Well, what a day today! Whilst I had thought that Mr Miller’s hopes of doing a deal by 11th May were optimistic, to say the least, I did not expect to end today with him out of the bidding.
As is my wont, let’s have a look at the statements by Mr Miller, and from Duff and Phelps, and see where this takes Rangers now.
As always, my comments are in bold beneath the relevant part of the original.
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“As soon as I was announced as preferred bidder for Rangers, my team began to press ahead with our due diligence.
“Until then, information had been limited to what was made available in the internet data room and questions addressed to the administrators and their staff.
Preferred bidder status was granted on Thursday, and by Tuesday he was gone. That suggests some bombshell hit him in the period after his people got access to the books, or else something happened over that period.
“In addition, I had preliminary discussions with the Scottish Footballing Authorities and limited discussions with Ally McCoist.
“Upon being named preferred bidder, discussions with Rangers staff started and discussions with all interested parties intensified.
“We continued to work through the holiday weekend in order to meet a very compressed schedule.
“By late Monday night, it became clear to me that preliminary information, discussions and analysis were, unfortunately, more optimistic than reality.
Mr Miller’s preliminary information, discussions and analysis will have come predominantly from D&P. They might consider that he is pessimistic and he might think he is optimistic. Bearing in mind that Craig Whyte’s due diligence took around six months, it seems remarkable that four days was enough to end Mr Miller’s interest. Either he was not serious in the first place (a theory prevalent amongst some Rangers fans) or what he found was immediately fatal to the plans.
“Having no intention of negatively affecting the potential outcome of the club’s future and after hearing the message from Rangers supporters and fans loud and clear (“Yank go home!”), I notified the administrators today that I have withdrawn my bid for Rangers and will not be moving forward.
How did Mr Miller think he would “negatively affect” the potential outcome of Rangers’ future? Was he told that, for example, his “demands” for written guarantees of no penalties for Rangers next season were unacceptable, but that someone else in charge might have a fairer hearing? His phrase is an interesting one, but I suspect it will not be clarified.
As far as the message he describes as being received from Rangers supporters, again some of the Ibrox faithful are disputing whether all of the anti-Miller communications came from Rangers fans at all. I think all would agree though that, whilst Mr Miller was the preferred bidder for D&P, he was most definitely not the preferred bidder for Rangers fans.
He has been criticised for not visiting Ibrox and for not engaging with Rangers fans. According to his statement, he listened to his prospective customers, and “walked away”.
If he had taken one piece of advice from Mr Whyte, it would have been to learn that there would be huge scrutiny of his public and private life, which seemed to surprise Mr Whyte when he was caught in the glare of publicity.
“I am deeply disappointed as I had considered the opportunity to bid for one of the most historic football clubs in the world, an honor and a privilege.
“I wish Rangers fans, supporters and employees my very best. I hope all your dreams and wishes come true. You certainly deserve it.
“I am most disappointed that I won’t have the opportunity to walk into Ibrox Stadium on the day of an Old Firm match as my friends tell me the hair on my arm will stand up and I will never witness such passion and spirit at any sporting event.
“God Speed, Rangers!”
His words are complimentary towards the club and the fans. His statement seems to be a very tactful one. He could have said, if it is the case, that he wanted to run screaming when he saw the books, for example. The books though might be a bit of a red herring. After all, he had already bid his £11.2 million to buy Rangers’ assets, lock, stock and barrel. He was not buying the ongoing business. Therefore existing contracts and liabilities were of little concern to him. The only existing contracts he was taking on would be the players’ wages, effectively.
Maybe he had been misinformed about the rights of the players to leave on the changeover? Maybe he had been led to believe that there would be no penalties from the football authorities, after his initial request?
In any event, his greatest criticism lies for D&P for being more optimistic than realistic.
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Duff & Phelps then responded. D&P have been subject of criticism for the unusual way in which the administration has been carried out. Some of their statements have been apparently confusing. I have noticed that they spend a great deal of time talking about their duty to the fans and the team, and comparatively little about the duty to the creditors.
Against that background, how would they react to Mr Miller’s dignified statement?
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David Whitehouse, joint administrator, said: “We can confirm that Mr Bill Miller has decided not to complete his purchase of Rangers Football Club.
“Since Mr Miller was announced as preferred bidder on Thursday of last week, it is regrettable that more progress could not be made to further the sale of the Club.
“We have been informed by his advisors that there were a number of issues with which he felt uncomfortable including legacy contracts, the limitation of potential revenue streams and the expectation of required investment.
I can well imagine that D&P genuinely regret that the deal could not go forward. I suspect that both in England and at its US Head Office Duff & Phelps would be delighted to be out of the Rangers mess. However, is it wise to detail what Mr Miller thought was wrong with the deal, especially as Mr Miller did not do so?
If Mr Miller, the preferred bidder, is not happy with “legacy contracts, the limitation of potential revenue streams and the expectation of required investment” then how do D&P expect other bidders, who were “un-preferred” to do so.
Legacy contacts? Presumably only the players’ deals. Maybe the increased contracts given by Mr Whyte last summer, at the same time as he was talking about cutting costs, were an unexpected surprise. Maybe Mr Miller did not realise that, as a new owner, he could not simply rip up existing contracts. I don’t know if there is the equivalent of TUPE in the USA, but even if there is, I suspect it does not work the same way.
Limitation of future revenue streams? This is either Ticketus or the European ban. The position about each is quite clears, at least as far as buying the assets for a newco is concerned. What did D&P tell Mr Miller about these issues? If not them, then what else lurks beneath the Ibrox surface?
Expectation of required investment? “I was told that my £11.2 million got me this money making machine. You mean, gentlemen, to tell me that you want me to fund the business as well? I’m out!”
Or else – “Mr Miller, the fans will expect you to buy Lionel Messi and Wayne Rooney. So if you can write a cheque for £65 million for working capital, we can crack on. Mr Miller…hello…the line’s gone dead…”
“As in any company takeover, the selection of a preferred bidder does not guarantee the completion of the sale. In this case, with time and money for Rangers running out quickly, it was essential to move the process forward with urgency. Mr Miller’s bid was deliverable to creditors and was the only deliverable bid on the table at that time. We had no other unconditional bid.
