Can “Rangers” Play as “Rangers”? What’s In a Name?

Various suggestions have been flying about teh Internetz regarding the possibility that Sevco Scotland Ltd’s team ought not be allowed to play under the name of Rangers.

This is suggested to arise from differing sources.

Some say that calling the team “Rangers” will make it a “phoenix company” and as such it would be illegal to use that name.

Others hint that HMRC would prevent the use of the old team name.

It is regularly voiced that HMRC did this with Farsley Celtic, an English non-league team which, as the story would have it, was blocked from reforming under the name Celtic.

In fact the ownership of the club had planned a name change prior to insolvency, and there was no HMRC involvement in the new name being chosen as Farsley AFC. This has become an urban myth which, like all such stories, has a life far beyond reality.

There are also rumours that calling the team “Rangers” would allow creditors of the Rangers Football Club PLC (RFC PLC) to pursue Sevco Scotland Ltd for payment of debts.

It has been alleged that BDO, who are soon to be appointed as liquidators of RFC PLC, have stopped, or will stop, use of that name.

As well as Farsley Celtic, some suggest that Darlington’s situation from last season provides a precedent, as the English FA did insist on a name change for the club, as a result of its decision that the “rescued” Darlington was not a continuation of the previous club.

Darlington’s home ground – a bit over the top for the Northern League Division One!

As the BBC described it:-

“The Quakers were relegated four divisions following the Football Conference’s decision to deny entry after a breach of operational rules. The ruling means the club will now be forced to change their name under the circumstances of the takeover.

Darlington FC were placed in administration by former chairman Raj Singh in January 2012, with DFC 1883 Ltd to save the club from liquidation and ensured it would complete the 2011-12 season.

However despite the group’s efforts to acquire a Company Voluntary Arrangement to allow the club to come out of administration the bid was unsuccessful. That failure to acquire a CVA meant the Football Conference refused DFC 1883 entry into their divisions.

In addition DFC 1883 Ltd bought assets from the football club and set up a new holding company, putting the former club into liquidation.

The FA ruled that the club be demoted to step five of the pyramid, and as the former club no longer exists would need to change their name.”

Whilst there are similarities between the FA rules and those of the SFA, the situations are not analogous. The basic reason for this is that the SFA has shown no inclination to treat The Rangers FC, owned by Sevco Scotland Ltd, as anything other than a continuation of the old team.

What about phoenix companies?

This is a phoenix, but, like The Rangers Football Club, it is not a “phoenix company”.

Section 216 of the Insolvency Act 1986 helps us with that issue. The relevant parts of the section are as follows.

Restriction on re-use of company names.

(1) This section applies to a person where a company (“the liquidating company”) has gone into insolvent liquidation on or after the appointed day and he was a director or shadow director of the company at any time in the period of 12 months ending with the day before it went into liquidation.

(2) For the purposes of this section, a name is a prohibited name in relation to such a person if—

(a) it is a name by which the liquidating company was known at any time in that period of 12 months, or

(b) it is a name which is so similar to a name falling within paragraph (a) as to suggest an association with that company.

(3) Except with leave of the court or in such circumstances as may be prescribed, a person to whom this section applies shall not at any time in the period of 5 years beginning with the day on which the liquidating company went into liquidation—

(a) be a director of any other company that is known by a prohibited name, or

(b) in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of any such company, or

(c) in any way, whether directly or indirectly, be concerned or take part in the carrying on of a business carried on (otherwise than by a company) under a prohibited name.

(6)References in this section, in relation to any time, to a name by which a company is known are to the name of the company at that time or to any name under which the company carries on business at that time.

The first thing to note is that there has to be a company in liquidation. Rangers Football Club PLC is not yet in liquidation. It is likely to happen soon, but the restrictions under s216 do not apply until it does.

The section does not apply to the company, or to the company name, but instead to a person who was a director or shadow director of the liquidated company in the 12 months prior to the liquidation.

In relation to such a person a name is prohibited if it was the name of the liquidated company or so similar as to suggest a connection.

In that event the director or shadow director of the liquidated company cannot be involved in or connected with a company going by a restricted name fir a period of five years. The court can over-ride this restriction where justified.

To use the present example, none of the following gentlemen would be allowed, I submit, to have involvement in a company called “Rangers” “Rangers Football Club” or “Rangers FC” for the next five years from the date of liquidation – Dave King, Craig Whyte, Andrew Ellis, Phil Betts, John Greig, John McClelland and Donald McIntyre.

