Quick Thoughts on Rangers CVA Proposal – Have We Heard This Before? Rangers Being Sold for £1!

Mr Green and his consortium are brilliant businessmen.

Their CVA plan consists of them lending Rangers Football Club PLC £8.5 million repayable with interest by 2020. The purchase price they are paying is £1 for sale of Rangers FC Group Ltd’s shares.

In return for this loan, which will of course be repaid, unless the rescued Rangers go into administration again, they will get 85% ownership of all of Rangers assets, including Ibrox, Murray Park, all the players and the goodwill and intellectual property.

This result is better for creditors than a sale to a newco, because if that has to happen Mr Green will pay a price of £5.5 million to buy all the assets of the club, including the money due to Rangers for player sales.

In terms of the deal, if Rangers are excluded from the Scottish Cup, or “relegated” to the SFL, Mr Green can then go to the newco option. He is only committed to lending the sum of £8.5 million if Rangers stay in the SPL.

In the event of liquidation there would be nothing for creditors. The only things of value, Murray Park and Ibrox, have been valued in the proposal at £4.59 million. These same assets are in the previous accounts valued at over £100 million.

According to the proposal the administrators think they will get something back from their two cases in the High Court in London involving Collyer Bristow, but that won’t be known for some time, and indeed for years if appealed.

They have demanded £234,000 back from Mr Betts who was paid this from money held by Collyer Bristow. D&P say it was given away by Rangers, and should be repaid.

They also want back £250,000 from Regenesis Holdings, which may well be the “Banstead Athletic” money involving, allegedly, the Earley brothers.

The administrators “understand” that Group (ie Mr Whyte) have confirmed that they are not owed any money under the Floating Charge.

Duff and Phelps are estimating their fees as administrators at £3 million, to which will be added their fees as nominees and also their fees as supervisors of the CVA.

If this goes through, Mr Green has acquired Rangers, lock, stock and barrel and debt free for £1. In fact, as he is being paid interest on the funds leant, he will have profited merely from the acquisition!

The creditors will get a few pennies in the pound, if that.

Mr Whyte, on the face of it, will have got nothing, and he or his companies are being sued by the administrators and about to be sued by Ticketus.

There is a lot more to be said, but Mr Green wins the award for complete bare-faced cheek if he can make this work.

Quite how creditors, like HMRC and Ticketus view this is rather different.

And maybe I missed it, but I did not see any mention of the outcome of the creditors’ vote of 20th April?

More to come later.

 

Posted by Paul McConville

 

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77 Comments

Filed under Administration, Charles Green, Rangers

77 responses to “Quick Thoughts on Rangers CVA Proposal – Have We Heard This Before? Rangers Being Sold for £1!

  1. The loan is 8,3M actually. The other 200K is the exclusivity payment.

  2. What’s in this for Craig Whyte? Has he just given up – or will he try to enforce his claims to a floating charge through the courts?

  3. Charlie Malloy

    We know that sports media don’t have a clue and stay away from such in-depth analysis, but why aren’t the financial depts of the press all over this dodgy deal. Sterling work again Paul and keep up the fight

  4. alan280170

    The 2 duffers fees are now 5.5m and rising.

  5. Hugh Jarse

    This CVA proposal is an incredible piece of work ………. and I don’t mean this in a good way.

    Too many TBCs
    Too many conditions
    Consideration is a loan!
    The various scenarios in the summary look brazenly massaged to support the CVA
    The “sale” to Green of the assets for £5.5m in a newco arrangement – WTF!
    Liquidation values absurd.

    I’m guessing that Hector says no!

  6. The BBC are reporting that administrators Duff & Phelps have accured operating charges and legal fees of over £5.5m and hold secure creditor status.

    http://www.bbc.co.uk/sport/0/football/18236955

    It truly makes you want to weep. They are saying Take the CVA or you get less, or even nothing. They are saying to the SPL et al, if you kick us out, the creditors get less, which is morally reprehensible. They want the best of all possible worlds without having to pay for it. They seem to want Ibrox, Murray Park and importantly the players – not to mention the fact that they want to overturn the 1 year transfer ban forgetting that if they are allowed to keep the players, then they don’t need to worry about the transfer ban. I am sorry, they are treating this as a system to be played. The CVA should be nominated for a British Comedy Award; but, I still go by my thought that if this is how they see things then Rangers deserves to be kicked out.

    While I am at it, I still cannot get my head round the idea that, as you say:

    “The only things of value, Murray Park and Ibrox, have been valued in the proposal at £4.59 million. These same assets are in the previous accounts valued at over £100 million.”

    They talk of football as being more than a game, that the fans are important, and so on. They talk of sport being special, something different from business; this proves that that is just not true. Charles Green is promising Rangers fans SPL titles, no less. That is an outrage.

  7. Greg72

    A great precis, as usual, Paul! I’ll be reading the CVA proposals in full at my leisure!

