Neil Doncaster – CVA and Newco – What’s The Difference (As Long as Newco Accepts Oldco’s Punishment?)

 

In which I discuss Neil Doncaster’s views as expressed in the Scotsman today regarding a newco and a CVA for Rangers. He maintains the line, with which I disagree, that CVA and newco are basically the same. His position on that seems designed to make non-Rangers fans fear the worst about some cosy accommodation being reached.

However, for those concerned with sporting integrity, he includes a killer line, which, if followed through, will leave a newco Rangers with a very hard decision. Accept penalties for past rule breaches by oldco, or accept that newco is a new entity, without the history and titles of oldco.

It would be helpful if the SPL and SFA could disclose what they are talking to Mr Green about, in the same way as it would have been helpful to find out, in the spirit of “transparency and clarity” what Mr Miller discussed with them.

—————————————–

Neil Doncaster is the Chief Executive of the SPL. Yesterday he invited a group of journalists along to Hampden to explain why he believes a “newco” Rangers should be in the SPL.

I have extracted the quotes below from the Scotsman piece which can be read here. The article itself, though not by-lined, seems to be sceptical of Mr Doncaster’s views. It is worth a read.

Mr Doncaster discussed these issues at length in a BBC Sportsound interview. I transcribed it in full, and it can be found here. However, I have still not had the chance to comment on it in full. This will operate then as a précis.

However, to deal with Mr Doncaster’s quotes, I have noted them below and commented in bold beneath.

—————————————–

Doncaster admits to being “baffled” that in this country such a distinction is drawn between Rangers exiting administration through a company voluntary arrangement [CVA], as prospective new owner Charles Green will attempt in the coming weeks, and doing so by moving the assets to a new company [newco] as the old one sinks because of debt, as he probably will be forced to do to effect a successful purchase.

Mr Doncaster is a former solicitor. He moved from the law into running sporting organisations, including a stint as Chief Executive at Norwich City (where he also predicted doom and disaster, earning the nickname, I am told, of “Doomcaster” from the Canaries’ fans). You can read about that here.

 He therefore will be well aware of the law on these matters and his football experience will have informed him as to the strength of opinions amongst football supporters. If he finds himself baffled by the distinction between a CVA and a newco, then it would appear that he is either being disingenuous or has forgotten what he learned in Insolvency Law for Beginners.

I will try to put it simply.

In a CVA, creditors of a company receive payment, by agreement of a sufficient majority, to satisfy their debts, even though these are not paid in full. The primary purpose of administration is to rescue a company as a going concern, in the interests of the creditors. If that cannot be achieved, the second purpose of administration is to get a better result for creditors by administration than by liquidation.

The second purpose is what a “newco” idea seeks to fulfil. The assets of the company are transferred to a new entity, or at least an entity which did not own the assets previously.

In the case of a successful CVA, the company continues. Therefore the “Rangers” formerly owned by Mr Marlborough’s companies passed on to Murray International and thence to Wavetower (Mr Whyte’s company) and would, in turn, go to Mr Green’s consortium. The existing football team continues, and would retain its history, whilst having to answer fore the alleged misdeeds of the former owners.

There will not be a successful CVA. Mr Green’s colleague, Mr McDonald, committed a PR own goal by talking about the warchest stuffed with money which would be given to the manager to buy new players once a CVA takes place. Whilst that might have gone down well with the fans, as I am sure it was meant to, it can only have hardened the view of HMRC to reject any CVA.

I won’t analyse why in detail just now but will simply say that the funds talked about would mean that HMRC would only receive a fraction of the £13 million unpaid by Mr Whyte since he took over and this being money Rangers has since spent on things other than tax. HMRC would get nothing from the Big Tax Case, nor indeed from the Wee Tax Case. Whilst a Green Rangers would not be a phoenix in strict legal terms, the insistence that this is in fact the same old ‘Gers would render it disastrous for HMRC to be seen to accede to a CVA at the levels of funding being talked about.

Maybe Mr Green would like to do a CVA but, as with Bill Miller’s plan, the only one that makes business sense is to buy the assets and leave the debt behind.

Therefore we come to a newco. The clue is in the title. This is not just a change of ownership, as in Marlborough to Murray to Whyte. This is a new entity. The SPL Rules require a Club to own its own ground, or have it owned by a related company, or otherwise have a binding legal right to play there.

At present, we think, Rangers Football Club PLC (in administration) owns Ibrox. That therefore by SPL Rules, is the Football Club. If the assets of that Club are sold to an unrelated company “Green Rangers Ltd” then that company will become the owner of “the team”. The SPL Rules make clear that the Company = the Football Club. Ergo newco is not “Rangers” as presently existing. It could be a new “Rangers” but would not, either in law or in the SPL Rules, be a continuation of the present club.

Mr Doncaster, at the foot of the article tries to cover his bases with a clever argument, which might just work, and I will come to it when he does.

To recap, a distinction is being drawn because there is in fact a huge difference between a CVA and a newco. In any event, once a newco acquires the assets, the oldco will be wound up or liquidated. It will cease to be.

 

A newco, he says, could raise more money for creditors than a CVA. He could give no examples where this had ever occurred in football. However, the SPL chief executive did provide examples from England, with the cases of Luton, Bournemouth and Rotherham, where clubs have failed to obtain a CVA, set up a newco, and retained their same league status, but with a points penalty – as will be one of the new financial fair play proposals clubs will have a third go at voting on come 30 May.

“A newco could raise more money for creditors than a CVA”. I could win the 100 metres at the Olympics. I don’t think that even Duff & Phelps have tried to argue that (the newco/CVA issue, not my sprinting prowess). What that has to do with the question of continuation of the Club, I do not know.

 

Rules governing insolvency events at football clubs should not be determined by the “attitude of creditors”, argues the SPL chief executive, who balks at the notion of “admitting” a new Rangers. “The football club will continue to be there [in the SPL]; it’s only the corporate entity that changes. The matter for debate is on which basis the club’s football share is transferred to that new entity,” he said.

Let’s imagine for a minute that oldco Rangers had managed to complete and lodge accounts and a UEFA Licence application prior to 31st March this year. Would “Rangers” be entitled to play in Europe in season 2012-2013? If the newco is still a continuation of the Club, then of course it should (and if the newco had actually been in existence for three years, even if only making widgets, there would be no reason to stop it playing in Europe, if Mr Doncaster’s analysis is correct).

That cannot be right, nor would UEFA countenance it. It would make a travesty of Financial Fair Play rules. However UEFA rules require the club to have been a member for three years. It seems to be accepted that newco Rangers will have three years outwith European competition. Therefore newco does not equal Rangers. QED.

Indeed, if Mr Doncaster’s view was correct, a newco could take legal action to force the SFA to permit it to play in European competition. At the same time, legally, the newco could refuse to acknowledge any penalties which were the fault of oldco.

Rules governing insolvency at football clubs should be determined by football authorities. Mr Doncaster has talked about Financial Fair Play and the gaining of unfair advantages. He seems to think, on his analysis, that a 10-point penalty for writing off £100 million of debt is acceptable and proportionate.

 

Doncaster said: “All I can say is that we will continue to deal with clubs equally under the rules. Our job is to apply those rules, equally, without fear or favour to every single one of the 12 member clubs. It’s our job to explain that what we are doing is treating people equally. If everyone understands that then, what will be the reason to be aggrieved about the outcome? Every club will be treated exactly the same. I can’t get into ‘special cases’.

If this is so, why did the SPL clubs agree to D&P’s request for a postponement of the last rule change meeting? Why did he say he wanted clarification of the position from Rangers before the vote? Surely the individual circumstances of one member should not impact on a decision treating everyone equally. The suspicion that the new rules will not come in till Rangers are dealt with under the old ones is a reasonable one to have, even if that is not the SPL intention.

 

“Whenever I speak to people about the distinction between a CVA and a newco what I keep being told is that it’s simply wrong that any club should be able to create a newco and shed debt. As if a CVA doesn’t lead to the shedding of debt. Administration is the protection the court gives you when you can’t pay your debts. There are two ways out of that; one is a newco, one is a CVA. Of the six administrations which have happened down south in recent years two went with a CVA and a newco, Palace and Plymouth, and there were four where there was no CVA and a newco.

Actually administration in Rangers case was initiated by Mr Whyte and the court only appointed D&P because they had failed to inform the FSA thus rendering their appointment arguably void.