I mentioned before about the Ratner-esque reference to the toxic brand of Rangers made by D&P. Here we go again! Time and money running out quickly!
It is interesting that D&P say this was an unconditional bid (or at least they imply it was). But it cannot have been. It was conditional, at the very least, on due diligence being conducted. If someone were daft enough to make an unconditional offer without due diligence being carried out, then D&P would bite their hand off to conclude the deal. The danger in making an unconditional offer is that, if accepted, there is a binding contract.
This suggests that a certain number of conditions = unconditional which is an interesting use of language.
So the only deliverable bid is off the table. What now?
“Given the fact that Mr Miller did not enter into an exclusivity agreement, we informed all other known potential bidders at the time the door was not closed.
I’m getting confused now. Because there was a preferred bidder, D&P contacted the remaining interested parties and asked if they wanted to gazump him? On that basis, what was the advantage of being declared preferred bidder? In track cycling at the top level, the cyclists compete to go the slowest round the track till the last lap or so, on the basis that the one behind can start their sprint before the leader sees them doing it, and thus the better position to be in is at the rear.
Did Mr Miller know that as soon as the congratulatory press conference on Thursday had taken place, with Mr Miller being anointed as preferred bidder, D&P were on the phone to the other bidders asking them to come back in?
Mr Whitehouse said on Thursday “In terms of the structure it is the only one that can deliver certainty in a short period of time so overall we think it is a great step forward.
“We have met with leaders of fans groups in the last week and I think across the board everyone accepts that Bill’s bid is the right bid for the club in the right structure and in the right form.
“That way the history of the club can remain intact and the views of the fans have definitely been taken into account in this solution which provides Bill and his team with a stand-alone entity which isn’t tarnished by the toxicity of the existing business but at the same time allows both to be brought back together at a later date.
“The major creditors – including HMRC – are aware of the structure of the deal that is being proposed and one of the advantages of this structure is that it is deliverable so we as administrators can conclude that deal.”
No mention of looking for other bids, nor of the risk that preferred bidder status without exclusivity was such a poisoned chalice. Mr Miller knew, I assume, that he did not have exclusivity. He might not have expected D&P to be looking for new bidders!
And again on Thursday Mr Whitehouse referred to the toxicity of the existing business. He’s not doing a great job of selling it, is he?
“As a consequence of Mr Miller’s bid being accepted, three other bidders have come forward to express their interest in buying the Club and these offers are being evaluated with the utmost urgency. There is every opportunity for these bidders to now complete the purchase of the Club prior to the end of the season.”
But all is well! There are three new bidders (from the parties who expressed an interest before). It seems unusual that they came forward as a result of Mr Miller’s bid being accepted. That seems like a good way to waste money on legal and accountancy fees!
We are now at Tuesday evening. The SPL season finishes on Sunday. Therefore the last day to do a deal properly prior to the end of the season is Friday, this week.
I have been blogging about all the hurdles in the way for Mr Miller. If it was going to be impossible for his deal to be dome in over a week, how much more impossible in three days!
There comes a point where there is very little more that can be said, as the absurdity of the situation beats any commentary that can be offered. We are at that point now.
Maybe there is every opportunity for the chosen bidder to finish things by the end of the season. There is every opportunity for me to win gold in the Olympic 100m this year. However, whilst the opportunity is there, the reality is well nigh impossible.
In the same way, how is a bidder going to be accepted, do due diligence and get SPL and SFA approval, all in three days?
I am sure that D&P have a clever plan. They must have because otherwise it would just look as if they were floundering about in the dark, with no idea from one day to the next what was happening.
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So Whither Rangers Now?
We are told there are three “offers” on the table. There was some Twitter discussion earlier about whether these were just expressions of interest. However, D&P clearly say “offers”. “Offers” are capable of acceptance. D&P won’t have invented them.
But bearing in mind that a stand alone CVA has been ruled out, and that all the mad rush was to avoid the new penalties by getting a deal don by Friday, where does this leave D&P and Rangers?
There can be very little cash left.
The players’ wages go back to full levels after the May salaries are paid. There can be no season ticket income till it is sorted out whether or not Rangers will exist next season.
There are no more games to play, and even the Express’ story about a money spinning tour of China in July won’t help.
D&P have effectively acknowledged that the first purpose of administration, keeping the business going as a going concern, cannot be fulfilled. Now the question is whether they can get a better return for creditors through administration than by liquidation. Standing that the Blue Knights’ bid was reputed to be around £5 million, then if D&P can keep going till June and sell every possible player than, that might justify keeping going.
However the reluctance of players to be sold, and the fact that the agreement allowing wage cuts permitted players to leave for little or no cost means that there may no longer be any value in keeping going.
The case for pulling the plug and stopping the outflow of money becomes ever more compelling. In addition, D&P’s charges have been running at around £200,000 per week. If they have spent a full holiday weekend engaged in discussions with Mr Miller, than the charges over recent times will have gone up, not down. The bill could be nearly £3 million by now.
On what planet is this in the interests of the creditors?
Posted by Paul McConville
Random Thoughts Re Scots Law by Paul McConville 
3 offers, aye right. It looks like you will need £100m to pay the debt. Its more likrly that buyers will wait for liquidation then swoop for the assets. Will that e good or bad? Only time will tell.
I am a retired insolvency practitioner – I’m 64, but I hope that I still have an ‘active’ mind! Since the Rangers ‘situation’ started, I’ve been trying to work out what is the Administrators’ strategy, but I’m afraid that I’ve not been able to do that! I’m rather concerned that the Administrators seem to be talking about the ‘interests of the club’, whereas my understanding is that they should be acting in the interests of the creditors. However, I may have misunderstood the comments attributed to the Administrators. I’m also surprised that the outcome of the ‘correspondence’ creditors’ meeting does not yet appear to be known – nor whether a Creditors’ Commitee has been elected and, if so, who are the members of the Committee.
Does anyone know what is the result of the creditors’ ‘meeting’?
Good post.
D&P seem to have completely lacked a strategy since they were appointed.
At the beginning I was surprised at the amount of communication coming from them. Over time the quantity of communication has tailed off and the quality has been abysmal.
They don’t seem to have got to grips with the real issues. It is not easy but they are paid a lot of money.