    As I’ve been ‘banging on’ for some time now, I’ve not seen any announcement of the outcome of the April ‘correspondence’ Creditors’ Meeting either, and this I find somwhat strange. That Meeting was to decide whether or not to accept the Administrators’ proposals and, if accepted, whether to appoint a Creditors’ Committee. One has to assume that the proposals WERE accepted, as otherwise I don’t see how a further proposal for a CVA could be made. I may have missed it, but I haven’t noticed any reference to the outcome of the April meeting in the CVA proposals from my quick scan of these.

    • Hugh Jarse

      One can only hope that the liquidators appointed by the creditors after this “proposal” is rejected do a better job than D&P and are able to realise a more amenable (to the creditors) percentage of the assets book value on break-up.

  8. Hugh Jarse

    Slightly off topic but I see that the Court of Session has upheld the decision of the SFA Tribunal. The embargo stands.

  9. Paul can you pls tell me if HMRC and other “unsecured creditors” do not accept the CVA then surely to protect themselves they can at the very least secure letters of inhibition on the ground training ground etc..and delay / deffer to high court decision on new co etc. This would surely put any “newco” option on the side. If the CVA is rejected, which appears likely, then surely the value of less than £5m is unlawful given that they were worth some £100m. I accept that the value is reflecting market value for land redevelopment, without permissions.

    • Greg72

      I think I’m right in saying that while a company is in administration, NO legal action msy be taken against it without the consent of the Court (of Session). Accordingly, obtaining an inhibition ‘aint on’!.

  10. Brian Jeffrey

    Not according to the BBC…
    http://www.bbc.co.uk/news/uk-scotland-glasgow-west-18248766
    Rangers have apparently won and Lord Glennie has said the ban should be lifted because the SFA acted beyond its powers

    • John Bayne

      The SFA will now have to reconsider which punishment to impose with a fine,suspension and expulsion being the options available.Both suspension and expulsion being worse than the transfer embargo.Looks like Rangers are playing chicken with the SFA.

    • Daniel Toye

      From Paul’s earlier post

      “A… club… if found to have infringed the articles shall be liable to censure or to a fine or to a suspension or to an expulsion from the Challenge Cup [Scottish Cup] Competition, to any combination of these penalties or such other penalty, condition or sanction as the Judicial Panel considers appropriate, including such other sanctions as are contained within the Judicial Panel Protocol, in order to deal justly with the case in question.”

      Sounds like it’s pretty black and white. The Judicial Panel have complete discretion when it comes to penalties; these include but are not limited to those in the Protocol. I’m interested to hear the details of why the appeal was allowed. Will the Lord Glennie’s opinion be published in full?

      • Robert

        Yes, it’s pretty black and white. However, the Judicial Panel do not have complete discretion when it comes to penalties.

        The SFA’s Articles of Association (see Sections 94.1 and 95) only give the Judicial Panel the power to apply sanctions as provided for in the Judicial Panel Protocol.

        In the Judicial Panel Protocol against General Disciplinary Rule 66 (see page 102) , the maximum sanction, for an SPL club, is defined as £100,000 and termination of membership (right hand column).

  11. Brian Jeffrey

    The SFA will now need to expel Rangers or they will themselves face sanctions from FIFA and UEFA for breaches of FIFA statutes (statutes (62-66) which explicitly and unequivicolly prohibit clubs from resorting to “Ordinary Courts Of Law” to resolve fottballing disputes and which place a positive obligation on the SFA to enforce those statutes with all memberr clubs.

    • KD

      How long before UEFA and FIFA lawyers turn up at Hampden?

    • Robert

      With regards handling disputes the aim of the FIFA statutes is to provide provision for independent arbitration rather than via courts The FIFA Statutes in 64.3 state:

      The Associations shall insert a clause in their statutes or regulations, stipulating that it is prohibited to take disputes in the Association or disputes affecting Leagues, members of Leagues, clubs, members of clubs, Players, Officials and other Association to ordinary courts of law, unless the FIFA regulations or binding legal provisions specifically provide for or stipulate recourse to ordinary courts of law. Instead of recourse to ordinary courts of law, provision shall be made for arbitration. Such disputes shall be taken to an independent and duly constituted arbitration tribunal recognised under the rules of the Association or Confederation or to CAS.

  12. My first impression is that this proposal is a total stitch-up.How can Duff and Phelps justify agreeing to sell the assets of RFC(ia) for £5.5m if the CVA is not approved?
    The proposal as it stands says get next to nothing in the £(TBC) via the CVA or nothing via liquidation,

  13. @ Brian, they have stated that they see this as a local issue and are not willing to intervene. To be perfectly truthful I an absolutely sick to the stomach that this lot are going to get away with this. This is an huge embarrassment to Scotland and the Scots that are supporting all these actions. I just cannot believe that no one seems capable or willing to take decisive action against this so called club and individuals. Sick to the stomach!!!!!!!!!!!!!!!