There are more than two ways out of administration. A company can be “rescued” and by investment or trading pay off its debts in full. Alternatively a company can fail to achieve the purposes of administration and end up wound up or liquidated.

The various English cases cited by Mr Doncaster all have their own individual circumstances, and my plan is to go through them in depth in the future, when time permits.

 

“The distinction between the two is relatively fine. To draw such a huge distinction is just wrong. When Livingston were relegated to Division Three did they cease to exist and start again? Of course they didn’t. Leeds are the same. Every single club which has had an insolvency event has either continued as a football club or has ceased to exist. I’m not aware of any club which sort of started again. Of course it’s not okay to waive £90 million of debt, of course it’s not. But it happens. In football as in business.”

It is huge distinction, as described above. Livingston were penalised by relegation to the lowest division, and exited administration via a CVA.

Mr Doncaster says that waiving £90 million of debt (such an airy dismissal) happens in football, as in business. But football is not business, or at least that is what the fans think. No one amongst club owners apart from Fergus McCann has made a significant profit from Scottish football for years. There is a spirit of mutuality in sport which does not exist in business. In business, the sole goal is to make profit, and eliminating competition on the way is part of that. In sport, putting your competitors out of business means you have no one left to play against!

Mr Doncaster knows that football is in a precarious financial position just now. How much more so if the biggest debtor club in the land walks away from its debt?

Will Lloyds, which is the banker, I understand, for all of the SPL apart from Celtic, Hearts and Rangers, insist on getting its money back now? Will it demand that any money from player sales go to pay off bank debt? Will it fear other SPL clubs “escaping” by the CVA route?

Who in their right mind would be willing to provide debt funding to an SPL club, except at punitive interest rates, standing the risk of the club waiving the debt, with few sporting sanctions?

Or is the plan that, conveniently, the new and draconian punishments will come in following Rangers “escape”?

 

Any punishments arising from the SPL’s ongoing investigation into non-disclosure of payments to players at the Ibrox club between 1998 and 2010 would be imposed on a newco. “You would expect the football club to take with it responsibility for anything that emerged from that investigation,” Doncaster said. The SPL chief executive would not enter into discussion over … the manner in which (Rangers) administered an … Employee Benefits Trust scheme… Former owner David Murray admitted the club paid appearances and bonus money into EBTs to shield them from tax but didn’t divulge these transactions to the authorities because they were “discretionary”, despite the fact all payments are covered in the SPL rules.

At the end though we have what might be the most important part of the whole article, and that which may well redeem Mr Doncaster’s reputation.

I will repeat the line:-

“YOU WOULD EXPECT THE FOOTBALL CLUB TO TAKE WITH IT RESPONSIBILITY FOR ANYTHING THAT EMERGED FROM THAT INVESTIGATION,” DONCASTER SAID.

So for all the cosy chats with Bill Miller, and now with Charles Green, it seems to be the SPL position that the ongoing “payments” inquiry by the SPL will continue, and any penalties for this will be meted out to newco.

This would pose a huge problem for Mr Green and his colleagues. If newco wants to remain in the SPL as Rangers, then it must accept the penalties. Whilst the SPL cannot punish the newco for the sins of the oldco, it can set conditions for admission.

If newco challenged this on the basis that it was a penalty relating to mis-deeds by someone else entirely, then necessarily newco would have to disown any connection with oldco. Whilst the fans might claim a continuation of the club, the owners would have to deny it.

The penalties for such a long-standing breach of the rules, if established, would have to be at the top end of the scale. Expulsion would not be disproportionate.

This raises one final matter of concern. Mr Green is not going to spend millions of pounds buying a football club, only to see it expelled from the League for the dealings of his predecessors. He is either a gambler par excellence, or has reason to believe that (a) there will be no guilty verdict and thus no penalty (b) that the penalty will fall short of something which would cripple his investment or (c) he has no intention at all of accepting any oldco penalty on newco.

I am not, despite what people might think, a believer in overarching conspiracy theories. However, in the interests of clarity, could Mr Green or Mr Doncaster tell the public what they have been discussing?   

 

Posted by Paul McConville

About these ads

90 Comments

Filed under Administration, Football, Football Governance, Rangers, SPL

90 responses to “Neil Doncaster – CVA and Newco – What’s The Difference (As Long as Newco Accepts Oldco’s Punishment?)

  1. We can expect the usual suspects to be ramping up their campaign to have a new company being thought of as the same entity as the old one in the coming weeks, to preserve ‘ra tradishuns’.

    All I ask is that the rules in place are applied. When the huns are liquidated, the number of relegation places is to be reduced by one. That’s in the current rulebook, and it simply needs to be applied.

  2. beanos

    A great analysis of the situation.

    What is clearly happening is that rather than assessing the facts and drawing conclusions from these facts, Doncaster has already decided what the desired outcome is and is attempting to manipulate the situation to achieve his this outcome.

  3. Hugh Jarse

    Paul, when you go through the circumstances of the English Clubs mentioned I think you will find that every one of them AGREED A CVA.

    The only Clubs I am aware of that failed to exit administration via CVA are Gretna, Airdrieonians, Chester CIty and Rushden and Diamonds.

    Will add more as I find the relevant information.

  4. Hugh Jarse

    Leeds United was extremely complicated but in the end they did actually agree a CVA with 75.2% of the creditors which went through when HMRC dropped their appeal.

    • I thought that the CVA that was agreed as a result of that vote did not – in the end – go through.

      As I said elsewhere:

      On 31st August 2007, the Yorkshire Evening Post reported that HMRC had announced that they were withdrawing their legal challenge to the Leeds United CVA. They reported that the challenge related in part to the voting process used at a meeting on June 1, when United’s creditors backed a CVA deal to resell Leeds. They continue, reporting that this legal challenge led the administrators (KPMG) to scrap the CVA and put the club up for sale on the open market. In withdrawing the legal challenge, HMRC said that it was not because they finally agreed to the CVA, but because, in their words its legal challenge had become “academic” when the CVA was ditched in early July.

      The JULY vote ended with, as you say, with 75.20% in favour of Bates. Just before the end of the 28 day period HMRC challenged the CVA. KPMG then sold Leeds to Mr Bates, the without the club going through a CVA under the “exceptional circumstances rule”. This was why they got their 15 points deduction.

      Here is the Yorkshire Evening Post Article:

      http://www.yorkshireeveningpost.co.uk/leeds-united-news/Taxman-pulls-out-of-Leeds.3163456.jp

    • Marching on Together

      No, although the CVA was agreed as you say, and eventually HMRC did drop their appeal, by that point a new deal had been done involving the transfer of assets to a newco, which paid football creditors 100% and gave more to ordinary creditors than the CVA. Because Leeds did not exit administration via a CVA, Football League rules allowed them to agree the transfer of the golden share in “exceptional circumstances”, subject whatever penalty the FL saw fit to impose. This was a 15 points penalty, or exit the Football League.

      The Leeds case is the closest to date to the Rangers situation and merits closer study by those predicting the future for Rangers.

  5. Duplesis

    The English examples are helpful up to a point, but it has to be remembered that it is part of the English FL insolvency rules that – except by special dispensation – the so called “golden share” won’t be transferred from an oldco to a newco unless oldco has agreed a CVA. (This special dispensation was granted in the Leeds case where HMRC were objecting, for example, and the share transferred without a CVA . HMRC subsequently withdrew their objection and a CVA was agreed, but that was after transfer of the share.)

    There is of course no equivalent rule in Scotland, and subject to UEFA licensing issues, the power to transfer SPL share and SFA membership lies in the discretion of the respective Boards.

    What the English examples show – like it or not – is that if the so called “golden share” transfers, there is taken to be a continuity of the club between oldco and newco.

    Incidentally, as a Rangers supporter, I entirely agree with Paul that in the footballing context if a Rangers newco wants that continuity, the newco will have to accept any footballing punishments imposed on the Rangers oldco.

    I understand that the SFA have already made it clear that would be the case in respect of the registration embargo, and I would expect the SPL would do the same should the SPL inquiry find there to be anything in the “payment outside of contract” allegations.

  6. hooped1988

    another brilliant explaination

  7. “You would expect the football club to take with it responsibility for anything that emerged from that investigation,” Doncaster said.