Excellent, Greg72, and at last I’ve read something from someone with some working knowledge of what an administrator would normally do – and you can’t work out what D&P are doing either (well, apart from running up a bill that looks like it’ll be higher than any bid for the club)! So I was right, they ARE rubbish!
So what to do in a couple of days? The following, I admit, could be a bit too fanciful for some, but given the nonsense that’s been said and done on since Valentine’s Day, maybe it couldn’t be that much outwith the realms of possibility….
Now, didn’t I read somewhere that D&P were in fact the preferred administrator of Rangers’ biggest shareholder and secured creditor? I’m not very good on Scottish company law (or any law for that matter), but could it be that a certain ‘Whyte Knight’ may come in, even in some proxy form, and find a way to keep things ticking over until August, thus allowing the club to be acceptable to the SPL for next season (however wrong and unsavoury that prospect is for right-thinking folk, or any normal human being for that matter)?
Of course, this Whyte Knight (I wanted to use a word that rhymes with ‘Whyte’ but this is a respectable blogsite) would no doubt attach a load of conditions to any such short-term rescue, and by that we can probably guess they will be aimed at getting his hands on the £30m or so that he keeps saying is his due.
And of course, D&P, being his men, will have done such a fantastic job of creating the situation where the club may HAVE to ask the devil to help them.
So Rangers could be playing in the SPL next season, thanks the the guy who shafted them, but they could well need somewhere to play, as CW will no doubt do what should have been done all along – sell off as many assets as it takes to make up the shortfall of what is owed to the world (as well as rescue what’s left of their reputation). Of course, Whyte will have first dibs on any monies garnered in this way.
So maybe a groundshare then? Now which Juniors team is nearest to Ibrox? Maybe they’ll have some problems with facilities, but I’m sure the SPL will find a way of accommodating them, as they always seem to do… .
I’m STILL wondering who is looking after the interests of the Rangers’ creditors!!!!!
Duff and Phelps have seemed to me like dodgy characters from the word go, and nothing they have done since has changed my opinion.
Their connection with Craig Whyte should be very worrying for Rangers fans.
Could this charade simply be a deliberate series of way stops on the road to liquidation?
The sudden re-appearance of Whyte’s smiling face in a tabloid newspaper today would chill the blood.
Is this the final act before the curtain comes down, Rangers fold, and Craigy rides off into the sunset with a nice little earner after selling the assets of Ibrox and Murray Park?
Nothing would surprise.
So grateful Paul for all your detailed analysis. So glad I now never use MSM. Keep up the great work
I’m stumped! I’m shaking my head in bewilderment! Who wants to watch TV or read newspapers these days when blogs like this are the best circus in town. And apparently Mr Miller agrees. He, too, has been dipping in to read some words of wisdom. So where do we go from here? Watch this space.
Paul – I don’t think Rangers can sell players come 1st June as the transfer season does not open until 1st July.
This would mean a complete month of full wages for the playing staff.
It’s highly unlikely that there is sufficient cash to fund this, together with the usual expenses of runing a club in the close season and Duff & Phelps fees on top of this.
This is perhaps the reason why Duff & Phepls keep referring to 31st May as the day when the cash runs out.
Great blog Paul. One thing though. There is a core of misdirection running through D& P’s utterings simnce they came to the party. I’m not so sure that their definition of “offer” is the same as yours.
Flannel, pure and simple I suspect.
Outstanding Paul. It would appear that that nobody is thinking of the creditors at all. The only thing of importance seems to be that Rangers survive with their history intact. And they want to do it without receiving any penalties of any kind. Incredible. Stuff the creditors. Me. Me. Me.
No dignity. No apology. No sporting integrity. No reason left to live.
There is a plug due pulling.
There are no ‘offers’ on the table. No ‘offers’ in a contractual sense. I went to buy a car for my other half today and told the guy i would be “prepared to give him £x for it if he replaces the tyres and buys a years road tax”. Was that an offer?
To Duff&Phelps perhaps, but it is rather qualified, to say the least.
The last few days i have been thinking that, as the noises being made had been hinting, Rangers would be marching into the SPL next season and everyone else would need to just like it. Let’s be honest: that is what was being hinted at by the mass media.
Today, another setback, another stupid statement from Duff & Phelps (remind me never to approach them re: insolvency matters), and i really really do not see what happens with Rangers here other than closing the door, locking the gate and walking away.
Millers statement, to me, reads that whatever he has discovered within the Ibrox books; it wasn’t pretty. It was a lot uglier than anyone on here, RTC, or even the fans forums could imagine. I reckon there is yet another undiscovered elephant in the Rangers closet.
Maybe,perhaps,one day,eventually,wherever….we might find out
Murray who wasn’t that bright let’s face it (engaged in many a strategy that went sour after the initial fast buck) sold Rangers to an idiot who then placed the club in the hands of dumb and dumber. The book title will be:
Rangers: Stupidest Death Ever.
Hoist by their own petard.
Petarded.
Good eveining Paul,
I believe Bill Millers original plan was to sell the high wage earners to finance the expected first year loss , this loss was calculated using average crowd attendances, season ticket sales and a one year ban from Europe.
After the briefest of diligence Bill saw the same elephants in the room that we all saw, both sides of the equation were non-computational.
Transfer amounts would be a wild guess, negative fan response to newco threw ticket sale projections out the window,, and most importantly a newco woud face European exclusion for 3 years, plus other certain sanctions.
All his income streams became imponderables and all his outgoings trebled, would Rangers fans fill Ibrox for 3 years with no European and few domestic prizes at stake.? I would not bet 11.2 million on it.
Rangers are in a Catch 22 position, their business model needs success in Europe and at home to balance the books, and they can not afford the price of success nor the cost of their failures. Ticketus considered the financial implications of more domestic penalties sufficient reason to withdaw, this was without a 3 year European ban. They are experts on ticket sales and they considered them to be too risky.
Rangers cannot financially survive as a newco with more than one years penalties, its either a CVA ( inc Ticketus) or a firesale.
p.s. D&P have the power to raise money to fund their administration, this can extend the period required to get a CVA through, providing the CVA is bringing in more than the next highest bidder..
I assume two of the new bidders will be newco-oldco candidates or asset strippers.
Liquidation is avoidable but only if Ticketus are guaranteed their money.
My eternal optimism is creeping ever closer to blind faith.