    • KD

      I’m inclined to agree. To borrow from one Mr W Churchill;
      ” This may not be the end, but it is the beginning of the end of Scottish Football”.

  14. fitba_daft

    scottish football is ruined unless this club is dealt with. It is making a complete mockery of the game.

  15. HighFibre

    I doubt if UEFA or FIFA will show much interest in this. The judicial review did not overturn the decision of the SFA judicial panel, nor was it asked to. It merely pointed out that their procedures did not allow for the sanction of a transfer ban. This is why it was sent back to the appellate rather than the judicial panel.

    It is the responsibility of the SFA or any other football association to draw up and follow their rules and regulations in compliance with the laws of the country in which they operate. This is a surely a legal and not a footballing matter.

    Since the decision still stands, it is now up to the appellate panel to come up with an appropriate sanction – most likely expulsion from the cup for one year. If this sanction is chosen, then I suspect the CVA is toast, as one of the conditions of the Green loan offer is broken:
    4.22.6 all consents or other requirements of the SPL and SFA having been obtained or complied with so that Rangers Football Club can continue to participate in such domestic leagues and competitions as it currently participates in.

    • Hugh Jarse

      “I doubt if UEFA or FIFA will show much interest in this.”

      They are already interested and will get medieval on our asses if the SFA don’t get it sorted.

      Transfer embargo just became a best case scenario (for Rangers) of a years suspension if not expulsion from the SFA. Hubris anyone!

      At least it would allow the liquidators time to focus on the needs of the real victims – THE CREDITORS.

      • It has already been reported in the Herald that FIFA have warned that action must be taken after Rangers’ use of the law courts to challenge the embargo.

        If it is right that FIFA (and not UEFA) are looking over the SFA’s shoulder, then I would assume that things are going to get much more interesting for all parties.

        http://www.heraldscotland.com/news/home-news/sfa-fury-as-judge-throws-out-rangers-transfer-ban.17734308

        I note with interest the comments of Andy Kerr, president of the Rangers Supporters’ Assembly, who suggests that a financial penalty would be best (I will not comment on that … well I will … wasn’t it rangers fans who were saying that financial penalties are unfair, and, in any case stupid given Rangers’ situation amongst other things) But, he seems to fully understand the implications of the involvement of FIFA.

    • Robert

      The SFA’s prime objective in putting the Judicial Panel Protocol in place was to provide a disciplinary procedure that provided transparency as to what punishment could be imposed for breaking the rules. This was driven by Celtic’s complaints, in previous seasons, about the lack of transparency of the SFA’s disciplinary procedures.

      As a consequence, the protocol went to great lengths to detail the punishment for breaching each rule.

      For Rule 66, the maximum sanction, for an SPL club, is defined in the Judicial Panel Protocol as £100,000 and termination of membership. It does not provide the Judicial Panel with the power to prohibit registration of players.

      The SFA’s Disciplinary Proceedings Outcome prohibited Rangers from registering new players thus came as a surprise and the fact that Rangers appeal to the SFA was unsuccessful was a further surprise. It was as if the SFA had made a mistake, by not working to the Judicial Panel Protocol, and ended in a position at the appeal where they just could not back down because of fear of the potential backlash.

  16. George

    So – as we thought all along – Ticketus are getting bumped. right ? If this is true, then it was always going to be so.

  17. Michael

    So on page 43 of the “CVA Proposal” Ibrox Stadium, Murray Park and other Freehold Property is worth £109,613,870, but on liquidation it is all worth £4,590,214

    Where has the £105,023,656 gone?

    Shocking cheek.

    What are they up to?

    • duggie73

      Market value of the real estate’s lower than the book value partly becos of dodgy book valuation, mostly becos there’s a toxic football club right in the way of bids happening.

      Were Green inc to gain possession of the whole kaboodle, you’d expect the assets to be stripped for considerably more than D&P were offered during the administration.

      It’s dodgy as eff, but it’s not really explicitly or exclusively a D&P piece of work.

      On a completely unrelated note, it has occured that one way of attempting
      to avoid the legal responsibility for a disreputable action is to split the action into smaller parts so that no single actor bears legal responsiblity.

      This should not be taken as an indication that Lloyds, SDM, the independent board, Craig Whyte, MCR, D&P and Green are in any way “all at it” wrt avoiding RFC’s debt while intending to set up a newclub
      unless such should at some point in the future turn out to be true, in which case, fill yer boots.

    • Marching on Together

      Some clarity on the values of Ibrox Stadium and Murray Park. The value in the balance sheet of £100million plus, will be the book value, which I understand to be what Rangers has actually spent on the properties over the years, less the annual depreciation charge on the improvements etc made. It bears little relation to what the properties are actually worth. In addition, the valuation used would surely have been a forced sale value, and not an open market value i.e. the value that could be achieved by a forced seller in a limited time period.

