Craig Whyte and His Court Actions – A Quick Update, including Andrew Ellis v Whyte?

Mr Whyte is already embroiled in litigation personally, and through several of his companies.

However, the potential is there for even more expensive and lengthy litigation.

Let’s have a quick look, shall we?

 

Craig Whyte v the BBC and Mr Burns of the Insolvency Service

On 18th February 2012, the Scotsman reported that Mr Whyte’s much threatened court action against the BBC had been raised. This stemmed from the BBC Inside Story programme in October.

However, since then I have heard and seen nothing about the case.

As the media has written far more serious and damaging stories about Mr Whyte since then, one wonders if he has decided simply to let the matter drop.

As I have mentioned before, I saw little prospect of success in this case, but even if he did win his claim, what damage can there be to his reputation now?

For good or ill, Mr Whyte’s reputation would seem to be worth little.

The article quotes a spokesman for BBC Scotland confirming it had received a writ from Mr Whyte and saying: “We stand by our journalism, all the allegations made, and we will defend our action vigorously.”

Carter Ruck, the esteemed libel firm, still refers on its website to advising both Rangers and Mr Whyte in connection with the BBC programme. One assumes that we will not see an action raised by Rangers against the BBC.

Will Whyte v BBC ever see a court hearing? I doubt it.

 

Kim Whyte v Craig Whyte

Mrs Whyte took her estranged husband to court for an award of aliment (maintenance). This case settled in February.

However, Mr Whyte paid his first payment late, and did not make his second, so the case went back to court in March, as reported by the Daily Record.

The reports indicate that an order was made against Mr Whyte to pay his wife aliment of £5,000 per month, and in addition, it seemed that Mr Whyte was not represented at the March hearing.

He was, and presumably still is, represented by Harper MacLeod Solicitors in this case, as in another noted below.

It is an interesting fact that Harper MacLeod has been engaged by the football authorities to investigate contract and registration issues at Rangers. Some have suggested there is a “conflict of interest”, as Harper MacLeod also acts for Celtic.

The fact that the firm acts for the Chairman if a company it has been engaged to investigate is not, as far as I am concerned, a sign of concern, but rather indicative that the procedures and processes that HM has in place to prevent conflicts occurring, including use of Chinese Walls etc are robust and effective.

In due course Mr and Mrs Whyte might return to court for a divorce action, but a prudent businessman like Mr Whyte would do his utmost, one imagines, to reach a mutually agreeable settlement with his wife, rather than have more arguments aired in court.

 

One Stop Roofing Supplies v Tixway UK Ltd

It was thought that this case was over, apart from One Stop being paid. However, the judgement of Sheriff Ross has been appealed by Tixway (Mr Whyte’s company) as I wrote here.

HM also act for Tixway in this case.

They will not have appealed unless they consider that there are prospects, however slim, of success. If Tixway asked its lawyers to appeal simply to delay matters, then they would refuse.

From reading the judgement, there is a legal question which could be argued, but standing the terms of the Sheriff’s decision, I will stick my neck out and say that I would be astonished if the appeal succeeded.

However, it is likely to be some months before the appeal is disposed of, and One Stop remains unpaid.

 

Andrew Ellis v Craig Whyte

The new court action being threatened today is reported as an exclusive by the Daily Record.

Mr Ellis, who has been closely connected to Mr Whyte through the whole saga, is demanding 24.9% of the shares in Rangers.

He is quoted by Keith Jackson of the Record as saying:-

“I am owed 24.9 per cent of the entire club’s shares and I will be suing Craig Whyte for it.

“This was part of the initial agreement prior to the takeover and I have correspondence to prove it. At the time the solicitors sent all the documents through, Craig accepted the fact that I was getting 24.9 per cent of the club.

“My lawyers wrote to Craig on Thursday about this and we are awaiting his response. I do not trust his intentions for the football club and I want to do what I can to make sure the best interests of Rangers are being looked after.

“That’s why I have been actively engaged in talking to one of the bidders. I’ve been trying to assist them in their efforts to save the club as I am so disappointed with all the damage that Whyte has done.”

It is not clear if Mr Ellis is looking for 24.9% of Rangers Football Club PLC (in administration) as those shares might be worthless, or 24.9% of Rangers FC Group Ltd, which owns over 85% of Rangers. The latter seems more likely, as Group holds the security over Rangers FC’s assets.