    I don’t take much encouragement from Doncaster’s angle there. The wording is limp and leaves far too much wriggle room for an “unexpected” alternative scenario.
    I know what I expect without needing to hear Neil Doncaster second-guessing my expectations.
    I expect professional football competitions to be organised in such a way that the paying customer has no reason to believe that the product is not fixed, rigged, pre-determined and corrupt. So far my expectation is unfulfilled.
    I expect glaring breaches of the principles of integrity to be unequivocally condemned in the strongest possible terms. I expect an uncompromising imposition of the most merciless punishment of parties which deliberately undermine the sport’s fundamental integrity. I expect the focus of the game’s administrators to return time and time again to defending the honesty of the sport as its sine qua non. These expectations all appear to be in vain.
    A football club’s recognition of the primacy of the need to be seen to be enthusiastically committed to fair play is the least that I would expect but it is singularly absent from the stance of successive Rangers representatives. I would expect a man in Neil Doncaster’s position to draw attention to that critical inadequacy and re-emphasise that there is no place in the game for cheats. Mr. Doncaster continues to fall well short of that expectation.

    There is one expectation which I do believe will be fully realised. If Mr. Doncaster’s spineless approach to this acute crisis of integrity is an indication of the prevailing attitude among the game’s guiding lights then I expect the total destruction of what is left of Scottish football’s reputation.

  8. Ken

    Those in the Rangers camp seem to want to cherry-pick what elements they desire in a newco
    1) Preserve the history/legacy
    2) Leave the debt behind
    3) Leave the SFA (& yet to be determined SPL) penalties behind with ‘oldco’
    4) Inherit the SPL share
    5) Be immune to newco requirements for UEFA competition (i.e. 3 yrs)
    6) Immunity from the floating charge
    7) Cancellation of the Ticketus contract

    Some of these lofty goals are blatantly contradictory.

    • Duplesis

      That’s a bit of a sweeping statement to be fair.

      Speaking for myself, what I want from your list is (1) and (4) – which is in accordance with previous examples of clubs who have newco’ed.

      (2),(6) and (7) are legal conseqences of a successful asset sale to a newco, and aren’t contradictory to (1) and (4) at all.

      Logically, if the club newcos, the club has to continue to accept the penalties in terms of (3), and of course the UEFA licensing requirements referred to at (5) will apply.

      • Ken

        A newco is exactly that – a NEW company. Therefor 1 is quintessentially not possible.
        4 should not be considered a given right for a new company – indeed why it should be considered at all is unfathomable from a sporting intergrity perspective.

  9. Duplesis

    @ Ken @6:43pm, you’d better tell that to all the clubs who have newco’ed and kept their history in the EFL then…

    • Hugh Jarse

      And who are these clubs?

      • martin m

        Duplesis, read the above re luton etc if the club does not obtain a cva it is entirely a new co… once rangers fc disolve the history dissolves, simple as that.. its a new club / new company the miller plan was to cva old co and merge !! any club in EFL who have newco’d and kept history have CVA’D ALSO !!! THIS IS A FACT why would they even attempt a cva and go this route if they kept history just doing a newco ?? everyone knows it but once again Rangers fans fail to accept the real world !

      • Duplesis

        Most of the clubs you referred to above in fact newco’ed.

        As is very common in England, there is an asset transfer to a newco, and the payment for that transfer is then used by the oldco to arrange a CVA. As I’ve explained above the English FL requires oldco to achieve a CVA before it will agree to the transfer of the “golden share” except in exceptional circumstances. There is no such requirement for the transfer of the SPL share or SFA membership in Scotland.

        Leeds though is a good example of the golden share being transferred even where a CVA had not been agreed by oldco. HMRC did eventually withdraw their challenge to the CVA, but that was after transfer of the share.

      • Hugh Jarse

        Duplesis you have that entirely back to front. In the English cases referred to the Club agreed a CVA and afterwards a takeover by a new company occurred. This is not the the same as the Newco arrangement being talked about for Rangers

        It is not unusual for a new company to take over a club, itbappens every time theres a takeover e.g. It happened at Rangers when Whyte’s company acquired Rangers from Murray – the crucial difference being that the company was not in administration at that time.

      • Duplesis

        @ Hugh Jarse at 9:16am

        Hi Hugh, sorry – but I’m afraid it is you who is misunderstanding the position.

        It’s trite to say that takeovers happen, and I am well aware of the difference between the shares of a company being bought and a sale of the assets from the oldco to a newco.

        Almost all of the examples you refer to were not takeovers though, and if you look behind the headlines a bit, you’ll be able to see so for yourself.

        In fact, what happened was that there was an asset sale to a newco – not a sale of the oldco. The oldco was then left to wither and die.

        Take a look at Leeds, for example. The Leeds company was The Leeds United Association Football Club Ltd, formed in 1920 with company number 00170600.

        The current Leeds Utd company is different, it is Leeds United Football Club Ltd, formed in 2007 with company number 06233875.

        The 2007 company bought the assets from the 1920 company whilst the 1920 company was in administration. The “golden share” of the 1920 was amongst those assets, and was allowed to be transferred even though the 1920 had not at the time agreed an unopposed CVA.
        If you go and check on Companies House, you will find that the 1920 Leeds company then went into liquidation in 2008.

        Leeds are not the same company as they were.

        Another of your examples was Plymouth Argyle. Again, what happened here was that a newco acquired Plymouth oldco’s assets including the “golden share.” In Plymouth’s case however, the oldco did agree a CVA.

        The original Plymouth Argyle company was The Plymouth Argyle Football Company Limited, formed in 1910 and with company number 0110819. It is not trading, and is overdue to lodge accounts and Returns. It will almost certainly be subject to a strike off application in due course.

        Plymouth Argyle’s assets were bought by Green Pligrim Ltd, formed 2011, company number 07796376, which subsequently changed it’s name to Plymouth Argyle Football Club Limited. This company now runs the club.

        Plymouth Argyle are not the same company as they were.

        Crystal Palace have had numerous newcos. Most recently, they were a company called Crystal Palace FC (2000)Ltd (which itself replaced a company called Crystal Palace FC (1986) Ltd, which was dissolved.)

        Crystal Palace FC (2000) Ltd, company number 03951645, does not trade, and is overdue with its accounts and returns. Once again, it will no doubt shortly be struck off.

        Crystal Palace are now operated by CPFC Ltd, formed 2010, with company number 07270793. Again the oldco in the crystal palace case managed to obtain a CVA (in the case of the 201o newco’ing at least, I’m not sure about the 2000 newco’ing.)

        Crystal Palace are not the same company as they were.

        There are many, many, more examples in English football of assets sales to newcos which include the transfer of the golden share to the newco, and leave the oldco a dead shell. It is a relatively common practice to allow clubs to exit administration there, and is uncontroversial.

      • Duplesis

        Just to underline the point, I’ve had a look at the Administrators’ report in the Plymouth Argyle Administration case (this was lodged 19th March 2012, and can be downloaed from companies house for £1)

        The report confirms that there was a sale of the business from the oldco to the newco on 31/10/11 (6.17.) It also confirms that it was a condition of that sale that the “golden share” in the league be transferred to the newco, and that this happened (7.1 and 7.2)

        Perhaps most interestingly from the point of view of my discussions with Hugh Jarse, the report also confirms at para 9.1.2 that the expectation is that the Plymouth oldco will now be wound up by HMRC .

        To be clear, in the Plymouth case, as in the Leeds case, there was not a takeover of the old company. There was an asset transfer to the new company, and the oldco was left “carved out.”

    • Marching on Together

      martin m

      “once rangers fc disolve the history dissolves, simple as that” Not true if the fans don’t want it to be so. While the corporate structure of the body owning Rangers will have changed, its heritage and history are still there. Any case where a newco has been used in an insolvency event in England, the fans are adamant that the heritage and history goes with the name e.g. Leeds Utd, Bristol City, etc etc.

      AFC Wimbledon are the rightful heirs to the history, trophies, honours and heritage of Wimbledon FC, not MK Dons (even though that is the same corporate entity I believe), and that it is recognised by the football authorities, both clubs, and all the fans.

  10. duggie73

    Sorry about the length of this- skip to the last line if you’re pressed for time.

    There is a distinct possibility that Green inc. has no overwhelming interest in running a football club and the bottom line is to make money, which is quite achievable by cashing in on the assets bought at discount without the bother of having to run a Scottish football club profitably.