      A few years ago Murray Park on the open market would have been worth decent sums for re-development as housing, and it may be so again in a few years, but not at the moment. Ibrox has little in the way of alternative use available for any prospective purchaser, if there indeed was one, and any new use would be subject to planning being obtained. In addition I believe Ibrox is partly listed, so getting permission to bulldoze it and construct housing/retail etc would be problematic as well. In any event the costs of demolishing the building to provide a cleared site would probably more than exceed the sale value of the land for development, bearing in mind its location. There is only one alternative purchaser for Ibrox and that is any purchaser of Rangers football club, so the value of it is…. however little they are willing to pay.

      Caveat – I am not a surveyor, so am willing to be corrected on the detail.

      • Hugh Jarse

        Partially true, but there have been various revaluations on these assets as well, so it isn’t just cost. If the proper accounting standards have been applied (FRS15 for valuation and FRS11 on impairment) then the book value should represent a reasonable approximation of the fair value of the asset – where the business is a going concern – ie £110 million ish.

        To suggest that the break up value of those same assets requires a 95% write down lacks credibility. The £4.5 million figure is so laughable I can’t believe they published it and I would be shocked if HMRC swallowed it.

        Ditto the suggestion that on liquidation that they can’t realise any transfer fees on player contracts! Given that the biggest 7 players are expected to raise £8million immediately (Charlie’s loan repaid?) and the rest of the squad should be worth something. On player registrations alone there is value that exceeds what the creditors are currently being offered.

      • sarissa

        There are basically four ways to value property:
        1. What was paid for it
        2.What it would fetch on the open market
        3.A multiplier of the revenue derived from it in future years
        4.The cost of replacing it

        I expect the valuation is on the same basis as Tynecastle is in Heart’s accounts, I.e. on a Discounted Replacement Cost basis – basically the cost of providing a 50,000 capacity stadium to give the equivalent of what ibrox is providing now. It is nothing to do with the development value or historical costs of building and extending the stadium over the years.

  18. KG

    It is wrong for Duff & Phelps to claim that the property assets of Rangers are only worth £4.5m. The value of the assets have not been market tested.

    There would of course be a risk for any investor who does not own the football club buying the property assets in that Rangers may cease to exist. But on the basis Rangers do continue they would want to continue to play football at Ibrox and use the training facilities of Murray Park it may prove a very tempting long term investment. There would also be the opportunity to use Ibrox for other activities and have longer term development opportunities bolted onto the stadium.

    In saying this I appreciate that investment is needed in the Ibrox property.

  19. Albert

    The property assets will most likely form part of a sale and leaseback arrangement whereby the club agree to pay a rental of, say, £2m per annum which would attract a potential investment sale of £20,000,000 + for the new owners. Double the rent and you double the price! Not bad for next to nowt.

  20. Niall Walker

    Good morning KG et al,

    The market value of the assets has been rigourously tested for over 3 months, the administrator has been requesting bids for these assets since they took office. Its fairly obvious the assets are only worth more than 4.5 million to a commercially viable Rangers, and Rangers is not yet a commercially viable business.
    As I stated in my earlier posts, a debt free Rangers does not make Rangers a commercially viable business, it will require major surgery and the restructuing costs reduce the value of the assets. It is the main reason D&P appealed against the transfer embargo, it prevents the necessary reconstruction. Bill Miller estimated these costs to be in the region of 30 million, even half this amount is way beyond the pale for any investor.
    The plain reality is, Rangers and its assets in their current condition are not worth more than anyone is willing to offer, its a loss making business facing further sanctions that will inevitably affect average attendances, this drop in income makes the risk of potential losses even higher.

    I see no point or benefit to anyone in Rangers exiting adminisration (debt free) and within a year be right back in administration with more debt.

    • John Bayne

      Niall
      How do you anticipate Ticketus responding to the CVA?

    • Marzepans

      In their valuation of the freehold properties the administrators have assumed that Ibrox will sit empty for two years until it is sold and have deducted projected costs for that two year period from the value. If on the other hand, Ibrox were to be sold almost immediately, say to a newly formed football team or to an investment vehicle looking to lease the stadium back to a newly formed football team, those costs would simply not be incurred. If I were HMRC or Ticketus I’d be demanding to see the underlying assumptions and amounts used in the ridiculously low valuation D&P have put forward, especially since D&P spent over £60k obtaining detailed valuations in the first place..

  21. Niall Walker

    Good morning Hugh,

    The players have no breakdown value in liquidation, they only have a value in a going concern, and the going concern requires major restructuring to make it comercially viable. Any monies received for offloading these unaffordable assets will be used to make the company viable.
    No owner seriously believes his main source of income ( ticket sales) will not be affected by putting out a sub standard team facing further sanctions.

    I have said from the outset, all of the assets (inc Ibrox and MP) are only worth somethig to a commercially viable Rangers, they have no residual breakdown value.