Frankly Niall, I couldn’t care less about Rangers catch 22 position, or any any other position they find themselves in.
You, as is the case with most Rangers fans, concentrate on how poor Rangers are being kicked when they’re down, and forget totally the offences they have committed which amounts to cheating every other SPL club for at least ten years.
I’d be more impressed if I heard contrition and an intent to put right the wrongs they have done, instead of the stomach churning bombastic shouting about how Rangers can be saved from rightful punishment.
D&P should change their name to Laurel and Hardy or Morecambe and Wise as the new name would more accurately reflect what they do. Seriously, are they having a laugh? They may make me look a fool by the end of the week but I don’t see the bookies giving goods on it.
The only way the club sale could be completed by the end of the season is if D&P had a plan that would astound even the great Baldrick. This could be achieved if the new buyers have already completed (or started) due diligence, are willing to pay creditors a reasonable return via a CVA and have lots of working capital to see them through to next season.
Paul Murray of the Blue Knights let it slip last week that they were in the middle of due diligence when Miller was announced as preferred creditor. This comment slipped quietly under the radar in the MSM but now seems highly relevant. Has this strategy by D&P always been about the Blue Knights?
The only problem I see with my “theory” is that the Blue Knights do not appear to have the working capital. They struggled to raise 500k when the chips were down so this would suggest there in not a lot of disposable cash on hand. Even in the best case scenario for their bid, D&P would eat up approx 3 million of their 5 million. This would leave 2 million to get them through until season ticket money started to flow.
The major difficulties I see for any prospective buyers going forward are the Rangers fans. Old Firm fans are a needy and impatient bunch. Will Rangers fans understand, much less appreciate, that most of the better players will have to be moved on and that the lack of European games and probably domestic success could last for more than a year? Any new purchaser, as intimated by Millers spokesperson, will have to deal with the expectations of grandeur far above their current circumstances.
Many of the other obstacles mentioned in Pauls excellent analysis and Nialls comments above clearly show that prospective bidders face a mammoth task of Herculean proportions that will take the wisdom of Solomon, the wealth of Midas and the cunning and charm of Gollum to see it through. OK that was a bit OTT but you get the point.
PS I don’t always agree with Niall but appreciate that he (and other regular posters) takes the time to present his points in such a clear and concise manner that helps me make sense of this intriguing tragedy.
Morning Richboy,
I don’t believe TBK-BK have a shortage of funds, they are businessman and do not want to waste their investment shoring up endemic losses for 3 years or paying over the odds for a loss makng business. There is a rough formula for buying profitable companies, you add the market value of the assets to 3 years average profits, plus a valuaton of goodwill. Rangers are the other way round, one has to deduct the 3 years losses from the asset values, and there is no goodwill for 3 years.
I must repeat the obvious, there has been no substantial bids for the liquidated assets from a non-footballing source, we can speculate all we want about how much they should or could be worth, they are only worth what someone is willing to pay. BM only valued the assets at 20 million with a one year loss provision,and he pulled out. The stark reality for everyone is the assets are now worth less to any football source and NEXT TO NOTHING to a non football source.
Rangers assets are purpose built for a business model that will not be fit for purpose for 3 years, in effect Rangers assets without a CVA are almost worthless in liquidation or as a newco.
Niall,
An interesting post and an honest one too. However, I must take a different view to you, in that while I agree your assertion that the assets are next to worthless, I would add the qualifier “at this point in time”. Given the emotions and the risks of intimidation by certain parties, it would not be sensible for a non-football investor to come in with an offer for the fixed assets. However should liquidation occur then an auction of the assets would raise money, as any and all parties would be hopeful of being free of intimidation as the liquidation had already happened.
A rough calculation with some assumptions might be as follows. I acknowledge that this might be a bit brutal to consider, and I am sorry if it is found to be so.
Items such as the seats would become collectors items (being offered the former season ticket holders first) and could be sold for say £100 each (£5.8M) together with a certificate of provenance. I’m sure that plenty of Celtic (and other team) fans might be interested in having one too, but for completely the opposite reason. Similarly, there are approximately 240,000 6″ squares of turf that could be mounted and sold for £25 each, again with a certificate of provenance, which would raise another £6M. And then the trophies, medals, photographs et cetera would have a value to a collector, say £200k (a complete guess). And perhaps the biggest thing to offer is the opportunity to own the image rights to the badge and crest which would allow a whole range of Rangers nostalgia strips, shell suits and the like. Let’s say 50,000 strips a year at £30 each that’s another £1.5M. Sales could be continued over say 5 – 7 years before people suspected that there was something cynical going on. That gives something around £9M.
So a sale of these assets might be worth 5.8 + 6.0 + 0.2 + 9.0 = £21M
Given the size of the Rangers’ fan base it seems possible that there could be a profit to be made out of the ashes of the football team, much as Elvis still makes a buck nearly 40 years after he died.
If the process of due diligence has at a very early stage scuppered the bidder “preferred” by the administrators, what does that say about the prospects for the three surprise bids now revealed? Presumably their information at this stage extends no further than the “internet data room” from which Mr Miller obtained his preliminary financial data. The secrets within the inner chamber now await their interest. Unless one or more of them is intent upon rescuing Rangers at any cost will they not be drawn to the same conclusion as Miller: all things considered Rangers is not a viable proposition? And if they are intent on throwing their money at Rangers with no prospect of a return, why would they have waited until now to do so?
The game looks very much to be up this week, the administrators having achieved their primary objective: to get through until the end of the season before flogging the assets.
Entertaining and informative read as usual Paul.
I’m not an insolvency expert but from my position of ignorance, with the only “acceptable” (that’s a laugh) bid now removed from the table, I would think that the interests of the creditors would be best served by immediate liquidation. Why continue to run up expense with no income? That can only mean less for the creditors or am I missing some salient point?
Let the auction commence.
Would it be safe to assume (not that you can take anything for granted in this administration) that whoever set up the ‘Rangers Aquisitions Ltd’ through the lawyers last week saw this coming, or are we still thinking Miller was behind that?
@allthetim
Your bang on. The costs are mounting hugely. Dumb and Dumber are spending money like a shipful of drunken sailors without a penny of season ticket money or any home games to bring in extra revenue. They are supposed to be there to get the best deal for the creditors. Could someone with a bit of knowledge on this hazard a guess at the value of the liquidation pot compared to what a CVA would offer the creditors.