    That aside…

    A vote on the share transfer comes down to judgement, not the strict application of rules.

    Doncaster’s position (if it’s worth calling it that) is somewhat irrelevant as the share transfer vote looks like needing the clubs’ assent, and it would have been completely irrelevant if the SFA panel hadn’t bottled expelling RFC for non-payment of the c.£13mil.

    The Livingstone appeal is perhaps the clearest way of seeing this- it is a precedent where a club unable to guarantee the fufilment of its fixtures due to financial problems was demoted.

    In RFC’s case, the non-fufilment of fixtures was avoided by theft (if we can regard the taking and use of money which does not belong to a club without the intent or ability to repay as theft…if anyone wishes to present an argument against this terminology- fire away, I plan on sleeping through it).

    Punishing RFC more leniently than Livi runs completely counter to natural justice and good sense (excuse the lack of Latin legalese to express this more succintly).
    Put simply it is punishing poverty more harshly than theft.

    There is no good legal reason to stop those voting on a share transfer from taking this into account- it is a vote on the totality of new club’s claim to an SPL place, not a judgement on a specific issue.

    Nor would it be an exercise in sound judgement to regard agreement to pay a c.£1mil fine while not repaying the c.£15mil theft in full (if at all) as successfully dealing with the disrepute into which the club has brought the sport.

    Just naw.

  11. martin m

    Duplesis, read the above re luton etc if the club does not obtain a cva it is entirely a new co… once rangers fc disolve the history dissolves, simple as that.. its a new club / new company the miller plan was to cva old co and merge !! any club in EFL who have newco’d and kept history have CVA’D ALSO !!! THIS IS A FACT why would they even attempt a cva and go this route if they kept history just doing a newco ?? everyone knows it but once again Rangers fans fail to accept the real world !

    • Duplesis

      Hi Martin, thanks – I’ve read quite a bit about the English clubs which have newco’ed and kept their history.

      As I said above, the English FL rules are that the “golden share” will not be transferred from an oldco to a newco unless oldco agrees a CVA, except in exceptional circumstances where there may be special dispensation. That’s why the English clubs try to get a CVA for oldco. The share is sometimes transferred where there is no CVA agreed however, as was the case with Leeds. HMRC did ultimately withdraw opposition to the Leeds CVA, but that was after the transfer of the share. (The Leeds Oldco ultimately was liquidated, incidentally.)

      There is however no such restriction in either the SFA or SPL rules where the transfer of the share is simply a matter of discretion.

      The important point in all of this is that the golden share and thus the club and its history can be transferred to a new corporate entity. That cannot be disputed since it has happened on numerous occasions.

      Fundamentally, the share which represents history etc is a transferable “asset,” as otherwise newco couldn’t get the history whether oldco agreed a CVA or not. If it is a transferable asset, then there is no reason why it cannot be transferred whilst the oldco is in administration.

      What you are seeking to argue is that the English rule which is that the golden share is generally not to be transferred without oldco having a CVA should be applied in Scotland, even though there is no such requirement in the SFA or SPL rules.

      I read a lot on the internet about how RFC should not be regarded as a special case. I agree.

    • Marching on Together

      So when Rangers changed from being an unincorporated association to a limited liability company in the 1890s, and transferred its assets to this company, it lost all its history from 1872?

      • Den

        Marching on Together

        May 18, 2012 at 10:51 pm

        “So when Rangers changed from being an unincorporated association to a limited liability company in the 1890s, and transferred its assets to this company, it lost all its history from 1872?”

        It is a matter of opinion.

        If they moved to avail themselves of the advantages of being a Limited Liability Company to take advantages of the legal rights and obligations of such an arrangement: to ensure the adequacy of long term Capital investment that incorporation can achieve, then I would argue that they carried on the history and bequeathed it to future generations into the 20th Century.

        if however they covered their moves with Financial chicanery for 20 odd years and left honest, legal, and trusting Creditors in the lurch they lost any worthy history, maybe some history is better lost.

        If Rangers survive in anything other than a CVA they have no history. Without the legal jargon the key word is ‘Voluntary’. In 1890s they had a choice and chose Ltd, maybe these days it is more onerous but get a ‘Voluntary’ agreement then we will discuss.

      • martin m

        marching on together no because original rangers were still intact and did not disolve, this was a legal thing to do with company listings done by every club !! Celtic also done this and also changed in 1994 to a plc but the company has never disolved ever its always been part of original celtic!

        its really quite simple all this crap about being able to transfer history is clutching at straws. A NEW COMPANY does not have history its NEW !! uefa do not recognise it, hance rangers would have 0 coefficient points..
        all this transfer of share crap is basically to hold a position in league, i dont see airdrie claiming clydebanks history ?

        why all the uproar from fans, why the need for a cva etc ? why no to a newco ? as it gets closer and more realistic people are now in denial… its a fact of life rangers fans will lay claim to history etc, but facts are facts ITS A NEW CLUB / COMPANY ! regardless of how much reading into it anyone does its a standard fact and NEW is the keyword !

      • Marching on Together

        Den

        Sorry, but there is no difference. The motivation for doing it makes not an iota of difference.

        I am not a Rangers fan and hope to see them punished fully for all their criminal and fraudulent activity, but I cannot see why Rangers should be treated any differently from every other club in the UK which has arisen in a different guise whether following an insolvency event, an asset transfer to a new company, or an initial incorporation.

        Those who argue for the history of Rangers being wiped out should get ready to change the Celtic badge to 1994, not 1888, as that is when the current guise of Celtic was founded, as Pacific Shelf 595 Limited.

        The football authorities including UEFA, and football fans the world over, recognise there being continuing history for clubs in this situation e.g. AFC Wimbledon, Leeds Utd, Bristol City etc etc – why won’t you?

      • Marching on Together

        martin m

        “original rangers were still intact and did not disolve” Yes it did. As an unincorporated association there was no further need for it.

        “its always been part of original celtic!” That is incoherent nonsense. What does it actually mean? If you mean that no matter the corporate guise of the club, the history goes with the fans, who turn up to support the club in whatever corporate guise they play under, then I would agree with you. However, what Celtic did in 1994 is little different in practical terms if there is a newco for Rangers (leaving aside the complete lack of morality with Rangers in stiffing all their creditors) to what rangers are planning now with a newco.

        “A NEW COMPANY does not have history its NEW” So The Celtic Football and Athletic Club Limited, founded in 1994 (company number SC153534), has no history according to you. Better get ready to give back that European Cup to UEFA then, as it is clearly nothing to do with current day Celtic.

      • martin m

        rangers disolved then reformed in 1872, can you show me this ??? dont think so celtic also did not form as a company in 1888, this was more a legal thing than anything else but as for 1994 ur really having a laugh, the company was reconstituted as a plc … a company liquidating and disolving are very very different from anything clearly pointed out rangers may be doing !! as ive clearly pointed out its NEW not a reconstitution not a float to plc, nothing at all like that no cva means liquidation !!!!! its new because old rangers disolve, ok then keep ur history but not your debt disolve all bad and keep all good. very good please tell me how uefa see it ? how many co-efficient points , when can a this same rangers play in europe etc !

        can you also tell me why blue knights and most supporters dont want a newco either ? becuase MOST accept NEW MEANS NEW

      • Marching on Together

        martin m

        No point in bothering responding in detail as you clearly don’t understand the basic concepts involved.

  12. I have come recently to the conclusion that this whole “oldco-newco does the club live on?” is based upon a set of ideas that are entrenched in people’s perspectives of RFC and the tax issue. So if you think RFC is guilty of tax fraud then you are unlikely to think that history should live on if a newco is formed, and if you think that it was CW on his own then you will think that the history transfers to newco. However, I think that there is another way to think upon it, simply that “Rangers” is simply a brand in the marketing sense and can be transferred to any new company that buys the rights to the name and its goodwill. We see this sort of thing every day in commerce. For example, Bentley and Rolls-Royce are now owned by Volkswagen and BMW respectively, but we don’t think for an instant that these brands’ histories were reduced to zero when they were sold. In fact RR cars as it trades today is an entirely different company and number than it was prior to being sold.

    So on this basis RFC could live on with whoever owned the brand.

