The BBC and Duff & Phelps – Emails Re Fees Quotation and Questions for David Grier

In which I:

Comment on the response of Duff & Phelps to the emails published by the BBC regarding the “fee agreement” with Craig Whyte;

Point out apparent differences between what D&P are saying now and what they said at the start of the administration process; and

Consider whether in fact Mr Daly could sue Mr Whitehouse for defamation, and thus leave D&P in court proving that they have acted properly, rather than having the BBC prove that D&P acted improperly (allegedly).

I also ask the following question:- What justified Mr Grier, in the summer of 2011, going to HMRC, a substantial creditor of his client, and telling them that he, they, the sellers of the business and the supporters and media have all been “duped”? Presumably Mr Grier got his client’s permission to breach confidentiality. If not, and he viewed this as such a fundamental breach of trust in the client-accountant relationship that he was justified in telling the major creditor that Mr Whyte was, to put it bluntly “at it” (allegedly), how could he, or his partners, continue to act for Rangers/Whyte/Wavetower/Liberty Capital?


After Mark Daly’s further BBC programme about Rangers, its tax and financial affairs, and the role of administrators Duff & Phelps, there was a vigorous response from the Insolvency Practitioners. I wrote about their response and the questions that remained for D&P and its partner David Grier here

I wanted to look at the further emails produced by the BBC, and to the reaction of Duff and Phelps. You can find the emails here. I have copied them into this page below.

Click on the images to enlarge them.

Have a good read through them. Then we have the response from Duff & Phelps, as posted on the Rangers website on 31st May. My comments are in bold beneath the relevant sections.

As well as the issues between the BBC and D&P, the emails are very instructive regarding what Mr Whyte’s plan was in those long-gone days of February. I will write about those in my next post.


Duff and Phelps, administrators of Rangers Football Club issued the following statement on 31st May.

Paul Clark, joint administrator, said: “Over the past week or so BBC Scotland and the journalist Mark Daly have broadcast a number of false, inaccurate and defamatory allegations about Duff and Phelps which have been referred to our solicitors.

This sounds reminiscent of what happened when the first Mark Daly programme about Rangers was broadcast. Mr Whyte demanded apologies and threatened court action, both in his name and in that of Rangers. Carter-Ruck was instructed…and nothing happened.

At least nothing happened from October until February when, according to the Scotsman on 18th February 2012, Mr Whyte raised a court action against the BBC and Robert Burns of the Insolvency Service. However this has gone very quiet since then, and one suspects that action might be left to wither and die. As far as I am aware neither Duff & Phelps nor Mr Grier have raised proceedings against the BBC. If matters were as clear as they suggested, then one would have expected a writ almost by the time the closing credits rolled.

Looked at from the other perspective, it would probably be defamatory to accuse someone, especially the national broadcaster and a respected and prize-winning journalist of making “false, inaccurate and defamatory” allegations. If D&P/Mr Grier sue the BBC, it will be for the BBC to make out its allegations, and to prove them on the balance of probabilities. (They would also mount defences of fair comment, as per the Reynolds case, I am sure.)

However, if the BBC or Mr Daly sued D&P, or Mr Whitehouse, then it would be effectively for D&P to disprove the allegations. In a spirit of free speech, I would be surprised if a journalist like Mr Daly took such action, but clearly what Mr Whitehouse says could lower Mr Daly’s reputation in the minds of right-thinking people – a key element in defamation.


“Mr Daly’s latest report, based on email correspondence prior to administration, suggests that Duff and Phelps had agreed to cap the cost of administration at £500,000. This is a wholly misleading and inaccurate assertion. The email Mr Daly referred to is a fee quotation our firm supplied to Craig Whyte that was based on information he had supplied to us and was for anticipated work relating to a specific possible administration outcome. This outcome did not materialise and therefore the quotation was therefore redundant.

The fee quotation was issued on or before 11th February. On 13th February Mr Whyte, on behalf of Rangers, intimated the intention of Rangers Football Club PLC to enter into administration. This would have given them 14 days before needing to appoint D&P as administrators. There was clearly a plan for the next 14 days, but that was derailed by HMRC presenting a petition for appointment of an administrator immediately, which resulted in D&P being parachuted in as administrators on the 14th February.

I wonder who framed Mr Whitehouse’s statement – “therefore the quotation was therefore redundant”. As the joke says, in the dictionary, under redundant it says, “See redundant”.

D&P are correct to say that the specific circumstances of the fee quote failed to arise. However, as I mention in my next post, the plans seemed very specific, and seemed to have collapsed between 11th and 12th February and 14th February.

It is wrong for D&P to say that fees were not capped at £500,000. In fact they were, subject to conditions. Those conditions were not fulfilled so the cap came off.