Surely that’s the most important thing to consider, seeing that the numbers don’t stack up in any way for Rangers to run as a profitable ongoing concern?
Are administrators even allowed to continue to run a business at a loss in this fashion and therefor reduce money available to creditors (bearing in mind that their fees are taken first from a liquidation).
I agree it seems a strange strategy (I am being kind here assuming that their is a one other than just keeping going to the end of the season) that is reducing the creditors ‘pot’ with every turn. The pot must be getting even smaller that as the players wages were just deferred until the end of May so I assume that if this is not paid they will become creditors as well.
I am aware that the HMRC are not secured creditors and therefore cannot stop assets sales etc but there must be a mechanism for them to put a halt to this charade. It is obvious that this is not a going concern (£10m black hole) and there are no credible buyers (I think D&P’s definition of a bidder is a play on semantics and these may be no more than a note of interest).
Surely there must be a point when the court has to intervene as the joint Administrators are now even being publicly ridiculed by BBC business correspondents (aka Laurel and Hardy). They are becoming an embarrassment to their profession and ultimately the court which appointed them. I do not include their firm in this because to them they will be playing a blinder getting 12+ weeks worth of fees from a donkey that was dead in February. Probably in line for a bonus.
The ineptness or their performance to date may be a reflection of their strategy. Which has baffled everyone possibly because in true ‘Bladrick-cunning plan’ mode, their strategy was not having one. As they knew that liquidation was the only real outcome from day one they have been smoke and mirroring to hold until the end of the season then cut and run.
Alternatively it s all going to plan and CW will get to play his hand. If that is the case I would have though that HMRC/Strathclyde’s finest/SFO would have some work for several months/yaers.
From his statement, it looks as if Bill Miller has opened a big box marked “unpaid bills” and sh1t himself when he saw what was there. Looking at the numbers being bandied about here and elsewhere, it would take an Arab Sheik with about £200 million to get this sinking ship back on an even keel. There is one in manchester, but after the ‘Gers’ fans remodelling of the city centre there last time they visited, I don’t think there’s much godwill likely to come form that direction.
Morning all.
Ref Duffers and Flops bizarre behaviour and pronouncements, could it be that the fact they have never before dealt with a football club in Administration is beginning to tell?
Then again if as Paul says, they are earning 200K a week !!! then what will it take to stop them carrying on in this fashion.
What happens ref their fees if the club does get liquidated. Are they a priority or are they getting payed already on a weekly basis?
There was some good news, HMRC had agreed to the 11.2 million deal with the newco-oldco, so much for not doing any deals. Ticketus also agreed whch suggests they have CW over a barrel in terms of personal liability.
A CVA is not possible without Ticketus,as it frees up CWs shares, however any deal involving Ticketus puts the price way over the 20-25 million breakdown value. Assuming HMRC would accept 11 million to the ordinary creditors as per the BM bid, then add this to the transfer of Ticketus 26.7 million plus the debentures at 7 million, and you come to a creditors return of 45 million, more than double its current worth.
What is becoming abundantly clear is Rangers assets are not worth much and Rangers as a newco ( in any event) would be a loss making business for 3 years.
Ibrox and MP are only worth money to a football club, and the only football club who wants to buy them is not a financially viable business, if the SPL and SFA do not restructure the penalties then Rangers only chance of survival is a CVA.
Niall, the last comment I heard from HMRC was that they would consider any package when and if it was ever put to them. This was immediately after the annoncement of Bill Murray as the preferred bidder and D&Ps statement that HMRC had been “informed” of the bid.
At no stage have I heard any comments from HMRC that they have accepted these terms. If you could please enlighten as to the source of HMRCs “acceptance” I would greatly appreciate it.
Niall
God loves a trier!
In one of your earlier posts you mentioned you were now relying on blind faith. I think I agree.
Not sure where your information comes from regarding HMRC agreeing to the BM proposal? Hopefully not the newspapers or a D&P statement. As far as I am aware the HMRC have not been involved in any discussion regarding this matter and Alex Thomson attributes a spokesperson saying ‘they would look at any proposal put before them’. As Miller was only in ‘due dilligence’ and backed out pretty swiftly I do not think that anything was actually put to them.
In fact what I am hearing on this is the exact opposite about HMRC. They appear to have voted against D&P in the creditors vote(hence no mention of it by D&P) and the word is that liquidators had been alerted should the proposed newc/oldco look like getting off the ground.
You mentioned in an earlier post that the elephant in the room was Ticketus and I agreed with you. What makes you feel they are now not an ‘irrelevance/impediment’ in D&P speak.? If they were mad enough to hand over 27m on personal assurances from CW then they deserve to lose their money. However as this money was given in two trances one I believe as late as October last year then if they have any business advisers at all they would have ensured that at least this trance was secured fairly tightly.
If I was a bidder I would find your figures very encouraging. Unfortunately I think D&P have been painting a similar scenarios to prospective bidders and as Miller’s comments reveal the reality is some what different. At this stage even the uber-optimistic Clarke/Whitehouse have been quoted as saying that a CVA was now impossible a view shared by Brian Kennedy.
Of course I may be wrong and any of the three bidders (sic) waiting in the wings may swoop down and save the carnage that seems imminent. In my view any such ‘bidders’ are really only showing interest in the up-coming fire sale. Does a Div 3 club need an Ibrox size stadium or a MP training ground? who knows.
Just a thought has any one passed the former Highbury stadium recently if you have you would note how tastefully it has been converted into flats whilst retaining the old facade.
Good morning deekbhoy,
May I suggest in terms of property or retail development opportunities, Govan is not Highbury,Glasgow is not London and if there was some residual value to the land then the bids would have been in 3 months ago.. You are aware one can just bid for the assets of a company in administration, one does not have to bid for the company. Let me repeat there has been no bids for the assets of RFC todate, none.
On the Ticketus issue, they may be persuaded to rejoin the consortium if BK took over CWs security, its the only way CW is going to agree to a share sale, avoid a 3 year European ban and get out of administration with its domestic penalties.