    However, he difference is in the RFC case that the brand has become tarnished by the actions (and inaction) of board members as described in the SFA investigation report. It seems inevitable to me that there will be a police or companies house investigation at some point which would resolve this issue. If that should show that there has been illegality then the question for the SFA and SPL is whether the whole brand of Scottish football is devalued through a lack of integrity by being associated with such a parcel of rogues. My view would be that at the central question that should be asked of the other 11 SPL members is do you want a criminal club to be part of your league? But the question is really whether the illegality actually tarnishes the brand. In non-rangers fans eyes, absolutely. In rangers fans’ eyes, only a minority (guess 1 in 6) would consider the brand tarnished. In SPL eyes maybe 4 or 5 out of the total clubs. In SFA eyes, yes. In UEFA eyes, yes. Think of what happened to Ratners after Gerald Ratner made his infamous comparison with a sandwich.

  13. Brian Jeffrey

    Perhaps one or other of the intelligent contributors to thisi blog can explain something to me because I am beginning to suffer from brain freeze trying to get my head around all of this. In particular I cannot understand how the newco as proposed can be consistent with D&P’s statutory duty to operate in the interests of the creditors as a whole.
    It seems to me that the proposal is in effect and to all intents and purposes a liquidation of the oldco. My understanding is that in such circumstances it is a legal requirement that D&P liquidate the assets of the company in such a manner as to maximise the return for the creditors. It also seems to me that quite the opposite effect will occur if the arrangement as proposed proceeds. Rather than maximising the return for creditors it is proposed that all of the assets of the oldco are ring fenced and sold off to a newco leaving virtually nothing but toxic debt in the oldco and therefor no return for the creditors. Again, as I understand it, the administrators have a primary duty to try to keep the oldco going as a running concern, usually by way of a CVA and bring it back to a reasonable trading position. Secondary to that, they are required, if the primary object cannot be acheved, to maximise the return for the creditors by liquidation. As I see it D&P are failing big time on two key points. Firstly, the newco arrangement seems geared to maximising, not the potential survival of the existing oldco, but the trading position of an entirely newco for whom they have no responsibility at all. Secondly, having failed to meet the primary objective their sole focus should be on maximising the return for creditors by way of any proposed liquidation and yet the newco arrangement as proposed would involve specific arrangements to minimise the return for investors.
    Am I missing something glaringly obvious here?

    • Duplesis

      Hi Brian,

      the use of an asset or business sale to a new company is actually a very common outcome for a company which enters administration – far more common than leaving administration by CVA.

      In terms of the hierarchy you refer to, primarily what the asset sale achieves is maximising the return for creditors. The important point is that it is not a “free” transfer to the new company – a price is paid by the new company for the assets/business of the old. That price then becomes the “pot” (or part of it) available for distribution to creditors.

      As long as the price paid by the new company for the old company’s assets is more than would be achieved if the old company’s assets were simply “auctioned off,” then an asset sale to a newco achieves a better return for creditors than a simple liquidation.

      Incidentally, whilst I’m not an IP, I’ve discussed this issue with a few people who are, and they regard an asset/business sale to a newco as at least similar to the first obligation in the hierarchy, in that it at least saves the “business” as a going concern, if not the company.

      • Brian Jeffrey

        Thanks for the response it does clear up some of the issues for me except that there is no way the value of the assets are maximised by selling them this way. The value of Alan McGregor alone would exceed the total pot being made available. If you add on the other first team players plus Murray Park and Ibrox there can be no doubt that this plan is designed to maximise the potential of the newco rathe than maximising the return for creditors of the oldco.
        I repeat my previous assertion, D&P have no locus in respect of the trading position of the newco, they have a legal duty to the creditors of the oldco and should be seeking to get he maximum possible return from the oldco’s assets and that is not going to be achieved from a job lot transfer to the newco and it certainly can’t be Sid that they have fulfilled their duties if they do not even seek alternative buyers for the players by way of transfer to other clubs

      • Duplesis

        @Brian Jeffrey at 11:06

        Hi Brian, yes I agree there might be an argument about whether the deal actually is better than what would be achieved on liquidation. Obviously if the creditors feel that a better result would be achieved that way, they have the right to object to what the Administrators are doing.
        That though would be a matter for the creditors, and thus far at least they don’t seem to be taking that view.
        The administrators have obtained valuations of Ibrox and Auchenhowie, and it may be that these are less than we would expect. It’s important to note that the 2nd part of the hierarachy is to achieve a better result than would be achieved on winding up. A “fire sale” of Ibrox and Auchenhowie might not raise as much as one would expect.
        The players – as I understand it – would become free agents on winding up, and so I don’t think that their value is taken into account in assessing the merits of the asset sale as against liquidation

      • Marching on Together

        Brian Jeffrey

        To add to your contention, suppose that D&P decided to auction off the contents of the Rangers trophy room, as individual items. All those Rangers fans desperate to have bit of the glory for themselves, or to save it from the “barbarians”. All those Celtic fans desperate to have something for the bonfire at the ice cream and jelly party. That would be a good couple of million to start.

  14. I have recently come to the view that the history could transfer across to a newco, and here is why.

    Bentley and Rolls-Royce are now owned by VW and BMW respectively, and in the case of RR, the company that owns the brand is no longer the same original company, BMW using one formed in 1998 I think. In neither of these cases do we think of the organisations having no history or provenance, and clearly a major part of the marketing is based around the prestigious histories of these brands.

    So there is nothing to stop the transfer of a brand and it’s identity to another company.

    However, a brand identity can also have a negative or notorious history. Consider Ratners and what happened after their own boss said about their quality. The brand nose dived and they had to be rebranded.

    Now consider RFC. The SFA investigation suggests gross misconduct, and I believe that it is likely that a police or companies house investigation will result as regards non payment of NI and PAYE. Then we also have the possibility of the BTC and second contracts issue, the latter being a bit of a nuclear bomb if results are voided. At this point the brand would be completely devalued (except in the eyes of a fair majority of RFC fans). To be associated with that brand would be to devalue your own brand. Consider what sponsors would want to be associated with tax fraud? The SPL would also be devalued, clearly identified with a lack of sporting integrity, which in turn might have knock on consequences for other clubs’ sponsorship deals and attendances.

    So throw out RFC and lose money from TV deals and possibly sponsors.
    So keep in RFC and be associated with a tainted brand, losing fans, possibly sponsors and TV deals.

    The only logical thing to do is to allow a transfer of RFC history and honours, and dishonours, take a sentence of say 3 years from playing any football, and then start again from division 3 (subject to committing to maintaining a balanced budget for a further 5 years, and paying all debts as they fall due.

    This way, RFC pays its debt to society and the fans get a chance to rebuild and sing of their past glories and their new battles to rehabilitate themselves.

    • Marching on Together

      “I believe that it is likely that a police or companies house investigation will result as regards non payment of NI and PAYE”, There previously was a lot of discussion as to whether the use of EBT as used by Rangers constituted a criminal offence, but the popular conclusion seemed to be that the evidential test required to secure a conviction would be too high, so it would not happen. Now when I read the 63 page SFA panel report, and the conclusions relating to the deliberate withholding of tax and NI by Rangers under Whyte, McClelland, Greig et al, my initial reaction was that what was described constituted a criminal offence. Now as I am no expert on this area of the law, I would welcome views from someone who is.

      Just suppose that I am right on this and that Plod have decided likewise. At that point money laundering regulations and the Proceeds of Crime Act come into play, and these cover a much wider range of circumstances than you would think. IMHO there would be nothing to stop the Crown Office freezing the proceeds of the sale of the assets of oldco to newco in the hands of oldco, prior to its distribution to oldco’s creditors, or the funds pumped into oldco by Green & Co to ensure the CVA, prior to its distribution to creditors. Subject to court battles, the Crown Office would seek to release those funds to HMRC.

      Any thoughts welcome.

      • Brian Jeffrey

        I think you are probably correct in theory but in practical terms I suspect that it is far too politically sensitive a route to follow

  15. Duplesis

    @ Hugh Jarse at 9:16am

    Hi Hugh, sorry – but I’m afraid it is you who is misunderstanding the position.

    It’s trite to say that takeovers happen, and I am well aware of the difference between the shares of a company being bought and a sale of the assets from the oldco to a newco.

    Almost all of the examples you refer to were not takeovers though, and if you look behind the headlines a bit, you’ll be able to see so for yourself.

    In fact, what happened was that there was an asset sale to a newco – not a sale of the oldco. The oldco was then left to wither and die.