Let’s look at what Mr Grier had to say in his statement at the time of the BBC programme last month:- “The reality is that when my concerns about the use of Ticketus funding crystallised over the summer of 2011, I took immediate steps to raise these concerns with controlling directors of Rangers and HMRC.”

He went on to say:- “It is clear now, with the benefit of hindsight, that material information was withheld from us, and others, prior to the acquisition of the Club and, once we discovered the full extent of the funding relationship between Ticketus, Liberty Capital and the Club, we took immediate steps to raise our concern with controlling directors of Rangers and HMRC.”

Therefore, according to Mr Grier, he knew in the summer of 2011 that he had concerns about the funding of Mr Whyte’s deal, so much so that he spoke to Mr Whyte about it, and also to HMRC.

As an aside, I wonder if any accountancy minded readers can help me. What justifies Mr Grier going to HMRC, a substantial creditor of his client, and telling them that he, they, the sellers of the business and the supporters and media have all been “duped”? Presumably Mr Grier either got his client’s permission to breach confidentiality. If not, and he viewed this as such a fundamental breach of trust in the client-accountant relationship that he was justified in telling the major creditor that Mr Whyte was, to put it bluntly “at it” (allegedly), how could he, or his partners, continue to act for Rangers/Whyte/Wavetower/Liberty Capital?

According to Mr Grier, he knew in the summer of 2011 that MATERIAL INFORMATION WAS WITHHELD FROM US. Why was he still acting?

As a solicitor, if your client is found to have misled not just you as the adviser, but others, then you would fond it very difficult to continue to act for them. If you did, and best advice would be not to continue to represent that client, you would expect it to be made crystal clear in correspondence what you expected of your client in future, and the consequences of the client’s failure to abide by those terms.

Do the emails produced above have the tone of a professional who has been misled by his client, and who wants to ensure that he is getting 100% truth from him? Or do they strike the reader as being part of an ongoing and friendly business relationship, where concerns about being misled are not in the picture at all?

As Mr Grier is a responsible professional, I can only assume that he had satisfied himself that Mr Whyte was now going to play ball and that the fundamental breach of adviser-client relations had been healed. It would clearly be wrong to suggest that D&P continued to act because they saw lots of fees on the horizon and the chance to participate in what Duff & Phelps’ worldwide website lists as the biggest football insolvency on the UK, and indeed the only item for 2012 recorded on the worldwide D&P timeline!

The pictures of Mr Grier with Mr Whyte at Ibrox in the immediate aftermath of the takeover and Mr Grier’s attendance at the celebration dinner in London, were clearly situations where the accountant felt he was being dragged along unwillingly, simply to show face for his client.


“For the BBC and Mr Daly to use this information in such a distorted manner is absurd and betrays a lack of objectivity and demonstrates poor journalistic standards.

Distortion, lack of objectivity and poor journalistic standards…yes, that looks defamatory of Mr Daly. I wonder if Mr Whitehouse had legal advice prior to issuing the statement?


“From the first day of administration, it became clear to us that the Club was in a major insolvency situation that was going to last for a significant period of time.

On 15th February 2012, D&P issued a statement, which included the following:-

“In broad terms, … we hope to reach a stage as soon as possible where the Club can emerge from administration…

“There had been widespread publicity and speculation regarding the financial affairs of the football club. For clarity, the cost structure of the Club and ongoing losses were such that the Club had outstanding liabilities to HMRC. These were the subject of discussion and clearly HMRC wished to see them resolved as a matter of urgency. We are involved in dialogue with HMRC and will work with them constructively, as is the case with all other key stakeholders.”

On 14th February, the day of appointment, they had said:-

I can’t give any firm commitment but certainly over the next day or two we hope to get control of the finances of the club and to better understand what we need to do in the coming days and weeks. The club had been in such a period of uncertainty that the administration will actually relieve that uncertainty and start to build the future and how this great institution will come out of administration, and that will be part of our process.”

Craig Whyte, the man who appointed D&P and who was engaged in friendly email correspondence with Mr Grier but two days before, said this on 14th February:-

“It remains our firm belief that the Club’s future can be secured and we hope this period of administration will be as short as possible.”

As an aside, I should point out that, in the first official statement made by Mr Clark on 14th February, at the bottom of the same piece from which I have quoted Mr Whyte, he, Mr Clark, said the following:-

“”As administrators we have a statutory duty to act in the best interests of all creditors and we will fulfil that function diligently… I can assure all Rangers supporters that all aspects of the administration will be carried out with the interests of the club firmly in mind.

On 11th and 12th February Mr Grier did not think that administration was going to be a long process. After all, if the fees have been running at £200,000 per week, a £500,000 fee estimate suggests it would have lasted much less than a month. Nothing said in the above statements suggests that administration was going to be a process lasting for a significant period of time. The statement made for “clarity” by D&P on 15th February implied that the reason for administration was the liability to HMRC. Without saying anything that was manifestly false, any casual, or indeed close, reader of what D&P said in the early days would not have come away with the impression that, from the very start, this was “a major insolvency situation that was going to last for a significant period of time”.