    • Hugh Jarse

      Nonsense. The players can and should be sold to other football clubs to realise the best vale for the creditors. To suggest they’re worth nothing to anyone other than a newco Rangers is exactly the sort of deceit that we hear time and time again.

      Rangers (IA) hold the registration for players who could be sold for (a widely reported) £8 million for seven key players and some additional sum for the other 30+ players. Selling all saleable players would generate more for the creditors than the CVA proposes in its entirety.

      • Hugh Jarse

        Vale = value.

      • Niall Walker

        Good morning Hugh,

        An administrator can not liquidiize players unless it is to fund the administration, the creditors would see no money.

        D&P have indicated they are cautiously optmistic the CVA will be accepted and I agree, the alternative is the creditors will get nothing.

      • Hugh Jarse

        Niall, during the administration the administrator has failed to pay HMRC a further £4m or so, has racked up fees themselves and has, somehow, to meet ongoing costs.

        In liquidation the liquidator – almost certainly not Duff and Phelps – is able (obliged) to sell any asset, including player registrations, for the best price in order to maximise the dividend to creditors.

      • Hugh Jarse

        “D&P have indicated they are cautiously optmistic the CVA will be accepted and I agree, the alternative is the creditors will get nothing.”

        Based on the amounts in the CVA proposal (accounting for some sleit of hand in the presentation) the amount available for unsecured creditors appears to be MINUS £2 million. Nothing IS actually better than that!

  22. gerrybhoy

    If last audited accounts valued Murray Park and Ibrox in excess of £100million and in the Green CVA proposal they are only going to pay £4.59million for these assets – surely this does not represent Open Market Value (probably around £20million) and the Tax Authorities will be all over deal even if it is just on the Stamp Duty Element (4% of transaction value)

    • Niall Walker

      Good afternoon gerrybhoy,

      The open market value may inded be 20 million, and once you add the secured creditors to the CVA offer, it comes out around 20 million.
      In effect you are confirming the CVA offer is the Open Market valution.

  23. Niall Walker

    The book value of a purpose built asset is not the market value of the asset unless the company is fit for purpose, Rangers are not fit for purpose and the asset value reflects this.

    It must be rememberd that making Rangers fit for purpose is not a simple task, if it was then SDM would have simply restructured it 3 or 4 years ago. Rangers require onfield success to fill the terraces and pay the bills, the attendances may drop but the overheads will not.

    Its a fine balance, one that has been achieved by Celtic but few others.

  24. CVA

    I would be amazed if HMRC agree to this proposal. Less than 10p in the pound and they dont really like football clubs

  25. scottish football is ruined unless this club is dealt with. It is making a complete mockery of the game.

  26. Jim Harkins

    I’m surprised that no-one, so far, has mentioned involving MPs.
    The taxpayer is about to be defrauded of due revenues and the Minister responsible has said nothing. To be fair, Alexander did state his opinion a few months ago but had obviously forgotten the upcoming (recent) local elections; now that there isn’t an LibDem constituency in Scotland to protect he may be open to influence. It is scandalous that a sale of assets can go ahead on the basis of the buyer’s valuation.

    • Niall Walker

      Good afternoon Jim,

      Neither HMRC nor any authority has claimed fraud, and how else does one evaluate worth but by the established method ?

      It is a fact that not one creditor is claiming the assets are worth more than the highest bidders valuation, there is a logical reason for this silence, something is only worth what someone is willing to pay.

      Rangers and its assets are simply not worth very much.

      • Jim Harkins

        My point, Niall, is that the way to establish the value of anything is to offer it on the market. The various offers made so far, culminating in Green’s, have been in the context of buying Rangers and continuing to operate as a football club. Offer Ibrox as land and a building, without the baggage, and see what you attract.
        As a matter of principle, HM Government business is conducted on the basis of competitive tendering (so that openness is established), and HMRC are representing the Government in this affair. I cannot understand why HMRC have remained so passive throughout the Administration period; I have said elsewhere that their attitude is beginning to smack of inertia rather than Olympian detachment.
        Tenders should be sought in this case. If the highest bid is then £1M then you have been right all along.
        Jim

  27. p groom

    seems lord glennie is not aware that clubs are not allowed to go to court. if he was one assumes he would have declined to take this case. rangers/dp naturally did not point this out to him. so glennie ploughs on and the best he can come up with is a technicality ie although sfa rules clearly state any sanction can be applied, the sfa rule used by rangers to justify their case does not include that actual wording. what a farce, like getting off a speeding conviction because the sign dimensions were a few mm out.
    If this goes to liquidation you would think that the asset sale would be open to all comers in order to maximise revenue but no it appears green is the only allowed bidder, in fact we have already been informed how much he will bid/pay and it aint much. how is this equitable for creditors?