    Take a look at Leeds, for example. The Leeds company was The Leeds United Association Football Club Ltd, formed in 1920 with company number 00170600.

    The current Leeds Utd company is different, it is Leeds United Football Club Ltd, formed in 2007 with company number 06233875.

    The 2007 company bought the assets from the 1920 company whilst the 1920 company was in administration. The “golden share” of the 1920 was amongst those assets, and was allowed to be transferred even though the 1920 had not at the time agreed an unopposed CVA.
    If you go and check on Companies House, you will find that the 1920 Leeds company then went into liquidation in 2008.

    Leeds are not the same company as they were.

    Another of your examples was Plymouth Argyle. Again, what happened here was that a newco acquired Plymouth oldco’s assets including the “golden share.” In Plymouth’s case however, the oldco did agree a CVA.

    The original Plymouth Argyle company was The Plymouth Argyle Football Company Limited, formed in 1910 and with company number 0110819. It is not trading, and is overdue to lodge accounts and Returns. It will almost certainly be subject to a strike off application in due course.

    Plymouth Argyle’s assets were bought by Green Pligrim Ltd, formed 2011, company number 07796376, which subsequently changed it’s name to Plymouth Argyle Football Club Limited. This company now runs the club.

    Plymouth Argyle are not the same company as they were.

    Crystal Palace have had numerous newcos. Most recently, they were a company called Crystal Palace FC (2000)Ltd (which itself replaced a company called Crystal Palace FC (1986) Ltd, which was dissolved.)

    Crystal Palace FC (2000) Ltd, company number 03951645, does not trade, and is overdue with its accounts and returns. Once again, it will no doubt shortly be struck off.

    Crystal Palace are now operated by CPFC Ltd, formed 2010, with company number 07270793. Again the oldco in the crystal palace case managed to obtain a CVA (in the case of the 201o newco’ing at least, I’m not sure about the 2000 newco’ing.)

    Crystal Palace are not the same company as they were.

    There are many, many, more examples in English football of assets sales to newcos which include the transfer of the golden share to the newco, and leave the oldco a dead shell. It is a relatively common practice to allow clubs to exit administration there, and is uncontroversial.

    • Duplesis

      Just to underline the point, I’ve had a look at the Administrators’ report in the Plymouth Argyle Administration case (this was lodged 19th March 2012, and can be downloaed from companies house for £1)

      The report confirms that there was a sale of the business from the oldco to the newco on 31/10/11 (6.17.) It also confirms that it was a condition of that sale that the “golden share” in the league be transferred to the newco, and that this happened (7.1 and 7.2)

      Perhaps most interestingly from the point of view of my discussions with Hugh Jarse, the report also confirms at para 9.1.2 that the expectation is that the Plymouth oldco will now be wound up by HMRC .

      To be clear, in the Plymouth case, as in the Leeds case, there was not a takeover of the old company. There was an asset transfer to the new company, and the oldco was left “carved out.”

      • Hugh Jarse

        In both this case and the Crystal Palace one you quote above the legal entity that went into administration agreed a CVA in order to exit administration and then subsequently transferred its assets to a new company.

    • Hugh Jarse

      You’re still missing the point.

      Transfers from one legal entity to another happen fairly frequently, whether that be from mutual to limited company to PLC and back or whether that be the result of a takeover. Nothing untoward in that.

      In the case of an administration such a legal entity transfer may indeed happen POST-CVA and in fact is extremely likely in such a scenario as a change of ownership is also happening.

      This is still very different to the Newco proposals being discussed in relation to Rangers. If Rangers fail to agree a CVA (quite likely) then the proposal is to liquidate the company and for a newco to buy some or all of its assets. This is not the same as any of the English examples.

      • Duplesis

        Sorry Hugh, but it is you who is missing the point, and you are misunderstanding what happened with Leeds, Crystal Palace and Plymouth Argyle, and what is proposed re Rangers.

        I take it, incidentally, that you now accept that what happened in these English cases was not a post CVA takeover of the original oldco, as you had been arguing previously.

        If Rangers don’t get a CVA, then what is proposed is that the assets will be sold whilst the club is in administration – that is an asset sale, just as happened with all the clubs referred to above in England. It is not proposed that there be a liquidation then a sale of the assets. The English clubs (apart from Leeds initially) then achieved a CVA from the funds generated by the asset sale. Perhaps Rangers will too, but that is irrelevant to this issue.

        As a matter of law, an asset sale can happen from a company in administration whether or not a CVA is agreed. It happens fairly regularly in fact.

        The CVA issue is relevant only because in England there is a rule that the FL won’t agree to the transfer of the most important asset – the league share – unless oldco gets a CVA. There is no such rule in Scotland (and as Leeds demonstrates the rule is flexible in England in any event.)

        After the asset sale, funds will be left in the oldco and distributed to oldco’s creditors. After that, oldco may well be liquidated. Again though, thats exactly what happened with Leeds, and what will happen with Plymouth.

        What is clear from the English cases is that the club/history can be transferred to a newco even if the oldco subsequently dies – whether by liquidation (Leeds and probably Plymouth Argyle), or by striking off. The history (and the “club”) is plainly an asset as otherwise it could never be transferred from an oldco to a newco under any circumstances.

        You are trying to “special plead” that the history/club is some sort of sui generis asset which can only be transferred if the club is solvent or has agreed a CVA. There is no basis for that, and I know of no sort of property, be it intangible or otherwise, which can only be transferred if the transferring entity is solvent. If you have some authority for the proposition that such a sui generis type of property exists, please refer me to it.

        The idea which has been propagated that oldco needs to survive for newco to have the club’s history is simply false. The club and its history are demonstrably assets which can be sold to a newco – it happens all the time.

      • Marching on Together

        Duplesis

        Your summary of exactly why the history of Rangers will transfer to newco is spot on and the best explanation I have read to date in this whole saga. Keep up the good work.

      • Hugh Jarse

        Oh Duplesis you are so close yet so far.

        All of the English Clubs mentioned exited administration with the agreement of 75%+ of their creditors. That they subsequently changed legal entity as well, for whatever reason, is not the point. That is not what makes it a oldco/newco deal.

        Rangers “newco” arrangements proposes to do this without the agreement of the creditors. This makes it a third party aquiring the assets of the former Rangers FC from the administrator, essentially liquidating Rangers, and means that they need to apply as a new entity to join the SFA/SPL/SFL.

      • Marching on Together

        Hugh Jarse

        “All of the English Clubs mentioned exited administration with the agreement of 75%+ of their creditors” Leeds United DID NOT. As a Leeds fan, I am sick of having to correct uninformed comments on this. The company which owned the Leeds club, brand, etc, dating from 1920, only exited administration by going into liquidation in 2008. They might have had the agreement of 75% of their creditors to exit administration via a CVA, but HMRC objected within the statutory period and blocked it, so it NEVER happened.

      • Duplesis

        Hugh, you seem to have your own very particular definition of a newco, which isn’t based on any legal proposition as far as I can see.

        All of the English examples are newcos, as they are examples of the club transferring to a new company, and the old company ending.

        You accept, I take it that the English examples show the club/history can be transferred from one corporate entity to another?

        And that applies even if oldco subsequently “dies?”

        Assuming that’s so, the point your argument fails to address is -what is it that transferred from oldco to newco in the English examples, and why can’t whatever that is transfer without a CVA?

        Again, give me a legal basis for your argument that an “asset” can only be transferred if the transferor is solvent or has agreed a CVA.

        If you can’t then your argument fails.

    • Duplesis

      Just to add a little further information, Rotherham United are another good example of a newco in England keeping their history.

      Rotherham were ROTHERHAM UNITED FOOTBALL CLUB LIMITED(THE) Company No. 00158654, Date of Incorporation: 09/09/1919

      The entered Admin in 2006 and I believe transferred their assets to a newco then -ROTHERHAM UNITED FC LIMITED Company No. 05764000
      albeit with oldco agreeing a CVA at that time.

      In any event, and more importantly for the present discussion though they subsequently went into Administration for the second time in 2008 and this time were unable to agree a CVA:

      http://news.bbc.co.uk/sport1/hi/football/teams/r/rotherham_utd/7543195.stm

      but the league allowed the “golden share” to transfer on imposition of footballing penalties to a newco. The 1919 company was dissolved on 07/06/2011. The 2006 company was liquidated on 07/02/09.

