh at Helpp Ffuds, the MSM and even Sky Sports portraying the SPL’s rule change proposal as a bad thing for the Rangers* (*changed this from the vernacular to aviod causing offence to sensitive types). Anyone with more than two brain cells can see it’s engineered to parachute Newco straight into the SPL with nothing more than a slap on the wrist. A very poor attempt by all involved to disguise the corruption that envelopes scottish football. Time EUFA got involved.

  9. Albert

    Well, if you take a dive in the penalty box, you’ve got to writhe around to make it look good and distact from the crime itself.

    We all know that’s this is all about the “newco” issue, nothing else.

  10. abrahamtoast

    This was always going to happen. These rules will only stay in effect until the next time a club finds itself in bother. The SPL would not be interested in a reconstituted Dunfermline or Motherwell or Falkirk “lowering the standard” of their league.

    So, if any of the other SPL clubs currently in bother, e.g. Hearts, Kilmarnock, Dunfermline, etc., fancy doing this, they need to do it at the same time as RFC (i.e. now) to make sure they are treated the same. What an ideal opportunity for Vlad to get out without harming the club too much!

    The very fact that the SPL think it proper even to propose such a blatantly corrupt “solution” shows up the complete lack of respect for any semblance of sporting integrity in their competition.

    They will claim it is to protect the Sky deal – well, show us what the Sky deal says!!

    I can guarantee there is no clause in the Sky deal which will cancel it if there are not four Celtic v Rangers games. Believe me, that mythical clause does not exist. There may be a clause which would allow SKY to reduce their payment in the event that there are fewer than four, but by the time the SPL take their cut, and the rest is split twelve ways, the effect on individual clubs would be minimal, probably not even into six figures per season.

    Then they will tell you clubs need the money from visiting RFC fans. Again nonsense; RFC are unlikely to be particularly competitive for the next few seasons. As they have unfailingly done in the past, RFC fans will disappear like snow off a dyke as soon as their club stops winning. Added to that there are a fair number of decent RFC fans who are disgusted with their club’s antics, and who will stay away anyway, and a fair number of numpty RFC fans who will stay away from away games because they think the proposals are anti-RFC.

    In any case, far more will be lost because of attendances which will collapse all around the country if this RFC rescue plan goes through. You only need to look at ANY SPL club’s fan forums to see that there is a groundswell against these proposals. Many will not return if RFC is allowed their golden ticket; many have already lost faith and will not return anyway.

    I do hope enough persuasion can be placed on the relevant individuals before 30th April to ensure these proposals are swiftly rejected, although I wonder if the SPL will allow that to happen – what do they have in store for those who vote against?

  11. Bhoywonder

    There are too many black hole scenarios to make these changes workable. They have the potential to be misinterpreted, unrepresentative and open big wide doors to litigation….could this be intentional?….hmmmm

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  13. boldned05

    i have to confess that i have not studied every word of the SPL proposals for change but i think i get the general thrust of it and likewise the D&P response seems intended to convey a particular impression ie. that these proposals are a damned nuisance when D&P are about to unveil the preferred bidder.
    now it seems to me, a mere observer, that the SPL are proposing a scenario that the vast majority of Gers fans would be delighted about; taking away the uncertainty over the future of ‘NEWCO’ by promising that they will walk straight into the SPL.
    this creates two issues of genuine concern. firstlly, methinks D&P protest too much. if this paves the way for NEWCO then why should it put off bidders. is the answer that the bids have run into difficulty and they are stalling before making an embarrassing and negative announcement ?? lets blame the SPL. RESULT !
    Secondly,am i a cynic ? why are SPL motivated to make these apparently unsolicited changes? why , to save the Gers of course. would these changes be proposed if any other club was in difficulty? im sceptical. of course, there is a punishment element to the proposals. why bother (other than for appearance sakes ) since the punishment in no way fits the crime or the morally bankrupt way in which one of their member clubs has been operating, to the detriment of the others. conclusion- collusion with D&P and a sham ?
    scottish football is a laughing stock again.

    perhaps

  14. pc

    Posting again because I typed the wrong email. Apologies.

    “the SPL might be able to say that the fact that everybody, Rangers and non-Rangers fan alike seems to think that the new Regs are biased shows they have the balance right!”