    • This is just a question on that point. It would appear that Lord Glennie accepted that Rangers had no right of appeal to CAS on this point.
      However, even if they have no right to hear an appeal on the case itself, would they have the right to hear an appeal based on the point at issue, the then apparent, and now confirmed, misapplication of their own rules?
      That is, go to CAS or whoever, and say, “We are not challenging the verdicts, but, where does it say that they can penalize us in the way that have?”
      If I am reading what is said here accurately, and if it is correct:
      (http://sport.stv.tv/football/clubs/rangers/103918-why-rangers-court-win-against-the-sfa-raises-more-questions-than-answers/ ), then I see one big difference. Ashley Cole, at least tried to go to CAS, and was turned down because he had no right to bring the case itself to CAS. Surely this case seems to have been different from that of Rangers. Rangers are arguing that the Association has misapplied its own regulations, which is very different. My feeling is that, their (Rangers’) assumption that Cole is a precedent is wrong, because they are dealing with separate issues. It might be that CAS turned them down, but did they even try? Did they have a statement in writing from CAS, or anybody else, for that matter saying that there is no mechanism within football to correct what may be mistakes made by a football association in the application of its own regulations, as they wanted to assert.

      If they didn’t, then this surely takes away from the notion that the Cole case was a precedent.

      I am not a legal mind, but I have a lot of time on my hands at the moment, and it is just what I am thinking. So, please feel free to laugh at what might appear to be my challenging some of the greatest legal minds in Scotland. Or, at least be kind, and correct my mistakes which I will take on board for next time.

      Oh, and If I am right, would Lord Glennie’s decision have been any different?

  28. Niall Walker

    Hello Hugh,

    I can assure you that no admiistrator is permitted to run up any unsecured debt, never mind not paying its HMRC obigations. I believe the 4 million you refer to is from a previous era involving the small tax case.

    • Hugh Jarse

      HMRCs debt has increased by over £7m comparing the numbers between the D&P initial report and the CVA proposal. Part of that is approx £4m of PAYE/NIC/VAT accrued during the administration.

      You are right that they cannot run up unsecured debt which is why it is almost certain that HMRC will enforce this to be treated as a cost of administration (secured debt) and therefore it comes out of the CVA pot before anything else.

      This is one of several examples of sleight of hand in the CVA “proposal”.

  29. Nicomachan

    note the standard pence in pound inclusion with any CVA has been maliciously omitted in Green’s proposed CVA. It appears that all precedents set forth by the likes of Leeds and Sion are summarily dismissed in this account. This is morally reprehensible! Governing bodies are not longer bending rules but simply rewriting them. All of this with possible repercussions from FIFA. Green and the governing bodies are placing the entire SFA at risk. The embargo will look like a christmas gift if this plays out according to precedent set by Sion. Aye but this has all been slight of hand from the onset.

  30. Niall Walker

    Good evening Jim,

    The administrators requested offers from all parties, and no non-footballing party made a bid. The plain fact is these assets are nigh on worthless to a non-footballing investor, and everyone including HMRC knows it.

    We are right back to my original inention, Rangers is worth more to the creditors as a going concern than liquidated.

    • Hugh Jarse

      Not so. The administrators have (allegedly) been seeking buyers for the whole club as a going concern. When that fails and assets are offered up individually there will be no shortage of bidders for each ofthethree main real estate assets.

  31. Alexander Kerr Murphy

    Sorry Everyone, just had to switch off the DR Podacast as I really cannot understand what is happening in Scottish Football, I tried to listen to James Traynor and Co, BUT it was really riddiculous what they were saying, SFA, SFL, CFC everyone to blame ! No mention of massive Tax Fruad, Mr. Whyte, Duff & Duffer or Second Contracts, never mind SDM who wrecked the SFL, no !

    Absolute S**t, why ??

    James Traynor, are you from Planet Scotland ?? Do you read the blogs from RTC, or Phil or from Alex Channel 4, you and the Printed Press have so long now being outdone by real reporters, SHAME ON YOU, as for the DR, Scotsman, Herald, Evening Times, and The SUN ?? DA !

    It would be more efficient to read the Tehran Nucleur Times to get more accurate Info !!!

    Rangers ( IA ) as massive Tax Fruadelents, are finished, Jim ( T ) wake up and smell the Glove !

    Every Fan outside RFC will make it happen.

    Please forgive any spelling mistakes due to raw emotion !

  32. Alexander Kerr Murphy

    Sorry Paul, should have listed you too !!

  33. Nicomachan

    Here’s a perspective of the risk and severity of the Rangers slight of hand CVA and legal battles … IF FIFA intervenes we could see Craig Levein’s national side booted out of the next World Cup and Celtic denied a £15million ticket into next term’s Champions League. In addition to the Natinoal Team and Celtic collateral damage Motherwell could also be omitted their chance to secure a spot among the European elite while Dundee United, Hearts and St Johnstone will be left to sweat over their own money-spinning places into the Europa League. DP, Green, Whyte, Murray, the SPL and SFA are putting the nation and the league at risk to salvage these lying cheating. This whole process and the muppet administrators are morally reprehensible!!!