      Rotherham are now ROTHERHAM UNITED FOOTBALL CLUB (RUFC) LIMITED Company No. 06550400, Date of Incorporation: 01/04/2008

      • Marching on Together

        Good stuff on Rotherham. As this was the second “exceptional circumstances” case considered by the Football league, it is interesting that as a condition of allwojng Rotherham to transfer its golden share, as well as a 17 point penalty, the Football League also imposed a condition to the effect that “The club must undertake to return to Rotherham within four years [Rotherham were seeking to play at Don Valley Stadium in Sheffield while their ground was being completely redeveloped] and provide an irrevocable bond of £750,000. This will be forfeited if the club fails to return within that timeframe, as will the club’s membership of The Football League.”

  16. Niall Walker

    Good morning Brian,

    I read your comments regarding the asset values of players in a liquidation event, the creditors would receive nothing and the players would walk free.It is yet another reason why it is financially impossible for liquidation to deliver more to ordinary creditors than a CVA or Newco.asset transfer. The quantum would still be greater even if the penalties for a CVA or Newco were equivalent to liquidation.

  17. Glazert Tim

    For a fleeting moment it was practically bearable to open a MSM rag without vomitting. However It seems they have found some succulent lamb (way past its sell by date) in the freezer compartment at the Record.

    Never mind the club history could be wiped, the club as they know it would no longer exist, we are bearing witness to one last moonbeam shower.

    The troops are being rallied once more to the tales of ‘Super Casino’ and ‘Luxury Hotel Complexes’ because two of the mystery buyers have strong links with middle eastern leisure and hotel developments.

    Having slaughtered (albeit half-heartedly) DM last week they merely mention the former owner had such ambitious plans, leaving the masses to ‘draw their own conclusions as to when such great works would take place. This b/s storm was almost as predictable as an episode of Home and Away.

    The mysterious buyers seem to have cash and the business knowledge but lets take stock, ……..IT’S GOVAN……..GOVAN!!!!!

    Just shows how rusty the mental cogs are at MSM towers when you have to construct a good news piece rather than having it written for you I guess.

  18. Al ross

    Whether its Oldco or Newco there is one other rather intriguing aspect as regards the ”investors” which is beginning to emerge. So far we have 5/6 emerging from the shadows some under the heading of ”offshore trusts”. I would ask Paul 2 questions 1) Why an Offshore Trust which would carry more than a whiff of tax planning (EBT’s anyone) ?
    2) Will the ultimate beneficiary’s of these trusts ever be revealed as one of their functions is to ensure secrecy sorry Freudian slip I meant privacy !

  19. p groom

    so rangers break the agreement with ticketus and seemingly convert their debt to them to a take-it -or-leave-it cva outcome. what a result! they must be laughing all the way to the bank. and not any old bank, just the one who received the bulk of the ticketus money and thereby allowed the takeover to go through. without that happening none of us would be where we are today. funny how rangers will not be yelling this time “we are not responsible for CW’s actions”.

    by the way rangers really ought not to overdo the outrage moral indignation and persecution paranoia displayed so far. they need to keep some in reserve for bigger adverse decisions heading their way, eg new spl disciplinary rules for next season, the big and small tax cases to name just a few.

    however regarding the wider issues at stake here it must be remembered that it seems to be perfectly legal to get out of debt by the simple expedient of changing your name. you have to question how anyone can think this is just. surely this whole concept needs a rethink?

  20. Alick

    Three key points: a football club is more than the company that, at any given point, is its commercial incarnation; the concept of “sporting integrity” really applies to the club, not the company; and history is not a legal concept.

    Therefore, who “owns” the history is, at the end of the day, up to the fans. If the company that’s the commercial incarnation of a football club goes bust, and the fans en masse transfer their allegiance to another company as being the new commercial incarnation of their club, it doesn’t really matter what that company was before or where it came from.

    However, if a company is set up specifically for that purpose – i.e., to replace a bust commercial incarnation of a football club – then it has to accept the sporting penalties that were due to the previous incarnation. (That’s the sporting integrity point.) And that holds for whenever the penalties crystallise.

    So, in the case at hand, if Rangers fans choose to follow the football club whose commercial incarnation is the newco being promoted by Charles Green, then that’s entirely their choice. However, the sporting authorities (SFA, SPL, UEFA) – as a condition of accepting that transition – should absolutely apply any sporting penalties that fall due to the club to the new company. This would apply to: (i) the current SFA fine and restriction on registration of new players; (ii) any SPL penalties for the offences that the SFA punished under (i); (iii) any further SFA/SPL/UEFA penalties for the move to a newco with its consequent implications for creditors and the reputation of the game; and, perhaps most importantly, (iv) any penalties that arise as a result of the BTC (when the Tribunal finally get around to ruling).

    So long as these conditions are met, and the creditors accept the asset transfer to newco in preference to either a CVA or liquidation, then I can’t see why anyone would object. We can have a discussion about whether the penalties under (i)-(iv) are appropriate (not harsh enough/too harsh), and whether we would have taken the same view as the creditors, but on the central point of whether the newco is “Rangers” then I think we’re done.

    • LETSALLLAUGH

      quite simply ur bust ur bust…….if a newco was still rangers it would have been done on 15th feb … the day is a coming the reaper awaits and most know the real fate……………….denial will begin at the moment of death !!! and the prep has begun…. NO TO NEWCO ETC shows what real fans know the BIG L is on the horizon HISTORY NOT JUST TAINTED BUT GONE FOREVER

  21. lordmac

    just seen these values come up on another site Paul would they be worth an email into the SPL or SFA what one would you recommend thanks
    http://www.uefa.com/uefa/elevenvalues/index.html

  22. lordmac

    just thought that any one, of the 12 teams could ask the UEFA on the 30 of may to deal with the case, on the grounds of the value of there number 3 resolution.

  23. LETSALLLAUGH

    THE STORY THAT KEEPS ON GIVING !! the victims that are poor rangers… how sad how crime does not pay but lets march when we are down lets blame everyone for kicking us !! and lets make justice look so wrong !!!!! no thanks we aint all deluded !!!! u do the crime u do the crime !!

  24. fisiani

    Given that Rangers have not submitted audited accounts which were due 31st March how can they obtain a licence for season 2012-13? Effectively they have already, as the season has ended, resigned from Scottish football.
    Anyone care to dispute?

    • Geddy Lee

      fisiani, I think the SPL have given up pretending they care what rangers do. If they don’t want to present their accounts then that’s “up tae them”. Thank goodness UEFA saw it differently.

      Incidentally, as the SFA have given rangers a year to pay their fine, could they body swerve that to if they become a “newco”.

  25. Jim Harkins

    May I, please,return to an issue debated by Duplesis and Brian Jeffries on 19 May, regarding the D&P plan to sell the RFC assets to the Green consortium, (for an established but undisclosed price) if the current CVA offer is rejected by the creditors?
    I presume that a post facto challenge by a dissatisfied creditor would be messy, to say the least; one would hope that the creditors with clout were monitoring the situation. Since Ticketus have been ambivalent throughout this affair, it appears likely that it would come down to HMRC to take any action required.
    I am always prepared to give Civil Servants the benefit of the doubt but the continuing silence of the Revenue is beginning to look suspiciously like inertia. Are there any Inspectors of Taxes out there who could say how the Inspector responsible for this case will be operating; is he/she poised to spring into action if it appears that assets are being put beyond reach, to the detriment of HMG’s interests; or will this just be one case in an overloaded in-tray?

  26. David Wilson

    Whilst we continue discussing the ins and outs of newco/CVA etc and slowly see Doncaster and the rest of the SPL board trying to help Rangers out, isn’t there a very simple precedent we have in Scottish football that we seem to be forgetting – if you go into administration you get relegated. It happened to Livingston, Dundee and Gretna.

    Or have I missed the boast completely ?

    • Robert

      No, it is not the case that “if you go into administration you get relegated”.

      Of the 4 SPL teams that previously went into administration only one of them, Gretna, was relegated at the end of the season during which they went into administration.

      Motherwell went into administration Apr 02 and would have been relegated at the end of 02/03 season as they had the lowest number of points (no points deducted) had it not been for Falkirk not having a stadium to SPL standards.

      Dundee went into administration Nov 03 (for the first time) and were relegated at the end of the 04/05 season (the following season) as they had the lowest number of points (no points deducted).

      Livingston were in administration during 04/05 season and relegated at end of 05/06 (the following season) as they had the lowest number of points (no points deducted).