Two men in this photo, and five not shown, would be restricted from using the name “Rangers” under the Insolvency Act.

The latter three would have, I think, very good grounds for a court approving their involvement, the first four less so.

Matters are complicated by the fact that Mr Whyte’s holding company was called the Rangers FC Group Ltd. How would this overlap with the former Rangers Football Club PLC?

Thankfully I do not need to answer that.

Instead, as long as none of the people named above are connected with Sevco Scotland Ltd there is nothing to stop that company trading as The Rangers Football Club, nor to stop the changes of name due later this week at the instance of Duff and Phelps.

Sevco Scotland Ltd bought the rights to use all of the trademarks, names and intellectual property of Rangers Football Club PLC from Duff and Phelps. They can therefore use them.

Even if BDO try to unravel the purchase of assets by Sevco Scotland Ltd on the basis that it was a transaction by way of a “gratuitous alienation” (which they may or may not do) it would require a court order to prevent the use of the name “Rangers”. I do not see such an application as likely, even if BDO do take such action to reduce the sale.

Finally dealing with names, it seems that some Rangers fans are unhappy that media sources were referring to their club as “The Rangers FC” and placing them, alphabetically, at the bottom of SFL3.

It seems that the use of that term, rather than simply “Rangers” was being treated by some as an insult.

But Mr Green declared that was what the club was to be known as. That is stated to be the trading name of Sevco Scotland Ltd. It will be the company name after 31 July.

“The Rangers Football Club, a trading name of Sevco Scotland Limited (No SC425159) Ibrox Stadium, 150 Edmiston Drive, Glasgow G51 2XD” as stated on Rangers.co.uk.

Maybe some fans of The Rangers Football Club should pay more attention to what the Chief Executive has to say!

To conclude, “Rangers” can play as “Rangers” and wear the old badge and crest and strip. No one can or will stop them doing so.

Whether in fact, law or football terms “The Rangers Football Club” this season is a continuation of Rangers from last season is a question for debate but one on which there will never be universal agreement. I therefore won’t try to resolve it for now.

 

Posted by the Paul McConville

 

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41 Comments

Filed under Football, Insolvency Act 1986, Rangers, SFA

41 responses to “Can “Rangers” Play as “Rangers”? What’s In a Name?

  1. Personally, I can’t see a problem calling them Rangers. The fans will think of them as Rangers (as a matter of pride). Fans of other teams will think of them a sRangers ( as a term of derision). It looks as if they will continue to behave like Rangers. Why call them anything else?

    • Ernesider

      “It looks as if they will continue to behave like Rangers.”

      Three things you can be sure of in life

      Death
      Taxes?
      And Rangers will continue to behave like Rangers.

    • Because they arent Rangers thats why. Leave behind £134M debt, you simply cannot claim righteous that Sevco are Rangers..

      • Marching on Together

        So? Clubs have done this and left debts behind all the time. Not moral, but their club continues in existence.

  2. ecojon

    http://www.bbc.co.uk/sport/0/scotland/19038108

    My My – yet again Green bangs the big drum – he’s certainly a quick learner in soaking up the bile.

    Rangers chief executive Charles Green speaks to BBC Scotland’s Chris McLaughlin and says that some of the decisions and punishments handed down to the club have been ‘driven by bigotry’.

    Will we again be treated with silence to yet another outburst of this nature which could actually lead to trouble in the streets just to sell season tickets at Ibrox. What a pathetic little money-grubbing speculator of a man.

    • martin c

      I enjoyed the choice of music which played along with the interview towards the end “superstition, writing on the wall”.

      • Gopaul

        Ok,Paul some legal advice requires…..

        Do Brechin have case for claiming trialists were in eligible players?

        Seems odd a new club ???? With temp licence seeks to bend the laws in first game, if playing in rangers colours, then how can former player be trialists in true (legal) definition, is there string precedent, or has gers (and I mixed terms deliberately) started in new guise with same lax attitude to the law and cheap legal advice?????

  3. Interesting Paul – thanks for the guide through the legalities.

    So would I be correct in assuming that if Rangers (RIP) were stripped of titles as a consequence of the SPL’s EBT investigation, then it shouldn’t affect The Rangers FC, as they do not have any titles to be stripped of?