  34. p groom

    to nicomachan and others fulminating on here and elsewhere. a fairer method needs to be found of dealing with debt which doesnt involve shafting the creditors and letting perpetrators “get away with it”. this is the outsider’s view but for all the authorities concerned they probably see it as a normal run-of-the-mill insolvency case although higher profile than most . until there is reform in place the behaviour of companies which leads to such situations will carry on as will the opportunistic dealings of business men seeking to take advantage. sfa’s proposal to impose checks on payments to creditors and the taxman is at last a step in the right direction. meanwhile dont be surprised if authorities generally continue with the status quo albeit with a bit of harrumphing but not much else. why would they react to our high-minded outrage and thus risk the doomsday scenario nicomachan depicts when nothing illegal has been proved…yet? Sure rangers must be punished if/when the ebt case goes against them but that is a separate issue from cva/liquidation. the simple answer is that new owners must take on the whole debt of an enterprise they want to buy and if they cannot afford that then its not for them. too simple I know…

  35. Den

    The CVA asks people to vote on an undetermined value shared over an undetermined value of Creditors. TBC includes Big Tax Case, Debentures and EMPLOYEES.

    Para 5.11 – Money due from SPL and Broadcasting rights go to SEVCO, could be a reasonable sum.

    The sanctions for not agreeing is that Charles Green buys the assets from under you at a price agreed with D&P.

    Looks like tax payments due during the admin are included in the pre admin total. if HMRC get this re-classified it will wipe out the pot.

    If HMRC follow their guidelines at all they cannot agree the CVA.

    As to valuation.

    The player valuation will be tested soon. Any player who can get another club will do so, Rangers will be banned from Europe for a long time, may not even make it into the SPL for next year. If Rangers raise significantly more than the paltry valuation they have it will prove that D&P under valued the package. Further, if D&P had acted like old school Administrators these players would be worth up to four times what they achieve, D&P traded Transfer value for short term wage reductions, doesn’t look like a good trade.

    I emphasised the Employees as a TBC. I assume that Green will take those employees that he wants and leave the rest behind. Those left behind will be made redundant and their redundancy payments rank before ordinary creditors thus eating into the pence in the pound distribution.

    The question that D&P must answer is why those employees are still on the payroll, especially if they are entitled to low to zero redundancy payout.

    Looks like there is virtually nothing for the Creditors, except possibly one. I am not convinced that CW will just give up his secured status, he has done nothing altruistic so far, why start now.

    Should there be a CVA Rangers could carry right on into the SPL next year and the cup competitions, except that the owner of the shares is banned for life from involvement in Scottish football. Irrevocable agreement in place, perhaps it is like the unconditional offer that comes with conditions. I can’t see CW selling this bargaining chip for £2.

    Without a CVA Newco will have to reapply. Could be very interesting in the light of yesterday’s court case.

    The CVA raises many more questions than answers.

    Regarding asset valuation. SDM had a lot of clever people advising on how to present his accounts and took full advantage of opportunities to add expenditures to the balance sheet rather than write it off to the P&L. All legal but not always transparent. On the balance sheet unde Capital and reserves you will see the Reevaluation Reserve of £57,207, this represents revaluation of fixed assets upwards. To do this you will have to back up the valuation with a Surveyors Report. The Auditors will have to agree it.

    • M Lyons

      “The Auditors will have to agree it.” Seems to me a large part of the problem is that the auditors have agreed to everything RFC have put under their nose for the last ten years. (Presumably it is Saffrey Champness Glasgow as they are on creditors list for £32,000. Serves them right.) Here we have the valuation of the assets as the issue grossly overvalued in terms of FRS’s. Elsewhere we have the EBT’s for which the instigator is now saying that RFC didn’t follow his advice for all these years – but Saffreys never noticed. Then there is the big tax claim not accrued in the accounts which any junior accountant would have seen done. And did the auditors say anything about Graeme Souness getting £10,000 for nothing other than being an old pal of Murray’s or did they not notice.

      Seems to me that once again the auditors are getting away scot free. “Once again” because that’s what happened over RBS, B of S, Dunfermline Building Society, Northern Rock and the daddy of them all Lehmans where Ernst & Young signed off a set of accounts which were almost 100% fictitious. But then they if all went the same way as Arthur Anderson after Enron there wouldn’t be any auditing firms left. Not a bad thing as they obviously don’t serve any useful purpose in any case.

      • Den

        I don’t want to go off on Auditors, suffice to say I feel much the same way as you do. I think they are even more irrelevant these days than ever.

        Grant Thornton were the Rangers Auditors for a number of years. Saffery Champness were stiffed for something else, still no sympathy for them.

