Monthly Archives: April 2012

Rangers’ Great Escape – The Bill Miller Plan? Or Speculation Based on a Careless Word?

“If it‘s a newco with a CVA on a side route then they can take control by 11 May.”

This line, being a quote from David Whitehouse at the end of the piece in Scotland on Sunday yesterday about the Rangers bids, got me thinking. I fully expect that I am making a mountain out of not even a molehill here, so I offer everything I write below with the caveat that there is no concrete evidence to prove this is the plan, other than my own suspicions.

I do realise that it is Bill Miller, trucking tycoon from the USA, who is looking to buy the club, rather than Machiavelli!

I also want to make clear that, despite references below to the wonderful film The Sting, and the BBC programme, The Real Hustle, I am NOT suggesting that Mr Miller is doing anything illegal, nor should anyone take that implication from what I write.

If it is correct, then it is cunning plan of which Baldrick himself would be proud! 

Health warnings in place, on with the post!

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Words are important. A legal training means that you are attuned, at least in theory, to the finest nuance in a word or phrase. It is reminiscent of the skills taught at High School for practical criticism of poetry and prose in English. What did the writer mean by that word? What connotation was he looking to create in the reader’s mind? Why say one thing, when another word might have been equally valid?

However, in real life, whilst important, many factors can get in the way of a careful analysis of what someone says or writes. When talking the precision one expects in writing might not be present. If asked a question, one might misunderstand it, leading to an incorrect answer, which fails to convey the intended meaning.

Taking all that into account, I was greatly intrigued by Mr Whitehouse’s quote mentioned above, which has got me thinking.

Mr Whitehouse made the above reply after saying that, if a straight CVA for the existing Rangers took place, this would be in effect for the start of next season.

But the newco with CVA on a side route has a very specific date added to it.

It is assumed that this is a reference to Bill Miller’s “incubator company” idea. That seems to consist of the following elements.

First, a newco buys all of the assets of Rangers Football Club PLC, including the players and the history, and also the oldco’s right to income, such as its debtors and prize money still due from the SPL.

Secondly, the newco plays as Rangers whilst a CVA is organised for oldco.

Thirdly, and finally, once the oldco has a CVA in place, oldco and newco merge, so that oldco continues, thus returning all the assets to oldco and the long and proud history is not lost.

Clearly that is an involved and complex process, rather more so than outlined by me in three sentences. So why mention 11th May?

The last SPL game for Rangers this season is on Sunday 13th May, at St Johnstone. Therefore the reference to 11th May must be taken, I think, as meaning that the deal can be done and implemented before the season’s end.

But surely, one might ask, how can newco organise all of the registration transfers and other formalities, such as the SPL share and club licences etc in only two days? Indeed, does transfer of all the assets to a newco before the season ends not in fact result in “Rangers” not completing the season?

Here is where The Sting and The Real Hustle come in to play. The best scams or ruses (and for the avoidance of doubt I am not suggesting any illegality on the part of Mr Miller or D&P, or indeed anyone else) come when what is being done is in plain sight.

The characters played by Paul Newman and Robert Redford in The Sting fool Robert Shaw’s villain by setting up a gambling den in plain view (of the gambling fraternity rather than plain view of the authorities of course). Their cards are on the table, so to speak, and therefore Shaw cannot see how he is being scammed, because, on the face of it, nothing is hidden.

In the BBC’s Real Hustle, blatant deception, carried out in the face of the “mark” results in outcomes which, if done with criminal intent, could make the tricksters a fortune, and lose the victim much.

Here Bill Miller takes the Redford/Newman role, and the football authorities play the “mark”, with the difference that, in this case, whilst in no way part of the “sting” I wonder if the “victim” might be quite happy to be scammed.

 

How Might It Work?

After what is, even for me, a lengthy preamble, how therefore might this work?

Let’s say that the deal can be done so that, on 11th May, the assets of Rangers Football Club PLC are passed over to “Rangers Incubator Ltd”. For the avoidance of doubt, there is no such company, at least under that name!

Let’s say that the deal concludes late on the Friday, once the SPL and SFA offices, and the courts, have closed for the weekend.

What happens on the Sunday lunchtime? Here is the key.

In this scenario, “Rangers” turn up in Perth and run out onto the pitch for the kick-off!

In that event, would the SPL spend the Friday night and Saturday trying to stop the game taking place? After all, it will be the same players, in the same strips, with the same fans. Would the SPL want to see several thousand Rangers fans arriving in Perth on a Sunday lunchtime, some expecting it to be perhaps the last game ever played by their team, but most rejoicing at the “rescue” carried out by Mr Miller?

Would the SPL want to declare that the match should not be played, thus causing the jubilant fans to feel that they, and their club, were being victimised again by the football authorities?

Might public order considerations come into play, and Tayside Police decide that the game should go ahead, rather than having to turn away the fans at the gate, the stadium being closed?

Would St Johnstone want to be seen as complicit in ending Rangers’ existence, because, if the newco was not allowed to play, that would mean that Rangers had expired before the end of the season, and thus its record would be expunged. Even if unfairly, St Johnstone would not want to be seen as partly responsible by closing the doors in Rangers’ faces.