    • ecojon

      @Kenny McCaffrey

      That is taken care of by the fact that Sevco bought the ‘history’ of the oldco Rangers presently in administration and soon to be liquidated.

      Of course that brings us back to how many angels can dance on the point of a needle in that does that mean the ‘history’ which has ALL the titles.

      Title stripping would presumably come later than the liquidation of oldco Rangers – so and I am guessing here – that there is nothing legally can be done if titles are stripped to actually have them struck from Rangers newco’s listing of any titles as they were actually legitimately purchased from oldo and transferred to newco.

      That would mean the only way to strip the titles from the record would be by SPL or SFA fiat but given their recent performance with relatively straightforward issues I shudder to think how they will deal with this.

      • Marching on Together

        What is interesting is if the SPL convene a panel to hear the charges relating to dual contracts, and invite BDO as representing oldco Rangers to defend themselves form the charges. BDO say, not in the interest of creditors spending any more money on this rubbish, so happy to accept whatever you decide.

        I wonder exactly what the terms of the asset sale agreement from D&P to Sevco 588 Ltd say as regards appointing Green to represent oldco Rangers in these matters?

  4. Glasgow Ghirl

    Bit of a kick in the teeth to the creditors, I have to say. They void all their debts and it’s same old, same old, while everyone else is left to pick up the pieces.
    I’ve a few questions, if someone wouldn’t mind :
    What is the point of liquidation if they are just allowed to continue as they always have done (only debt free and more bitter than ever)?
    If they are still the same club, do they start with a 25 point deduction for still being in administration (assuming they still are at the start of the season)?
    Is there any sign of that report about the conflict of interest with Duff and Phelps yet? I’m sure the deadline for that was a while ago now.
    Thanks!
    GG

    • ecojon

      @Glasgow Ghirl

      Paul might be able to give a better answer but my gues on a new admin penalty would be that it is the same continuing admin/liquidation that they have already had points deducted for and that Natural Justice doesn’t allow being punished twice for same offence. I say this without having a clue what’s in the SFA rule book because I don’t think it matters as there hasn’t been a cheep about the possibi;lity of this being raised. So if it’s in the rule book they are ignoring it.

      The only thing about the liquidation would appear to be the power it gives HMRC to investigate matters including the administration and take legal action against any offenders it identifies especially in the period running before CW which the admin didn’t deal with as it was CW’s company that went into admin not Murray’s although I think D&P could refer any evidence it found to the liquidators or court supervising their admin for action.

      The D&P conflict has gone quiet but that isn’t really surprising because HMRC wouldn’t want much out in the open at this stage till it really gets its investigation underway. Hard to know whether they will look at this seriously or not and a lot may hinge on the decision of the Big Tax Case.

      So it’s complex and all sorts of things swirling about but no fixed time scales.

    • ADM

      @Glasgow Ghirl. Believe the story on the D&P conflict of interest report is that it’s pending Lord Hodge’s return from holiday. On the 25 point deduction, this doesn’t apply. The reason is the SFA’s separation of the football club from the company that owns it. RFC(IA) may well still be in administration but – despite their somewhat shaky business case – I don’t believe Sevco (soon to be renamed The Rangers Football Club plc) will be.

  5. ecojon

    Of course from Mr Green’s perspective it is Rangers that play at Ibrox not Company A or B – well that’s one point of view but by the time it gets to Company XYZ I think that even the Ibrox Faithful might awaken but it may well be too late by then. However, all will be revealed in the fullness of time.

  6. Gobsmacked

    Perhaps Mr Green should come out and name and shame all those bigots. Then identify the non rule driven or non democratic decisions taken against The Rangers FC. He showed his awareness of what his customers wanted with Sevco 0712 Ltd, Message sent SSDD.

    For a seemingly astute guy, he doesn’t appear to have grasped that there are people in authority bending / discarding rules to ensure his team get to play football. With the “conditional” license not very smart to pee off the guys who sign off on the deal.

    • He is anything but astute, IMHO he is as thick and his skin and more brazen then a 50p hoe with about the same value, uninformed and about as far distanced from reality that you can get. Usual bile from the same fountain , it did nt take him long did it. Temp memebership Friday 48hrs to spill the bile…

  7. mick

    under company house rules you cant use same name for a year unless its a place ,greens saying he bought the name but not the debt its company house rule breaking ,these rules are in place to stop companys dropping debt 1 day then starting back the next even at that you have to apply to get name back its all a scam rules breaking after rules breaking its a farce ,sevco are not in div3 on merit and you could say they are there on funny handshakes it will cave in in the end tesco by xmas

    • Althetim

      Thanks for the grins mick. I loved your early comment “it’s not over till it’s Tesco”

      Keep it up mate, good work.