Interestingly, Mr Ellis was quoted by the Press Association in February, and reported in various places, including the STV website saying:-

“I was totally unaware of the Ticketus situation and when I asked Craig about it he denied it. Like all the Rangers fans I feel duped but not only about that. Craig and I shook hands on a deal that would see me getting 24.9% of the shares after his takeover.

“I was to have a contract to come up to Scotland and run the club and my team were going to be Ali Russell and Gordon Smith. I knew Ali from his time at QPR and had met Gordon through Jim White of Sky Sports. Both Ali and Gordon joined the club before me. After Craig took over he didn’t want to honour our agreement and I had to chase him around for months.

“He has been trying agree a new deal with my shareholding much less but that still has not been completed and I have now handed my files over to my solicitor. But it wasn’t the shareholding that I was interested in, nor was it the property angle. I joined the board because I was interested in the challenge and opportunity of getting such a huge club back on track. Rangers is one of the biggest clubs in the world but I think the marketing of the club over the last 10 years has been appalling.”

It is good for Mr Ellis that, between February when he said that he and Mr Whyte had “shaken hands” on a deal, he has now found “correspondence to prove it”. That should make his court action easier!

Mr Ellis’ comment about the marketing of the Club over the last 10 years is interesting.

I am sure Mr Ellis genuinely wishes to see right prevail in his dispute with Mr Whyte. However (a) one wonders if he has taken any action in an effort to force Mr Whyte off the board of Group, or to leave himself. Board meetings there must be pleasant.

Secondly, it should help the bid he supports that he is taking a stand against Mr Whyte.

Will this case ever get to court? That depends, I think on other litigation there might be.

 

Duff & Phelps v Craig Whyte/Group/Liberty Capital (or vice versa) No 1

This is potentially the “big one” and might be the key to resolving the whole Gordian Knot (I know a key did not resolve that but excuse the mixed metaphor).

If D&P decide that Group’s Floating Charge is invalid, and this he is not a secured creditor, this will need to be decided by a court. If D&P choose simply to ignore it, Group/Whyte will go to court.

More likely D&P will head back to the Court of Session for a Direction as to how to deal with it. This issue could prevent D&P disposing of the assets of Rangers until it is resolved, or at best, allow an asset disposal with the proceeds of sale being tied up in legal battles for years pending a decision about who gets the money.

It will be very difficult for anyone to purchase Ibrox Stadium whilst the matter is under dispute. This court action could be long and will be costly.

 

Duff & Phelps v Craig Whyte/Group/Liberty Capital (or vice versa) No 2

If D&P attempt to unravel the whole purchase and have Mr Whyte’s buying of Rangers declared invalid, then this would be a separate case to that mentioned above.

Mention was made in the Ticketus case of “financial assistance”. This was raised as an issue striking at the Ticketus contract, but that in the context of illegally funding the purchase.

I think a “financial assistance” claim is doomed to fail.

Should D&P succeed in having the sale declared void, then MIH would own 85% of Rangers again!

I suspect that Sir David Murray, or indeed Lloyds Banking Group, would not want to find the Rangers “hot potato” landing back in their laps again!

 

Ticketus v Whyte/Group

Mr Whyte has said that he has personally and through his companies guaranteed the Ticketus deal, to the tune of £30 million.

If Ticketus end up out of pocket with Rangers, they will come knocking on Mr Whyte’s door. Further court action is likely then.

 

Collyer Bristow

Funds formerly held by Mr Whyte’s London lawyers are held in abeyance pending a case to decide who owns the cash. More will be heard about this next week. Mr Whyte, with various hats on, is claiming a share of these funds.

 

Conclusion

Mr Whyte’s efforts to keep the legal profession employed continue.

 

Posted by Paul McConville

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16 Comments

Filed under Administration, BBC, Craig Whyte's Companies, Daily Record, One Stop Roofing Supplies Ltd v Tixway UK Ltd, Rangers, Whyte v Whyte

16 responses to “Craig Whyte and His Court Actions – A Quick Update, including Andrew Ellis v Whyte?

  1. Great post..

    Craig Whyte claims at every turn that his actions are the result of “professional advice”. He’s like Schrödinger’s cat, stuck in a superposition between evil genius and hapless patsy. Only by opening the box do we find out which it is…

    🙂

  2. NeutralAxis

    A new regime for season 2012-2013 ?