  36. Whilst Duff and Phelps were busy soliciting bids and offers for Rangers, did they make it clear to potential “buyers” that in fact all they were concerned about was funding, and frankly they did not care if it was a purchase or a loan? Presumably that possibility, which Mr Green has done very well to spot, might have been of interest to other possible investors. What if a consortium appeared now and offered the same terms as Mr Green, but to lend £12.5 million, rather than £8.5 million?

    Better for creditors!

    And also, unless I am much mistaken, the court action against Collyer Bristow can be continued by liquidators of Rangers, should liquidation take place. Duff & Phelps seem to have been spinning it that they can only do so by way of a CVA. Liquidators regulalrly pursue claims due to a company, for distribution to creditors.

  37. Nicomachan

    The Learned P Groom
    I appreciate your insight into this aforementioned debacle. However, I was neither pontificating nor was I fulminating facts. With all that has transpired I feel DP, Whyte, Murray, Green and company have made a reckless mockery of the governing bodies of football. One could argue that this was perpetuated by the league itself. This reckless disregard for integrity, process and procedure is evident when Paul Clark was asked how creditors could vote on a Company Voluntary Arrangement (CVA) when the yield is so uncertain. Mr Clark responded by stating, “They can – they don’t have to know. You show me the rule where they have to know. What I’m saying is that although there can be a certain level of distribution you can also have a situation where you’ve just got a certain level of assets – which is what we’ve got here – albeit it’s not a known level.”
    Standard inclusion, again it can be argued most importantly, is pence in the pound creditor distribution. This typical CVA line item was egregiously omitted in Rangers CVA. Concrete figures from the onset of this administrative process have been aqueous at best. Superficially this has been like Garry Kasparov teaching chess to primary school student minus the Kasparovian logic, reason and integrity. From the omission of pence in the pound, to the fluctuation in asset valuation (note Green wrote to investors, “They’ll read about a club cleansed of all its toxic debt and sitting with a property portfolio of just more than £113m …”) omission of player asset valuation/accountability, and the insurmountable and rising DP fees (now speculated to exceed £6.5).
    As for the “doomsday scenario,” this surly was not my intent. I was merely illustrating the facts and repercussions this mockery has placed in risk. Precedents have been set … I implore you to see Leeds United and FC Sion. While slight variations in governing will exist there has been a foundational model which one can conclude has set precedent. P Groom, I agree with your supposition that a “fairer method needs to be found of dealing with debt that doesn’t involve shafting the creditors and letting perpetrators “get away with it.”” I would suggest that truth, integrity and transparency have been lacking and suspect during this whole process. I would also suggest that this is purely a for-profit acquisition where sustainability of the club is not a consideration. Under the current structure, no matter the existence of Rangers FC or the formation of a “newco,” Duff and Phelps and Green and his Figment Consortium (and I express Green’s figment of imagination as full participants in this consortium still have yet to be named) will get paid. The collateral damage as previously explained could possibly jeopardize the entire league and national team.
    I see today it was reported Whyte and DP had an agreement to cap charges at £500,000 yet fees incurred have now exceed 10x the terms. DP is now attempting to justify the excess. Again, illustrating a lack integrity and making a mockery of the proceedings.

    • Chas W

      The content of the emails released by the BBC allegedly (neither party have been reported as disputing the validity) sent by mr whyte and responded to by mr Grier just prior to rangers going into administration may well be normal in such circumstances. However Ii would refer to the last sentance of mr whyte’s email. I would like to know if it is common practice for potential administrators to negotiate a “success fee” with the original owners, when if subsequently appointed they are to act “in the best interest of the creditors”.

  38. p groom

    nicomachan we are both on the same wavelength I assure you. I am also fulminating and raging at the moon as well over this saga but my point was that none of the participants are going to take any notice of us while the present rules allow and positively encourage such devious behaviour. I took an interest in rangers after having been gobsmacked at what went on and is still going on at portsmouth. rangers (ia) is just a repeat with bells on so nothing changes. right now there are probably plenty of similar insolvency cases playing out , and providing similar outcomes for creditors and wide boys out to make a fast buck. I am also a football fan and while I can understand the true rangers fans desire to keep their club in its accustomed lofty position I feel it may take its extinction tough though it will be, to bring about any changes in the way the game is run but I am not putting money on it happening..yet.
    as an aside I am wondering if the sfa have not been a tad premature in playing along with lord glennie now that fifa have finally got in the act. sfa could have said to LG we are bound by fifa’s rules so cannot comply with your ruling and fifa would presumably have backed them. may still do of course. rgds.

  39. This whole case is turning what i thought about right and wrong upside down. It seems that with very little financial input a character like Mr Green can swing in and out with all the valuable goodies before the creditors can have them sold for a reasonable amount to cover the dept the club owes. Surely that is what the 100 million valuation was on their accounts for. So as to raise funds, loans and have creditor status, and now that will all be stolen away by a few dubious maneuvers. I’m sick to the stomach with all this. Law and order? WHERE

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