      • mick

        @althetim div3 is cheating rules are rules the bdo have to answer all the questions were raiseing 15 years of cheating it should be game over for that

  8. Mick (no not that one)

    I suspect Charlie boy has been listening too closely to Murray and McCoist – bigotry my widescreen backside!

    • Mick

      Charlie is tripping out his tree worrying about paying the levy for the first home match they will be bust by Xmas there no money it’s simple he’s trying to keep the rivalry going to sell tickets he’s desperate with no dignity he’s caught the ibrokes bug passed to him from Sally

  9. mick

    oldco newco sevco tempco tesco

  10. mick

    the more green spits the dumpy the more its tesco as spl will report his comments

  11. Mick

    It’s not over until it’s Tesco. Brilliant

  12. ADM

    Many thanks to Paul for this post. Have been reading a lot of these assertions about phoenix companies and they didn’t feel right to me – I’d always assumed that those rules related to stopping people (directors/ owners) just shuffling off their debts and starting again as the same company. However, one small question – the nuance some people have tried to use to say this still affects Rangers is to point to Charlie Green as being a shadow director of RFC(IA) ahead of liquidation. Again feels like that’s not the intent of the law, but would be interested in your view.

    Have commented in the Brechin post about Green’s burbling about bigotry – someone really needs to take this man on one side and explain to him how dangerous some of this stuff is. Unless of course he’s doing it deliberately to promote season ticket sales which would in turn help him get investors. Oh, I forgot – they’re debt free and on a sound financial footing – why would they be worried about season ticket sales and new investors?

  13. ADM

    Just re-read that first para – could be clearer! My point was that I’ve always thought that the phoenix company rules don’t apply to Rangers precisely because none of the people setting up the new company were involved in the old one. It says a lot for the corporate governance of football clubs that the manager doesn’t count!

  14. Raymilland

    Paul
    In the event that BDO deem the purchase of Ibrox etc to be a “gratuitous alienation” of the real value of those assets; with of a court order being necessary to prevent the use of the name “Rangers”; and the main debt owed by RFC being social taxes, is any member of the public able to apply for such court order?

  15. JimBhoy

    There was a slight irony in “Rangers” going to injury time yesterday to survive the pawn-broker cup…

    Let’s hope big Goian stays…

  16. next prev Season Ticket Renewals Update
    1 of 1

    Replica Shirt
    Rangers TV
    Tickets

    Season Ticket Renewals Update

    Fri, Jul 27, 2012
    Tweet

    ON Monday the Club communicated season ticket prices for 12/13 and we are now in a position to confirm that all season ticket holders will receive a new season ticket renewal form in the post from Wednesday 31 July next week.

    Lifted directly from RFC.co.uk website, they don’t even know what day it is………………….skint skint skint

  17. p groom

    I never did believe that pish from green and ali that they wanted indeed insisted to go into div 3, before it happened. now they revert to type. green is a fool for even mentioning the b word. he has to be disciplined since he is now in a position of some influence in scottish football when responsible leadership is called for, not rabble-rousing. How incredible that the “assets” transferred to sevco apparently included all the character faults of the oldco.

  18. james larkin

    i cannot believe the shenannigans with the supposed transfer ban.

    is it or isn’t it ?

    the CoS said the the ban was ultra vires.

    so , if the sfa ignore the CoS ruling, where does this leave the rules?

    are the sfa going to stick with a rule which does not apply (in law) and consequently…breaking the law (if the ban is applied)
    or
    does the Appelate Tribunal have to re-sit and choose one of the other sanctions available to it ?

  19. ADM

    @james larkin – it was ultra vires, according to the CoS, as a punishment option for the original tribunal. However, the SFA have much wider powers on what they can set as conditions of membership – hence their ability to apply it now. So there’s not a problem with the CoS ruling – the SFA are clean on that one.