    - I take issue with this. The Rangers fans’ mentality is such that they have no idea of the level of institutionalised bias towards their club. It is so ingrained they are unaware of it and when there is any semblance of balance they cry it is anti-Rangers.
    Just look at say, the treatment of Alex Thomson. He has been impartial but being so means one cannot help but say negative things about Rangers and their conduct. The result is that they think he hates Rangers.

    Look at their reaction to criticism of Whyte when he took over.

    Look at their reaction to Mark Daly’s documentary.

    Look at their claims about the SFA ‘not doing anything to help a member club’.

    They have been collectively conditioned to believe grandiose nonsense about their club and feel entitled to preferential treatment without even realising it.

    • Bhoywonder

      ….as a nearly lifelong Celtic fan, following a spell with my childhood heroes (every other weekend away from All Saints Primary, Albion Rovers of Coatdyke, or was it Coatbridge?which staged my other passion, stock car racing) I have always been seriously annoyed by RFC fan’s going on about our “paranioa” and “conspiricy theories”…..although we are now totally justified, I’m glad to see the other side subjected to the same….what goes around comes around.

  15. I’m having further thoughts on the proposals, particularly the second resolution, in so far as it seems to me that it introduces some measure of penalty where none previously existed.
    The SPL is not part of the SFL and there is no automatic right of entry to either group.
    It appears to me that if the SPL were to choose to invite, say, Beith Juniors rather than Ross County to participate in the 2012-2013 competition, there is nothing that County could do about it. Likewise, it appears to me that the SFL is free to decide not to offer Dunfermline (or whichever club is eventually relegated from the the SPL this season) a place in Division One.
    They are completely separate organisations with entirely different, mutually exclusive memberships. A club’s ability to move from one to another is subject to approval so acceptance of an application to join is not automatic.

    Separate from the procedure which regularly enables the admission of the SFL champions into the Premier League, there is already another mechanism for the SPL to pass one of its 12 membership shares from an existing member to a new one club. The new member would accordingly start its first season in the SPL on the same footing as the eleven clubs.

    What the new resolution seems to be attempting to introduce is a degree of deterrence so as to discourage clubs from scuttling S.S Failed Business Model, piling the assets onto a lifeboat, boarding a newly commissioned S.S. Newco, repainting the livery and continuing on their voyage. It’s a relatively mild deterrent in the case of a club which has been known to win the championship title by a margin of more than ten points.
    But if Rangers Newco is invited to join the SPL in the future under the present rules, there would be a considerable temptation for Kilmarnock Newco and Hearts Newco, to name but two possibilities, to follow the same course.
    I now feel that Resolution 2 appears to be addressing that scenario rather than the immediate crisis at Ibrox.

  16. SouthernExile

    Things we don’t yet know

    As we move towards the denouement my mind is moving towards the unsolved riddles in all of this. This is a starter for ten, would be grateful for contributions from others. It is skewed towards issues of corporate malfeasance rather than football matters (last time I was at a match was Fir Park in c. 1970…we were playing Dundee United and got gubbed…. DU were a decent side at the time, it was only a few years since they had beaten Barcelona home and away…ah nostalgia, but I digress!).

    1. What induced Ticketus to part with 24m quid?
    2. Who if anyone holds a floating charge over what and how much is it worth as a secured creditor in liquidation?
    3. What are the double entries in the accounts of group and the company wrt season ticket holder rights, Ticketus money and the Lloyds debt?
    4. What are the debits and credits in the CB client account?
    5. To what extent to these accord with the deed that CB signed at the time of the share sale?
    6. How much is missing from Pritchards client account and where has it gone?
    7. Who transferred £3m from the Worthington Group pension fund and why might it be in the CB client account?
    8. Who has been acting in league with who throughout?
    9. How much has the GEF already siphoned off from the deal and hence how much does he care about getting more?
    10. How many are going to land up in the clink?

    • 1. Ticketus would happily part with 24million if they were under the impression that they were guaranteed their money back, including their considerable profit. Time and time again both Ticketus and Craig Whyte appear to be certain that Ticketus are guaranteed their money. Personally, i don’t think that they are……in-fact, I think Ticketus have been rather nieve in their own greet in supplying Rangers with such cash.

      2. Apparently Craig Whyte holds a floating charge over Rangers. I cannot remember the exact figure but it was somewhere in the region of £20-30 million. If a floating charge is in place, then in the case of liquidation it would be worth exactly that value; or as close to as possible.