The game gets played therefore, for all the reasons mentioned above.

So What – How Does that help Mr Miller and Rangers?

This is the clever part. If newco were allowed to play at Perth, and in doing so, as it is the same Rangers, in terms of players, staff, strip and fans, then newco would be slipping directly into oldco’s shoes and effectively claiming to own all of the assets, including the points accumulated throughout the season to date. This would be an attempt to blow a hole in the various regulations, rules and legalities which might be seen as blocking the way.

As far as the players are concerned, the TUPE Regulations would transfer over employment contracts and rights to the newco.

If the SPL decided newco should start at zero points, that still would not mean relegation, as a team in the top six cannot be relegated, even if its pints total is passed by teams in the bottom six.

I suspect the nucleus of this plan though is that newco IS, for footballing purposes, oldco.

If the SPL permits the game to be played on that basis, then, in effect, Mr Miller has won.

Because if the SPL tried to enforce its rules for season 2012-2013 by referring to issues of registrations etc, Mr Miller could correctly say that the SPL had already admitted newco, by allowing the referee to have the Perth game kick off at all.

Therefore, the argument runs, as newco ended the season as “Rangers” it is entitled to start the new season as “Rangers” too! As newco is not in administration, and indeed as newco might not have existed when oldco committed the offences for which the SFA, so far, has levied punishment, how can newco be penalised with, for example, a transfer embargo?

You might say that Mr Miller could not argue that, for one purpose newco is Rangers, but for another it is not, but that seems the logical approach (even if inherently illogical) to take. It is akin to an accused pleading that they have an alibi, failing which self-defence!

The key to a good scam is to have a willing victim. If, in fact, the outcome of the scam is something which the victim would be quite happy to achieve, then it makes it even easier to pull off. Mr Whitehouse has referred to Mr Miller being “nearly there” with his bid, following a weeks worth of discussions with the football authorities.

Rather than the frankly impossible request for written confirmation that oldco Rangers would not be penalised, could it be that some variation of this plan has been floated to the SPL? After all, how long does it take to say “please confirm Rangers will not be penalised next season?” and to receive the simple answer “No”.

It seems clear that, if Scottish football had its way, a “Rangers” would stay in the SPL. Financial interests trump morals. As a wise man once said “Principles are nice, but who pays for them!” Another wise man of my acquaintance said “You can’t eat principles!”

Whilst it would be wrong to suggest that the SPL would, or indeed could, give the green light to such a plan in advance, the hypothetical question could be raised, and the hypothetical answer provided which would show how difficult a position the SPL would be in, if it tried, having allowed newco to play a game, to stop it starting next season.

In such a case, if the SPL blocked newco for next season, then in the view of many, I am sure, Neil Doncaster’s organisation would be up there in the rogues’ gallery along with the SFA as being responsible for the “death” of Rangers.

So If This Happens, Will there be a Merger in the Future?

No. Why should there be!

If this plan succeeded, then newco would be in the SPL. It might not have a European licence for three years, as a newco, but would have no other penalty.

Oldco would have Mr Miller’s purchase price, but as I have mentioned ad nauseam, I don’t see this as producing anything for unsecured creditors. Therefore there cannot be a successful CVA and therefore there is a winding up of oldco.

However, that will not matter, as newco will have emerged claiming to own the history. In a sale of assets to a newco, Craig Whyte, as 85% owner, cannot block the sale.

In a sale of assets like this, it is very hard for a creditor to block the process either. D&P can clearly show that there has been very little real interest, and Mr Miller’s offer is the best they are going to get. The valuations of the fixed assets at over £100,000,000 are irrelevant.

The existing Rangers Football Club PLC disappears, but so what?

Won’t Someone Object to this?

Who would have the will and locus to do so?

Creditors of oldco cannot stop it. The administrators have the power to sell the assets of the company in administration.

The team relegated from the SPL might but I assume that the SPL might “sweeten” the parachute package to allow it to go through. I recall this happened some years ago in English Rugby Union where the team which won promotion was refused access to the top division, in return for a sizeable payment.

Would the SPL or SFA object? They might find this to be a convenient solution to a thorny problem.

Can other SPL teams do so? Probably not in enough numbers to stop it.

Is It Legal and is it Right?

If the limited companies involved, namely the SPL and the SFA, permit it, then, subject to UEFA involvement, it can happen. After all, the SFA and SPL can alter their rules if they wish and if they have sufficient consent.

The numerous legal and regulatory issues could be got round if the will was there.

Would it be right?

It would save a vital part of Scotland’s heritage, as Mr Salmond described it, and would rescue the “most successful football team in world football”. We have already seen all the arguments deployed regarding the financial “benefits” to Scottish football of Rangers surviving.

I suspect that many however would view it as a betrayal of sporting integrity that would ruin Scottish football for ever.

Conclusion

As I said at the start, this idea might be a complete flight of fancy. It might have no bearing at all on reality. However, it seems to be a credible explanation of why Mr Whitehouse mentioned 11th May.