    However, your second point about the AT is an interesting one, and I haven’t seen a proper answer – hoping Paul will get to it at some stage. My understanding is as follows:
    - The AT is independent and must reconvene at some point following the CoS decision, although with changed membership following the resignations of Lord Carloway and the guy from Annan
    - I think they have two choices. They can either say “ok, the transfer embargo we originally asked for is now in place, our work here is done” or they can say “our chosen punishment has been set aside by the CoS, the fact it’s now in place as a condition of membership is irrelevant, we still have to choose an alternative punishment from the list of options we have available”. Since they’re independent, I can’t see how anyone else can have an input to that choice

    If they do go for an alternative punishment, their list of alternatives is (from memory): expulsion, suspension or kicking the club out of the Scottish Cup. There has been considerable controversy on the blogs about whether this third option is possible, on the basis that you can’t kick someone out of a competition that hasn’t started. My own view is that it doesn’t make sense to have a punishment option that is only available at certain points in the year, so if the AT said Rangers were kicked out of the Scottish Cup for 2012-13, they’d be supported by the CoS if it came to that.

    However, there was also a fair bit of noise that Rangers had been given the cchoice by the SFA either to accept the transfer embargo as a condition of membership or go back to the AT and take their chances on which of the other punishments came through. Given the AT’s independence, I don’t see how the SFA can make that offer – this may link to Lord Carloway’s resignation although, then again of course, it may not. Paul has written before about the possible causes of the resignations, although I think that was before the noises about the SFA giving Rangers a choice.

    (Incidentally, apologies to anyone offended by my using Rangers to mean a number of different things here. It’s just quicker than “Rangers” or Rangers/Sevco or whatever.)

  20. Glasgow Ghirl

    Thanks to ecojon and ADM for answering my questions, things are (a bit!) clearer now.
    For a long time, my theory has been that Charles Green desperately wants to commit “suicide by cop”. His initial intention was to asset strip what he could from ex-RFC but then got scared when the threats forced him into his safe house, so he is trying everything he can to have someone else pull the trigger but rules are being ignored and broken, accommodating RFC/Sevco at every turn and so it keeps on going…he clearly can’t beat them so has decided to join them. I actually felt sorry for him until his despicable bile yesterday.
    GG

  21. joe mccormack

    Hughie Green is a very dangerous man.
    Has he not heard his fans singing ‘nobody likes ue we don’t care.’
    Apart from the cheating and corruption Hughie, that’s why you are where you are today.
    Bigotry, yes indeed Hughie, there’s a lot of it in the air. Have a listen and look to your own support first before dragging others into it.

    The crassness of claiming that they will have no debt, a strong balance sheet etc is obviously lost on this buffoon.

    His reference to other clubs having to publish their accounts is an absolute classic.

    Yes Hughie, they do. Unlike RFC, RFC(IA), RFC(IL) or whatever your team is called today.

    There are many descriptions which would sit well with Hughie but FUD does it for me.

  22. cmh64

    Paul: A side issue perhaps, but the breach of operational rules Darlington were punished for was a refusal to transfer the football share to the new company, after the CVA was withdrawn and the assets sold off.

  23. Raymilland

    Put aside the debate of sanctions for dual contracts, and whether the rules are implemented ‘without fear or favour’. The main objective should be to establish the legality of the use of the name ‘Rangers’. The suggestion is that only a creditor may raise a court action to prevent the continued use of that name. I have still to be convinced that is the only option available to raise a court order to prohibit the name.

    In the event that a court prevents the use of their historical name; the end game would be swift.

    A liquidated High Street store could be prevented from returning to trade under the same name by a rival store looking to cash in at their rivals expense. It’s not impossible that same principle could apply to a football league. Within a few weeks of the RFC administration; there was a brazen attempt by Kilmarnock FC to build the Rugby Park brand as “the people’s club”, they obviously foresaw the opportunity to attract a certain type to Rugby Park in the event of a nuclear event elsewhere, their stripy scarves are the same after all, it would be a shame to see them gathering stour.

    Unfortunately the stoury scarves were back oot yesterday at Brechin.

    More seriously, if that we are genuine in condemnation of the shenanigans to keep them afloat; the torpedoes should be armed via a court order to obliterate the RFC name as a brand.

    Surely the issue of a ‘prohibited name’ is not so difficult a nut to crack.

    To date, there has been no desire to play hardball, there must be a legal mind out there wiling to step up to the plate?

    By the way, I am not suggesting that (ahem) Kilmarnock FC would raise any objections to the continued use of the RFC name.

    Keep on keepin’ on

  24. Pingback: That Was The Week That Was: Charles Green New Suit Edition. | The Celtic Blog

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