    I think not.

    There isn’t a scout pack in the country who could untangle this sorry mess in time for that to happen.

  3. Joseph

    Thanks Paul. You continue to keep us informed of developments, bringing the whole thing brilliantly together. I know it’s not your intention to put the newspaper industry out of business, but with blogs like yours who needs them? Such is the advancement of new technology! I am lying here in my bed, suffering from the flu, reading your words of wisdom on my iPad 2. It doesn’t get any better than that. Not so long ago, I was instructing the case room operator on the Daily Record where to place the lump of lead on the page! There’s a lot more to come on this pathetic Rangers’ saga. Perhaps we will all emerge from it as a better society. Thanks again.

    • gopaul

      pearls of wisdom and clarity indeed.

      But the papers will draw this out day by day, thread by thread… as thats how they need to operate – if they tell us the ending on page 1 – we wont buy the paper day after day after day….. one wants drip drip drip…. sometimes.

      nice to have both ….. 😉

  4. Goosy

    Duff & Phelps v Craig Whyte/Group/Liberty Capital (or vice versa) No 2
    Paul
    Surely this is the court action which offers HMRC the best opportunity to be paid and therefore an action which they would support on maybe even take on board themselves ?
    Meaning
    If ownership of RFC reverts to MIH then LBG will be liable for either winding them up or forcing RFC down the route of repaying a massive LBG loan made to RFC to satisfy HMRC and other creditors?
    What do you think?

    • merklandroad

      LBG would then be secured if the deal is subject to rescission. The variable is what happens to Ticketus in these circumstances and whether that deal also would be unravelled. It is not expressly part of the transaction under the terms of the documents. Messy. Can’t see it happening in practice, and not sure it improves HMRC’s position in any event.

  5. Carntyne

    Since Sir (IA) David Murray was only too happy to sell to Craig Whyte for a shiny £1 coin notwithstanding the fit and proper rule, there is just no way Murray or LTSB will want the shares back.

    If they say they don’t want the shares, who would they then belong to?

    Trying to work out all the intricacies of this fiasco would give you a sore head.

  6. Red Etin

    Thanks for this update. One wonders what accounts are available to cover the legal expenses; the various solicitors will want to be sure there are funds to cover their fees.
    On another tack, Paul, do you think that the main players are seeing their plans working out, or unravelling before their eyes? Are they guided by long-term consideration, or instinct and snap judgement? Are they waiting for the next surprise; are they figuring out their next move? Who is talking to whom? It’s impossible to get into their minds.

  7. merklandroad

    Thanks for the good summary of potential actions. There’s certainly a long way to go yet. Just on terminology, in these pc days, I believe the term used in relation to Harper McLeod would be “information barrier”. Perhaps though we could substitute “Hadrian’s Wall” given the approach of the MSM to these matters…

  8. duggie73

    Is there the potential for a Ticketus vs Ticketus’ lawyers + their insurers case regarding the advice Ticketus received over what jurisdiction would apply in the event of RFC’s liquidation?
    Or did I make that up?
    I’ve a suspicion that if Ticketus are recompensed for their losses through the above, they less likely to pursue Whyte/Liberty 1/Liberty 2/Group for the debt owed them in the event of a breach.
    Altogether now..” We can’t go on together…”
    Sorry.

  9. SouthernExile

    Paul
    Not much here about Collyer Bristow….hope it’s not a case of the legal fraternity closing ranks!

    Who would be a CW partner now? Investment scheme (unrelated to this) gone wrong and on the end of a potential £50m claim. PI insurers seem to have been asleep and being pursued by yourselves. Bunfight in court next week over £3.6m from your client account and duff brothers sabre rattling about further claims (off topic – unmentioned potential worst victims in all of this are Worthington Group pensioners who had £3m of bonds liquidated by their Trustees (who are they?) for a “special investment”). Gary gone AWOL and dear knows what else to come!

    Left the west of Scotland cesspit 40 years ago and hadn’t read a word on scottish football since until becoming transfixed by all of this a couple of months ago.

    Keep up the great work. Front seats for all the action next week! Creditors meeting should be a stinker!

  10. SouthernExile

    Stonker not stinker – autocorrect not very bright!

  11. I wonder how many of these have fallen and how many are still “live”.

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