I admit the chances of a stand alone CVA are slim but the alternatives brings so little to the creditors it may be the only option left. There is no point in anyone buying the assets to rent back to a loss making Rangers for 3 years.
D&P did not know the extent of the SPL and SFA penalties until the transfer embargo, now it is obvious to them and everyone else Rangers cannot afford the financial effects of any further penalties, but more are on their way. The game changer was not HMRC or CW or Ticketus, it was the financial consequences of sanctions.
Hi
Niall Walker, May 9, 2012 at 9:49 am:
“There was some good news, HMRC had agreed to the 11.2 million deal with the newco-oldco, so much for not doing any deals.”
Is there any statement from HMRC to support that? I’m sure Alex Thomson has stated he’s asked the HMRC lead about this in the last few days and the reply was that they’d never been consulted about the Miller deal, and I seem to recall that months ago they rejected a similar offer from Craig Whyte.
Hello Peter,
If I phone HMRC and enquire about your tax affairs I do not believe they would comment, Alex Thompson views through a glass darkly in my opinion.
To all doubters, it is inconceivable that D&P would go on public record with this statement or proceed with the sale to BM if this statement was false.
“HMRC and Ticketus are both creditors of the company and the creditors have voted in favour of the proposals which enable us to do this deal.”.
Dear Niall, Sorry to pile onto the bandwagon of those asking for other sources, but I do not believe that D&P are the most reliable source of information on this issue. You may be 100% correct but I feel that D&P are well out of their depth and are only excarbating the problem by continuing with a failed strategy.
I am sure you will certainly bathe in a sea of apologies (as we all would) if you are indeed proved correct in this instance.
Sorry, “excarbating” should read exacerbating.
Richboy,
I have no reason to doubt D&P, in my opinion they are coping admirably with one of the most complex administrations I have ever come across. One thing I am certain of will be the shock if and when Rangers goes under the auctioneers hammer, I estimate 10 million lock, stock and barrel. Once the admnistration fees, liquidation fees, and redundancies are deducted there will be little for the secured creditors, never mind the ordinary creditors.
Evil was once described as an absence of compassion, I feel some sympathy toward the 200 odd employees who are going to lose their jobs.
I want Rangers punished not annihilated.
I think as was noted on a previous blog by Paul, that D&P have been known on several occasions to be ‘economical’ with the truth when making statements. The only time they have been extremely careful about what they say and claim has been their official statements when reporting the statement of accounts. At all other times they have been merely operating a Public Relations persona in order to achieve their aims. This is apparently standard practice.
The statement quoted “HMRC and Ticketus are both creditors of the company and the creditors have voted in favour of the proposals which enable us to do this deal.” does not actually claim that HMRC agreed, merely that they are a creditor. Some or most creditors may have agreed but it does not follow that HMRC did also. This is the semantics of language of the clever PR puppeteers.
Duff and Phelps have made umpteen statements which have turned out to be untrue. You can’t believe a word they say.
Totally unreliable.
Yeah, the ‘international’ bid is probably local Chinese & Indian restaurants wanting to move into Ibrox
“Presumably their information at this stage extends no further than the “internet data room” from which Mr Miller obtained his preliminary financial data”
I think Bill Miller read your blog Paul LOL 🙂
Niall,
The only “vote” that has taken place in this process was the one on the administrators’ proposals for continuing their administration. These proposals were attached to the early April report to creditors which first brought the potential £134m debt figure out into the open.
The closing date for this vote was April 20th, the day before Miller first brought his “proposals” into the open. Unless time travel is among the powers of this nation’s tax authorities (in which case, can they take a peek forward and tell us ALL of the FTT result?), they could not possibly have voted for any specific plan by Miller or any “£11.2m” deal.
The statement you quote is not false, although I believe Whitehouse couched it in a context designed to mislead. You have simply interpreted it incorrectly.
Your views on the whole Ibrox insolvency issue have been a refreshing antidote to the desire to see Rangers die which I believe has clouded a small minority of the judgements from readers of this and other excellent sites. However, if your views are based on the muddled thinking displayed on this issue, their credibilty, it pains me to say, must be doubted.
Morning Mark,
I do not believe I have interpreted it out of context, because this statement was attached to it.
Rangers’ administrator Paul Clark
“Firstly, creditors have already given us sanction to complete the proposal; that’s under the terms of the administration proposals which have been agreed,” he said.
“Aside from that, we have already been in consultation with the largest creditor, HMRC and they are fully aware of and are supportive of the bid.
There would be no point in D&Ps announcing a prefered bidder and talking about an imminent takeover if HMRC or Ticketus had not given some form of tacit approval.
I posted earlier, HMRC agreed to a similar deal with Leeds Utd.
Niall
No! No! No!
You keep bring up that HMRC agreed a CVA in the Leeds United case. This is not true and I am sure that several posters have already pointed that out to you in previous posts.
Without boring everyone if you look at the case HMRC opposed the CVA throughout and at no point agreed to a CVA. They were outvoted by other creditors some linked I believe to Ken Bates.
“I posted earlier, HMRC agreed to a similar deal with Leeds Utd.” Except they didn’t. I came somewhat late to your initial post asserting this, and I have posted at length correcting it. Briefly HMRC went to court to stop a 75% approved HMRC, and HMRC added to their case their objection to the whole policy of in England football creditors being paid at 100%. The ensuing delay in the court case and the Football League’s deadlines forced the administrators to sell the assets of Leeds Utd and the newco to apply to the Football league for the transfer of the golden share on an extraordinary circumstances basis i.e. no 75% approved CVA was done. A 15 point penalty was imposed and the day before the court dater, HMRC withdrew. By this point their objection to a CVA was irrelevant, and at no point did they approve one.
Niall,
Here is how your so called agreed deal was being reported locally.
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.
That is HMRC challenged the CVA, and only ditched the legal challenge after it had already been scrapped by KPMG. This is not supporting the CVA, it is not even withdrawing their oppostion to the CVA. It is halting a legal process because it was no longer necessary.
Niall you need a complete Siberian Salt mine to take any statement made by Whitehouse and Clarke at face value unless it is in court under oath AND corroborated by a 3rd party.
HMRC did not break client confidentiality by telling Alex Thomson that they would consider any BM proposal when it was put to them. Note WHEN is future tense not past. D&P or HMRC were economical with the truth with only one of them having any real benefit from being so in “bigging up” the possibility of a purchase and CVA.