“Since the Club entered administration, we have fulfilled our statutory duty to look after the interests of creditors and keep the business going despite the challenging circumstances.

We shall pass over the rather unusual circumstances of this administration, where the only real cost-cutting measure was agreeing with the players for them to reduce earnings over a period, in return for being allowed to leave for rock-bottom process. D&P might consider it a compliment to have it said that they managed to get to the end of the season with no concrete signs of the fact that the team was in administration, other than the 10 point penalty!


“As stated on Tuesday in the CVA document, all fees are subject to approval by creditors and are in keeping with the best practice guidelines from insolvency practitioners bodies.

It is very rare that the fees incurred in an Insolvency are reduced. Insolvency Practitioners are professionals – well aware of their responsibilities. From an early stage D&P took the view that Rangers was a marketable commodity, and that keeping it together was the best way to maximise the return for creditors. Hindsight allows us to second-guess what they did. Was that decision questioned at the time? Yes it was, and by a large number of people. Would the conduct of D&P in the administration be seen as reducing the fees they are due – probably not. Are outside observers and creditors entitled to raise questions about the fact that, 2 days before administration, a fee quote, conditional on certain matters, of £500,000 is made and yet, the administrators’ costs are now well over £3 million? Of course they are!


“It is also worth clarifying that the BBC has got its sums wrong when stating our fees are now more than 10 times the original quotation.”

Correct. The administrators’ fees as listed in the CVA document total £3.3 million, so that is only 6.6 times the original estimate. Clearly ridiculous to assert that it is ten times the estimate. Of course the £1.8 million of legal fees incurred brings the total to over £5 million, but D&P are correct in saying that their fees are only £3.3 million.



Does this statement from D&P clarify matters? Does it make their position more credible? I do not think so. All it does is raise even more questions to add to those already asked, but not yet answered. The statement strikes me as they type of report or comment written in haste and in anger. Generally the advice is to leave it in a drawer overnight, and look at it again in the cold light of day. That would allow the writer to calm down and focus in on the issues.

Instead this statement arguably gives, as I read it, Mr Daly grounds to sue Mr Whitehouse. It answers none, I would submit, of the questions raised by the terms of the emails. It suggests that the comments of D&P at the earliest stages of administration were either wrong, or were “spun” for best effect. And it ends with a playground style taunt – “It’s not ten times, it’s only 6.6 times! Yah-boo!”

Not impressive…


Posted by Paul McConville



Filed under Administration, Football, Rangers

11 responses to “The BBC and Duff & Phelps – Emails Re Fees Quotation and Questions for David Grier

  1. kevin mcsherry

    I have read that it is possible that when the CVA is rejected, that creditors could ask for D&P to be removed and for the creditors to put in place their own administrators. Is this correct? And if so what do you believe are the chances of this happening?
    To a layman like myself D&Ps administration appears to be shambolic at best, their CVA offer is almost hard to believe, and the apparent deal to sell RFC(IA) assets to Green for £5.5M almost criminal.
    Surely administrators appointed by creditors could establish a better deal for example by selling the entire first team, even at knockdown prices this could raise more than the £5.5M offered by Green.
    Is it not possible that a CVA could offer creditors a percentage of their money paid back over time?
    Apologies if these are simple questions already covered elsewhere but there is so much being written about this and often it is contradictory and often it is peoples opinions written as if it was fact that it is difficult to actually grasp what is likely to happen.

    • Tyke Bhoy

      It is not a well kept secret but perhaps urban myth that BDO have been approached by HMRC to affirm they would have no conflict of interest in a certain liquidation (see various posts on the RangersTaxCase blog).

      While a given percentage in future would be impossible to guarantee as part of a CVA, a conditional payment is not beyond the realms of possibility. I am told there is a provision in the accounts of Leeds Utd for a payment of several million to kick in as an additional contribution to the CVA creditors pot should Leeds gain promotion to the Premiership before the 17/18 season. If true it would be interesting if the Premiership bubble burst before then. That’s one of the reasons a guaranteed future payment isn’t really feasible as part of the CVA.

      • easyJambo

        Tyke Bhoy – It is true.

        There is a contingent liability of £4.75M in the 2011 accounts for Leeds City Holdings Ltd, should they gain promotion to the EPL before 2017/18, payable to the liquidator of Leeds United AFC Ltd, under the provisions of the sale agreement dated 4th May 2007.

  2. corrib04

    Distortion, lack of objectivity and poor journalistic standards…yes, that looks defamatory of Mr Daly. I wonder if Mr Whitehouse had legal advice prior to issuing the statement?