 

 Posted by Paul McConville (with tinfoil hat and copy of the Warren Report by my side.)

 

 

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59 Comments

Filed under Administration, Football Governance, Insolvency Act 1986, SFA, SPL, Uncategorized, Unfounded Speculation

Where Stands The Rangers Bidding War? Is Either Bid in the Interests of the Creditors? Or Is it all Just PR?

 

 

In which I look at the most recent pronouncements by the administrators; the Blue Knights v Bill Miller battle; the appearance that Duff & Phelps are uninterested in the interests of creditors; the brilliant plan by Bill Miller; the inevitability of liquidation; and as an aside, the suggestion that Messrs Whitehouse and Clark of Duff & Phelps could themselves be summoned for bringing the game into disrepute!

 

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Rangers administrators, Messrs Whitehouse and Clark of Duff & Phelps (D&P), seem to be reaching the end of the road in the bidding process for Rangers. The final deadline, at least the most recent final deadline, has passed. Nearly 11 weeks have gone past in the administration process, with D&P’s costs running at over £200,000 per week.

After interest from Club 9, Bill Ng, a German consortium (did we ever find out who that was?), Brian Kennedy, the Blue Knights without Brian Kennedy, the Blue Knights with Brian Kennedy, the Blue Knights with Ticketus, the Blue Knights without Ticketus, and Bill Miller, we seem to have reached the final contest. Continue reading

37 Comments

Filed under Administration, Football Governance, Insolvency, Insolvency Act 1986, Rangers

Duff & Phelps – Have Delays In Administration Made Winding Up of Rangers Certain?

 

A blog post in which I pose some questions for Duff & Phelps regarding their plans and court actions, future funding, and whether they have taken sufficient steps to obtain information from all parties regarding Rangers’ affairs. If so, have Mr Whyte and Mr Ellis committed a criminal offence, and if so, have Duff & Phelps done anything about it?

Whilst a lot of work has been done by them in eleven weeks, how do they intend to keep the doors open until a bidder completes due diligence and signs a deal?

Has the stop/start process (some of which might rest at D&P’s door, but much of which has been caused by outside events) resulted in Rangers being unable to continue as a going concern?

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This week has seen the focus shift from the administrators of Rangers on to the SFA disciplinary process and the furore regarding the “anonymous” Judicial Panel.

I will pass over that for now, and pose a couple of quick questions for Duff & Phelps. It would be easy to forget that the administration process is still going on! I do not expect them to answer me, but some response might be forthcoming to someone.

An interesting piece was posted on the Web.3D.Law blog last night. This concludes by stating:-

“ If I am right, it begs the question as to why and how D&P are taking offers for the club in the first place, especially since Craig Whyte can block any action to sell his shares.

Are the administrators fulfilling a PR exercise?

Of course. They must they be seen to be doing everything possible to save Rangers.  Are they under instructions from CW himself to try and find a buyer? To me, the whole thing reeks of an exercise in futility – unless of course CW’s security is less than publicly reported, it makes no logical sense as to why he would sell to either bidder and Duff and Phelps have raised a lot of Rangers supporters hopes for nothing. Again.

 

The administrators of Rangers are very experienced Insolvency Practitioners. They are fully aware of the rules under which they must operate. To lesser mortals like me, some of their decisions seem baffling. I am sure that is my failing, rather than theirs. However, responses to the following questions would be of interest. Continue reading

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Filed under Administration, Football, Insolvency Act 1986, Rangers

RAngers (In Administration) v Collyer Bristow – Me At Scotzine

Andy Muirhead at Scotzine.com has been good enough to put up some thoughts about the case taken by Duff & Phelps, the Rangers administrators, against Collyer Bristow.

You will find them by clicking here.

I am in the midst of a longer version, the New Order 12 inch remix of Blue Monday, if you will, and will post it soon.

 

7 Comments

Filed under Me at Scotzine

Stewart Regan Speaks about Rangers Appeal – and Compromises SFA Independence in Doing So?

A blog post in which I question what Mr Regan had to say about the appeal, and in which I wonder if he may have, through inadvertence, compromised the SFA’s role as an appellate body. Plus discussion regarding Boycott.

 

Things move fast with the Rangers story. Today Mr Regan issued a statement in relation to the disciplinary findings against Mr Whyte and Rangers. I have added some comments which are in bold.

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Stewart Regan, Scottish FA Chief Executive: “In light of last night’s outcome from the Judicial Panel Tribunal, it is important to clarify the process through which such cases are heard.

“The Judicial Panel Tribunal is an independent body made up of three members appointed from a list of more than 100.

“The implementation of the Judicial Panel process was approved unanimously by all member clubs at last year’s Annual General Meeting to bring efficiency, transparency and independence to the execution of football rules.

“The Scottish FA acted on the advice of our members to implement a robust disciplinary system that reflected the demands of the modern game.

“The sanctions imposed by the Judicial Panel Tribunal last night are subject to appeal. As the Scottish FA is the appellate body, it is inappropriate to discuss the findings of this particular Tribunal at this stage. “ Continue reading

53 Comments

Filed under Football, Football Governance, Rangers, SFA