It’s very nearly 3 weeks since the deadline for the virtual creditors meeting and as Paul has pointed out D&P are sailing very close to the wind in not fulfilling the requirements of notifying interested parties as soon as reasonably possible. One can only believe the delay is, its not favourable to D&P for the results to be known because based on the creditors list and amounts included in this http://www.rangers.co.uk/staticFiles/fe/a8/0,,5~174334,00.pdf I could knock up a spreadsheet in 10 minutes that included 2 extra columns per resolution. One would be for entry for how each Creditor voted and the other would be a formulae to work out the “weight” of that vote either for or against. Entry of the votes should take 2 hours max by any data input clerk. At fees of £30k a day surely they can complete that task in 3 weeks.
Niall
“HMRC and Ticketus are both creditors of the company and the creditors have voted in favour of the proposals which enable us to do this deal.”.
Perhaps you can give some clarity and context to the above statement. As I recall the statement delivered by D&P to the ‘public’ announcing Miller’s PB status did not contain this. In fact comment was made at the time at of the omission of any mention of HMRC or Ticketus in that original statement.
I also believe one of the administrators (Clarke) walked out of that press conference or a subsequent interview when pressed to comment on HMRC’ s response to the appointment of Miller and his proposals.
Was this statement made during a subsequent interview? Was HMRC’s response of waiting to see a proposal before responding made in the wake of this statement? I also cannot recall any comment by Ticketus on anything for several weeks.
I am glad you have great faith in the ramblings of D&P but I take most if what they say with a pinch of salt. At the original Miller announcement they said there would be no liquidation but three hours later this was changed to cannot guarantee that there will not be liquidation.
Deekbhoy,
D&P have nothing to gain by announcing an imminent solution to Rangers if they had consulted HMRC and they had said ” no deal “.
I have said it from the get go, Rangers would have been liquidated in week 3 if it was a FACT, HMRC would never do any deal of any kind.
Wonder if Bill received some odd pieces of mail recently from the West of Scotland?
Deekbhoy,
I dont believe I stated HMRC agreed to a CVA at Leeds Utd, i believe I stated they agreed to a newco-oldco arrangement much similar to BMs bid.
What this demonstrates is HMRC make deals, and they are pragmatic and not dogmatic, their flexibility gives one hope unlike your unfounded absolutism.
“i believe I stated they agreed to a newco-oldco arrangement much similar to BMs bid.” No they didn’t do that either. They eventually withdrew opposition in court long after the event, by which point they had become irrelevant, which is not agreeing in any normal sense of the word. HMRC have never done any deals in football in England and they will not do so so long as the 100% football creditors getting paid first rule continues to apply.
I agree, however no such preferred status exists in Scotland, so thats one obstacle less.
As regards revenue streams it’s possible he has seen season ticket renewal figures as well as what Paul mentions above.
The stadium cannot be included in the £11m.
Bill Miller has seen the non-existent revenue stream from season ticket renewals.
I’m sure the stadium is not included in the £11m or is in some way ring fenced.
Sorry if this is posted twice.
The 11.2 million bid was for Rangers assets, this includes Ibrox, MP, Albion and players..
“So Bye Bye wee American guy,
made a dash wi all yer cash coz the big hoose was dry,
us good ol’ bhoys laughed so much that we cried,
singin’ this’ll be the day The Shame died” . . . you know the tune 🙂
Niall
I would not wish to extinguish your hope and encourage you to be optimistic you may be rewarded.
One man’s unfounded absolutism is another man’s realism and I would suggest that your hope built on the so-called flexibility and pragmatism shown by the HMRC in the LU case is unfortunately misplaced.
As has been pointed out HMRC at no point agreed to anything regarding LU. Any pragmatism shown was only after it was clear that there was little gain to be had by pursuing their view further and accepted the fait accompli.
As mentioned in my previous post my understanding that they were not prepared to allow this to happen again and had alerted liquidators to act on their behalf in the as it turns out unlikely event that Miller’s scheme went ahead.
As to selling the assets separately, how much would the ‘history’ of Rangers be worth? All the trophies, the medals, the pennants, the shirts, the memorabilia etc etc. Rangers fans would pay a substantial sum either as a job lot via a consortium or as individuals wanting to possess their own wee trophy. Of course Rangers fans could pledge to boycott any such sale, but a nearly an equivalent value could be achieved by a sale to Celtic fans, even if only for the purpose of holding a great commemorative bonfire at the ice cream and jelly party.
Of course if D&P are acting “in the interests of the club” they would never contemplate such a thing.
DeekBhoy: re Ticketus “as this money was given in two trances” Aha! That’s how Whyte did it!
Joking aside (though tbh it’s hard to do so) Rangers “business model” of spend what we like and hope Champignons’ League money bails us out every now and again is clearly broken and has been for 2 decades. Pretty much since Murray D., came on board. I think that is what scared Wild Bill off – I have posted elsehwere I imagine the books were like an accountancy version of a picture of Dorian Gray. When exactly was the last time Rangers published FULL accounts? Even now, after years of cash injections from ENIC, from King, from Murray (or his companies) from JJB and Ticketus which were meant to put them on an even keel, they STILL have a business that owes £70m-130m and a model that consistently loses them £10m a year.
No-one in their right mind would buy them.
Which brings us to the Barren Knights (that still makes me giggle!) – isn’t Murray, P. as a director when Rangers went into adminstration banned from buying a football club? Niall – nuff respect for fighting your corner – but to say you “don’t believe TBK-BK have a shortage of funds, they are businessman” isn’t logical. Whyte was a businessman! I appreciate you go on to say they would not want to waste their investment on a loss making business , but that is all that’s on offer! I appreciate that the BKs’ veins may run with (light) blue blood, but whoever takes on the club (if indeed someone does) they will a) have to stump up a small fortune to get Newco started and b) endure brickbats or more likely bricks and bats whilst the fanbase gets used to the new reality. They will really need to love Rangers to put themselves through that
Final point: well done to everyone at Duff & Dufferer for working tirelessly over the 3 day-weekend only to see Miller walk away – do D&D charge double time for bank hols?
jockybhoy
Thanks for spotting typo should have read tranches. However on reflection if Ticketus have given Craigieboy £27m with no real security then perhaps they were in a trance! Twice.