    – Perhaps he has the same lawyer as Mr Cameron?….no wait…

    Fine work Paul. Your ability to clarify events is much appreciated. Fascinating.

  3. Weegie

    Sorry if this has been answered (clearly) before. The Ticketus money was used (in part) to pay the £18M owed to Lloyds Bank? What is the bookkeeping entry which gave DW a floating charge over the assets (Ibrox, Murray Park, etc)? To achieve this he would need to have been owed approx £18M by RFC so where did his £18M come from? If he did not bring new money in he must have taken this from RFC? This means he has given himself preference over other creditors. Who authorised this? Normally distributions etc require to be approved by the RFC Board, so were they complicit? This looks fraudulent and can be simply resolved by any 2nd year law/accountancy traine with access to the documents never mind £5.5M!

  4. JimBhoy

    Hi Paul, 2 simple questions here… When the CVA is kicked into touch as the creditors have no idea what they will get but it will be assumed derisory IMO. Can they, the creditors, stop any firesale of assets, objecting to the fact that their best interests have NOT been supported as all assets combined might actually be 10 times (or even 6.6 times) more than the £5 or £6m Green could snap the club up for?

    Is Green getting the assets for hard cash or is he looking at some loan again where effectively he is buying the company with Rangers monies?

    And lastly an observation… The Rangers masses are keen to march on hampden, walk around Ibrox etc when they feel an injustice is done by the SFA/SPL/ Review panel but surely there are way too many questions than answers around D&P/Green handling/motives and why are they not up in arms over that. Hope diminishes as days go by..

    • tainted orange

      green is getting the assets for £2.00 not bad, twice the amount whyte paid. Similar to Whyte, Green is going to lend Rfc £8.3M which will be paid back in full in 2020 inc interest which he will pocket and still retain the assets.

  5. Why is the Police or the Fraud Squad not involved in this…seems to me to be a clear case of financial jookery pookery as ever there was.

  6. Paul, you’re a busy man. Another impressive and impressively detailed read. A couple of minor points:
    The sources I’ve been reading name Clark as the JA who said the above, not Whitehouse. Indeed, Clark has said lots since the CVA was published, in an increasingly, ahem, ‘robust’ manner – eg his tetchy response when asked how creditors could accept their CVA distribution without knowing what it would be: “They don’t have to know. You show me the rule where they have to know,” he snapped. I’d point him at rule one…common sense…
    (He also said at the same briefing “it is rare that (creditors) know a strict number of pence in the £.” Is that true? I’ve only ever written on football club administrations, and they’ve almost always detailed the “p in the £” – to two decimal places in Plymouth’s case, if memory serves).
    Second minor point: There have been numerous drafting mistakes in statements on the Rangers website. I think the over-subscription of “therefore” might be the club’s fault, not Clark’s. Verry slloppy prof reading, Im sure you’ll aggree…” (an old sub-editor’s joke, from a middle-aged sub-editor).

  7. Den


    Glad you posted this. I had the feeling that it was going to largely overlooked, but you did an excellent job on it.

    Mr Grier would appear to have got over any concrns that he had about information being wittheld. No professional would take on such sensitive work with a client that he strongly believed was not truthful.

    The trust doesn’t apear to be mutual, Mr Whyte on the other hand was asking for a cap on fees to stop the Administrators keeping the process going too long, see point 5 of his mail.

    He wants the proposal addressed to the Group not the club (which is going into admin) but costs for PR, Security etc are will be ‘Handled by the club’.

    “Happy with a success fee as suggested”
    I think the IPA would look at that in horror. The duties of an Administrator are well covered elsewhere, it would seem to me that any suggestion of an incentive from any party be they Chairman of the company, secured Creditor or anyone else would break their rules.

    Mr Grier in reply undertook to “minimise the length of the process” and “keep you advised of all emerging issues”. Not the arms length business relationship I would expect,of course he had a long relationship with Craig Whyte and possibly felt that a less formal mode of communication was appropriate.

    The response from D&P was odd but significantly they did not dispute that the mails were authentic.

    I wonder what happened to cause the Administration period to go from hours to months (3 so far).

    No lawsuits so far, must be an oversight, but they tend to take a lot of time over things. I wonder if their invoicing is as leisurely as everything else about D&P appears.

  8. Just a small observation not linked to the main content of the BLOG Paul, but its interesting to note the name of the “project”. One could assume that it is another error in RFC IA when the key individuals associated with this proud reputable club have named the project, “WILLIAM” maybe this is just an innocent nametag but when formulating projects it is normal to give them appropriate titles, just another extension of the bigoted sectarinism that is propogated at all levels by this fine establishment. I am guessing that for readers there is no need to highlight the obvious associations with the title “WILLIAM” especially around this time of the year……………………………

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s