      For example, should Craig Whyte hold a floating charge over Rangers to the tune of £20million and liquidation raised a total sum of £21million then Craig Whyte would get the first £20million of that with only the remaining £1million to be split between the remaining creditors.

      10. Probably none. Somewhere alone the line you will find that rules have been exploited but I am almost convinced that no laws will have been broken to the extent that prison will be the outcome.

      • SouthernExile

        Gary
        I’m not a lawyer, but as best I understand:

        1. Ticketus gave the money to an organisation which was generally perceived to be deep in the financial doo-doo. A judge has ruled that their rights are contractual rather than “real” i.e. If the ownership in the seats transfer to a newco they are stuffed and only have recourse to oldco as a creditor. Paul and others have speculated that their lawyers will be checking the details of their PI insurance!

        2. The floating charge does not have a specific value, it means the holder has first dibs for what he is owed as a creditor. Group paid off 18m of company debt but company gave/sold/transferred 24m of ticket rights to group. I think this is fiendishly legally complicated – Paul we need your help!

        10. I’m not often in Glasgow but will come up and buy you a dinner at your choice if you’d right!

        • yes, excuse my wording i was attempting a laymans explanation by example rather than exactatudes.I have written at length on floating charges and similar. A Floating charge does not necessarily have a fixed value at all as you say, and indeed it is useless per say until it crystalises or in this case Rangers go into liquidation. Nor is it help by a person, but rather a company.It also only involves assets, or equity as such and what the company owns at the time of liquidation – not previous assets.

          You could go on for a while about floating or indeed fixed charges – they are interesting subjects.

          As for the ‘Ticketus’ situation – I have yet to hear a convincing argument from them to suggest that they do indeed have any security over the money that they have lent. You are correct to say that they do not have any claim to season tickets of a ‘newco’ because quite simply: it is a new company. Debt does not follow one company that has ceased to exist and reformed, no mater how similar (or identical) that they may look.

          Were Ticketus perhaps ‘duped’ like Murray et all by Mr. Whyte? I shall leave that as it is. There does appear to be a great deal of nievity on the behalf of ‘Ticketus’ – for nievity see ‘stupidity’ but of course that is only my own opinion. My first replay as to why ticketus entered into the deal with Rangers was to tow the party line so to speak, and repeat the reasoning of ‘Ticketus’ as such. Perhps i should just have given my own opinion to start with. ‘Negligence’, ‘Stupidity’, ‘nievity’. Take your pick really.

          As for you reply, i know that it may appear unlikely but I honest do not see anyone going to Jail on any of these matters – no matter how unjust it may seem. My basis for this argument is simple: Craig Whyte (and associates) have made a living out of such dealings without ending up on the other side of a locked door, therefore I am sure they are very well aware of exactly what they are doing.

    • SouthernExile

      Paul
      I’d like this to go out to a wider audience but the RTC moderator has taken against me. Could you forward it on if you think it has merit?

      Thanks

  17. Marching on Together

    As to whether there would be litigation in respect of Rules 2A and 2B, there has already been a parallel case in England, when Leeds Utd went to court to appeal against the imposition of an additional 15 point penalty imposed under the “exceptional circumstances” rule in transferring the Football League’s golden share from oldco to newco. Briefly, Leeds could not come out of administration using a CVA because HMRC had gone to court to block it (for reasons largely unrelated to Leeds), and knew that if they delayed the CVA beyond the start of the new season, Leeds would be thrown out of the Football League. Hence the non-CVA exit from administration, were the creditors were actually paid more. The Football League agreed the share transfer on condition of acceptance of the 15 point penalty, and eventually Leeds went to court to get this over-turned. Although the court’s decision was deficient in many respects – e.g. no consideration was given to the fact that the initial appeal was to the general meeting of all Football League clubs i.e. their direct competitors with a vested interest in refusing the appeal, thus breaching all rules of natural justice – the appeal was refused, largely on the basis of it being lodged too late, but the judge opined that the Football League could impose whatever conditions it wished in its membership rules for agreeing to such a transfer, and clubs had to accept these rules if they were members.

    So long as the SPL agree any rule change in the correct procedural way, I can’t see a legal challenge being successful.

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