Hi guys,
In all the commaents relating to Rangers assets why are questions not being asked of the previous directors and auditors regarding the revaluation carried out of Ibrox over the years to a valuation of £120million which hid the insolvent position of Rangers balance sheet 10 years ago.Also how can Paul Murray be deemed a fit person when he was a director of the old board EBT’s trading while insolvent etc
boydy
The directors would probably argue that they instructed a professional to carry out valuations and went on their report. Lots of companies revalue assets and those looking at the companies are usually asking why. Answer to make balance sheet better. Really not an issue if you have the cash flow but RFC(ia) obviously did not.
You view of Murray is correct and that is why he has faded from the limelight recently with Kennedy now appearing to be the front man.
for D and P to say there is still time for new bidders to own rangers before the seasons end must be the most absurd and irresponsible statement uttered in this whole saga. when is the administrators competency going to be challenged? their reputational loss grows by the day and cannot be going unnoticed by the US owners. one can only surmise that unseen hands are driving the administrators to desperate measures in order to secure an outcome. any outcome…
Can we confirm that given Craigy bought his shareholding for a nominal £1 that he would be subject to Capital Gains Tax should he sell the shares for a healthy profit. Of course being liable to tax and actually paying it are two different things especially for Craigy and RFC(IA)
Excellent as always Paul.
A small, perhaps unimportant point:
“I am most disappointed that I won’t have the opportunity to walk into Ibrox Stadium on the day of an Old Firm match as my friends tell me the hair on my arm will stand up and I will never witness such passion and spirit at any sporting event.”
Which “friends” would that be?
Could one of them be Alistair Johnson? Ellis?
Interesting comment from a man who admitted he knew nothing about “soccerball” let alone Scottish Football.
Dear Mr groom,
Oh ye of little faith, we play to the whistle, we are not even in injury time and two super-subs have been introduced to the game, contrary to popular opinion D&P ( the refs) are neither blind nor affiliated to the Illuminati. Its all nail biting stuff and rumours have it Craig Whyte has bought the book and film rights, using advanced sales receipts of course.
Naill
Who’s been listening to the STV again!
Lets see the colour of there money once they have seen the books.
Smoke and mirrors my friend
deekbhoy,
Et tu Brute, plagiarism is not my bag, my philosophical musings are based on logical deduction and 30 odd years experience dealing with insolvency and vultures.
Niall,
You’ve taken a lot of stick here. I believe though that uou are missing the principal point and that is sporting integrity, because without this integrity the game as we know it is finished. You can debate assets, CW, Ticketus, Newco/Oldco, TBK, BK et al until you are green in the face…..because what cannot be allowed is the bending of the rules by SFA/SPL and supported by an inept MSM to suit your dream.
I shall repeat….the creditors are the VICTIMS not RFC (ia) and the sale of players should have been first priority, followed by liquidation….for the sake of the the creditors.
Bhoywonder,
The Corinithian spirit is an ideal worth promoting but like most absolutes it contains unrealistic expectations, sporting integrity like morality is relative.
How many players admit they dived, admit they handled the ball intentionaly or admit the ball was over the line ?
How many Chairman or boards operated a tax evasion scheme called the ” biscuit tin ” ?
Rangers like many companies operated a declared but dubious tax avoidance scheme, after investigation it was considered to be tax evasion. It was not a sporting integrity decision but a business decision, and a poor one. As for Craig Whytes governance, he did nothing illegal or financially improper, many businesses use their contributions as working capital in a cash flow crisis, again it was a business decision.
Football is both a business and a sport, and on this occasion business standards impinge on sportng standards.
Niall
I would never accuse you of plagiarism.
I meant that the hubris of your reply to Mr Groom implied you had been taken in by watching the flag waving reports on STV.
Sorry, I appreciate the ball has moved on but I need to pick up on something…
Niall – based on your previous well argued posts the comment in reference to the biscuit tin is unworthy of you. The “biscuit tin mentatility” was an accusation levelled at Celtic by the discredited Scottish football media. they were putting pressure on Celtic to try and match the unsustainable arms race that Rangers undertook. The facts now appear that rather than deride a club for trying to spend within its means Celtic should have been praised. If Rangers had followed the sane course of action (and that is not a typo) they wouldn’t be in the situation they are.
If you (or indeed any of the denizens of the “Follow Follow” website where I believe this “balancing” accusation was cooked up) want to make the unwarranted leap that Celtic or indeed any club where the distant memory of football crowds might not tally with “official” reports, were guilty of under-reporting revenues and tax fraud, go ahead. The fact is there is one club accused of systematically avoiding their tax responsibilities in Scotland – and that is Rangers. If Rangers and their supporters had been dealing with their own problems rather than throwing mud around again, perhaps they wouldn’t be in the situation they are.
Jockybhoy,
I made reference to the old universal practice of under-declaring crowds ( tax evasion) as an example of the myth surrounding sporting integrity in football. I apoogise if my use of the term ” biscuit tin ” was in the wrong context and I was unaware of its origins.
I do not condone Rangers or any companies attempts to avoid tax through EBTs.
Thanks for the clarification – as I say, I personally am very pleased Celtic operated a biscuit-tin in respect to transfer fees (though I have taken a pounding on Celtic websites for such a pro-board stance) but I still take issue with this suggestion about the “universal practice of under-declaring crowds” – where’s that coming from? Back in the days of paying at turnstiles, maybe the gateman let a few in, maybe some older boys got in a free “child” places, but systematic underreporting for financial gain? Memories play funny tricks, especially in the old days of packed terraces but of course its harder now, with all seated stadia, especially when teams use external agencies to sell tickets – or are they in on the fiddle too?
Personally I have a season ticket for Celtic, I have paid for a ticket for every home league game, but living in London make around 8 games a season. My empty seat is bought and paid for.
And even if it was happening locally, let alone that it was widespread, I really don’t see how some unscrupulous owners who are alledgedly siphoning money off for their own gain impacts on footballing integrity? Unless they are bunging the players the money they save on tax under the radar in some sort of off-shore trust/secret contract (wait a minute!!!)…
OK – everyone else has moved on. I think we should do. I’ll catch up with you in a more recent thread. Tchau.