      Gretna went into administration in Mar 08, had 10 points deducted and were relegated at the end of the season (would have had the lowest number of points even without the 10 points deduction).

      • Hugh Jarse

        Thats only part of the story

        Gretna were relegated from the SPL to Division 3 prior to going into liquidation. Livingston were relegated from Division 1 to Division 3 despite avoiding liquidation and the payment of a large bond by its new owners.

      • The Livingston case involved a breach of Rule 76.2, relating to insolvency.
        http://www.scottishfootballleague.com/news/article/livingston-fc/

        Livingston’s Administration problem was the threat of insolvency by August 18th, and the appearance of Administrator Donald McGruther, who had been appointed by the courts.
        http://news.bbc.co.uk/sport1/hi/football/teams/l/livingston/8130333.stm
        Note that, at the time, Angelo Massone, said that the appointment of McGruther was only a technicality and that they would only enter into Administration on August 18th.

        Livingston was asked to pay a Bond to ensure the integrity of the league. The bond was set at two home fixtures for the other nine clubs in Division One (18 * £40,000). The bond was NOT paid. Livingston believed the bond excessive, and may not have been able to deliver it, they appealed. The other Division 1 teams were concerned that Livingston could not fulfill their fixtures; Rule 76.2 kicked in and they were relegated to Division 3.

        http://news.bbc.co.uk/sport1/hi/football/teams/l/livingston/8184564.stm
        http://news.bbc.co.uk/sport1/hi/football/teams/l/livingston/8179998.stm

        Rule 76.2 The Management Committee shall also have full power to deal with as it thinks fit, including power to deduct championship points before or during a season and/or to impose a player registration embargo on any club guilty of conduct contrary to the interests of the League and its member clubs or any registered player or former registered player, or potentially likely to prejudice the orderly progress of the League Championship and/or the League Challenge Cup competition in any season. **Such conduct, for the avoidance of doubt, may include a club in or going into Administration, Liquidation, Receivership, Sequestration or any other insolvency procedure by whatever means or having a Judicial Factor appointed to its undertaking.** For the further avoidance of doubt, a club in or going into any such procedure will remain responsible for the purposes of this Rule for the conduct of its undertaking by any Administrator, Liquidator, Receiver, Trustee in Sequestration, Judicial Factor or other such officer appointed to it

        Livingston’s Administration problem was the threat of insolvency by August 18th, and the appointment of Administrator Donald McGruther prior to that, by the courts.

      • Robert

        Hugh Jarse

        The point I am making is that of the 4 SPL teams that previously went into administration only one of them, Gretna, was relegated at the end of the season during which they went into administration and they would have been relegated even without the deduction of 10 points.

        For some more of the story.

        The reason Gretna went into Division 3 on being relegated, was because all of the club’s employees were made redundant at the end of the season and Gretna were hence unable to guarantee being able to field a team. They resigned from the Scottish Football League on 3 Jun 08, prior to playing any games in Division 3, and were liquidated 8 Aug 08.

  27. Hugh Jarse

    @duplesis

    Lets start again as we seem to be at cross purposes.

    The issue with what the mainstream media refers to as a Newco option is not that it involves a change in legal entity. The issue is that it involves an exit from administration without coming to an arrangement with the creditors.

    The is no legal issue with the administrators selling any or all of the assets of Rangers (In Administration) to Charles Green or any other bidder – provided that the value achieved is demonstrably the best deal for the creditors.

    However, if Rangers fail to agree a CVA what the new company cannot do is automatically take the old company’s place in the SPL. They would need to apply for admittance to the SPL – a matter for its member Clubs that will be voted on – or the SFL if that fails.

    • Duplesis

      Hi Hugh,

      I can’t argue with very much of that!

      I’m not sure the MSM are aware that many of the English clubs who are described as leaving administration by CVA did so in an arrangement which also involved an asset transfer to a new company, but except for that what you are saying accords with my understanding of the position.

      In an RFC asset transfer to a a newco, the SPL Board (following on, as they have made clear, consultation with the clubs) would have to agree to the SPL share transferring to the newco, and without that consent a newco RFC would have no right to a place in the SPL.

  28. Shyster, Flywheel & Shyster

    Maybe I have not grasp the metal on this but shouldn’t it be the Administrators / Mr Green (oh the irony) that should put the case forward for a Rangers ‘Newco’ to be accepted into the SPL and not Neil Doncaster.

    All that Doncaster should be doing is laying down the rules by which the SPL would accept a ‘Newco’ into the SPL.

    Surely if an Oldco folded then the SPL have to put out for applications from all prospective applicants and not just a Rangers ‘Newco’.

    The best solution would be to expand the SPL to 14 teams and let the ‘Newco’ enter.

    Flywheel

    • AliM

      I was thinking this too and I also noticed that the SPL chairmen and managers (other than Rangers) have gone quiet recently.

      Its patently obvious to me that they want Rangers in the SPL (money over integrity) but they are scared of what their fans will say (and do) so are sitting in the background and letting Doncaster be the bad boy.

      Then when Rangers are let back in, it’ll be another “it wasn’t us, it was that bad man”.

      If that happens, the SPL really will be the laughing stock and show itself up for the diddy-league is seems to want to become.

  29. Mick

    Newco?Oldco nonsense.

    Money runs out next week leading to no co.

    Over and out

  30. ian lewis

    I’m a bit of a simpleton about this.If I was a sizeable creditor I would agree to nothing and insist that the administrators sold those players that would fetch anything with the money going into the CVA pot.Isn’t this what should happen?

    As far as Strathclyde’s finest getting involved I remember being at a cup tie and being comforted by the poilce presence at the back of the crowd-get into these Fenan b*******s came the shout from behind me-I would estimate he’s a Chief Super by now.

  31. Hugh Jarse

    Just watched the BBC documentary.

    Holy f**k! Gobsmacked.

    Rangers are up a certain creek without a paddle.

    Duff & Phelps are in deep doo doo as well.

    SPL & Doncaster not coming out of this too well either, if the Beeb have all that evidence, how on earth is the dual contracts investigation dragging on.

  32. Den

    Excellent documentary. I think he had material for a series.

    D Murray main beneficiary of EBTs. G Souness gets £30k 10 years after he ceased being an employee. Either someone at Rangers controlled the distribution of Trust money (against the rules) or the Trust was being quite random.

    I always had a bad feeling about D&P from when Craig Whyte appointed them. Their conflict of interest was documented in the Report to Creditors but tonight some more revelations. Quote below:

    “The comment from Paul Clark, joint administrator, said: “For the BBC to suggest that I deliberately misled or lied to Mark Daly is both grossly insulting and unacceptable to me as an officer of the court. During my conversation with Mr Daly on Feb 22, which was off the record, I said I thought that MCR became aware of the full scale of Ticketus funding in July or August. I gave an honest answer to the best of my recollection as I had not been closely involved in the Rangers takeover work at the time.”

    I note that he had not been “closely involved” does that mean he was involved. To go from advising a client on a takeover to being part of the Admin team leaves you open to charges of conflict of interest. Grier’s position is distinctly dodgy.

    It is going to take a while to fully digest.

    There is more to come and with this story things just get worse.

    • Hugh Jarse

      I’m always suspicious when someone other than a major accounting firm is appointed to a major insolvency. Duff and Phelps seemed an odd choice until realising they were Whyte’s choice.

      Yesterday’s revelations were shocking and the rebuttal …… unconvincing.

      Quite a few people needing to consider their position today.

  33. Flicktokick

    An interesting development in England today with Darlington relegated 4 divisions for leaving administration without agreeing a CVA.

    “The Quakers will play in the Northern League next season, the Football Association (FA) has decided.

    The FA will relegate the club four divisions below the Blue Square Bet Premier where they played last season.

    Fans’ company Darlington 1883 (DFC 1883), which bought the club for £100,000 earlier this month, had hoped the club would be placed in the Evo-Stik League Northern Premier or Division One North. However, the FA has punished DFC 1883 for purchasing the club without a company voluntary arrangement in place which would have meant creditors getting their money back.

    FA rules state that in order to leave administration and reclaim a place in the football pyramid, a club must agree a Creditors’ Voluntary Agreement (CVA) with its creditors.”
    http://www.thenorthernecho.co.uk/news/9728300.Quakers_in_Northern_League/

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s