One Stop Roofing v Tixway UK Ltd – Craig Whyte’s Company Wound Up – A Case for His “Public Examination”?

I have written at some length about this case. You can find all of my posts about Tixway UK Ltd here.

This company was formed in 2007 whilst Mr Whyte was a disqualified Director. His now estranged wife, Kim Whyte, was therefore the sole director until she resigned to be replaced by her husband in 2008.

Craig Whyte in happier times, as winner of Bow Tie Wearer of the Year

One Stop Roofing Supplies Ltd had the misfortune to become involved with Mr Whyte through a company run by a Mr Keatings, a friend of Mr Whyte. Mr Keatings’ company needed to buy roof materials but could not get an appropriate line of credit. Mr Whyte stepped up to the plate and agreed that his company, Tixway UK Ltd, would pay for the materials used by Snowcast, Mr Keatings’ company. The business was owed over £85,000, which was a serious sum to be due.

Mr Whyte reneged on the deal and once the matter became public knowledge there were various statements made by or on behalf of Mr Whyte suggesting that there was no case, and indeed that this was only being pursued as a result of Mr Whyte’s position, almost in fact suggesting that it was a form of legalised blackmail, looking to profit form his honourable position.

Immense credit must go to the men at the helm of One Stop Roofing Supplies, Robert Jenkins and Paul Martin. Mr Martin is a lesser-known figure in the world of football than Mr Whyte, but an infinitely more honourable one. Until the end of last season, when he stepped down due to health issues, he was manager of Albion Rovers and was, along with the rest of his backroom and on-field team instrumental in Albion Rovers being promoted to, and then staying up in, SFL2.

Paul Martin – Possibly the best manager in the long history of Albion Rovers, and one of the men whose company defeated Mr Whyte

In fact, Mr Martin’s achievements at Cliftonhill now rank him probably above even Davie Provan, manager when Rovers last won promotion, in the glory season of 88-89.

However, alongside the fight to get into SFL2 and stay there, Mr Martin and Mr Jenkins fought an even tougher opponent – Mr Whyte.

He steadfastly denied liability, and ended up in a witness box at Glasgow Sheriff Court where he was found, among the more polite descriptions of the Sheriff, Nigel Ross, to be “wholly unreliable.” Mr Whyte failed to recall why he had been disqualified from being a company director for seven years. The Sheriff’s damning judgement allowed the media a lot more leeway to be critical of Mr Whyte, and the whole episode did him no favours as far as keeping Rangers afloat was concerned.

Even after the decision by the Sheriff that Tixway UK Ltd should pay One Stop £86,127.36 plus interest at 8 per cent from the raising of the action together with expenses, Mr Whyte appealed further, on what seemed, to be kind, an argument with a flimsy chance. His lawyers, Harper MacLeod, withdrew from acting for him, and the appeal was dropped.

The small world of Scottish law can be confusing for some. Harper Macleod have acted, in the past, for Celtic. They have represented the SPL. They were the solicitors for Mr Whyte’s company here, and for him personally in his Court of Session litigation with his wife.

Did Harper Macleod stop acting because Mr Whyte/Tixway stopped paying? Or was it because the appeal was unsupportable, or was it for “professional reasons”? Who knows, and neither Harper Macleod nor  Whyte will tell us.

In any event One Stop’s lawyers took their decree and have now been successful in having Lord Hodge in the Court of Session appoint a liquidator to Tixway UK Ltd.

In the last accounts Tixway UK Ltd Annual Accounts lodged by Tixway UK Ltd, the company is shown as having net assets of £2,369,046. However those accounts are up to 31 January 2010, the next accounts now being overdue, and very much so.

Tixway UK Ltd is owned by Liberty Capital Ltd, which in turn is owned by Mr Whyte.

Will there be any of the “investments” of Tixway UK Ltd left?

It was speculated that perhaps that company was the proprietor of Castle Grant, Mr Whyte’s highland home. On past form it is possible that the assets of Tixway UK Ltd have melted away like frost on a spring morning, although I am sure that One Stop’s lawyers will have taken every step possible to freeze whatever assets they could find.

Castle Grant – Mr Whyte’s stately home, without the “Council tiles” on the roof

This is a microcosm of the Rangers disaster. Normal businesses, not glamorous ones but run by hard working people, have lost out on varying amounts of money. Duff & Phelps produced a huge creditors’ list for Rangers, which even ignoring Ticketus and HMRC ran into millions.

One Stop will have spent a lot of money pursuing Tixway UK Ltd, and I wish them the very best in getting back as much as they possibly can.

The appointment of liquidator means that the assets of Tixway UK Ltd will be realised to meet its debts. On the basis that it was never clear what that company actually did, it might seem strange that it was owed almost £1 million at 31 January 2010. I am not suggesting that the debtors figure has been inflated. There is no evidence of that. However, Vital UK Ltd, the company whose failure led to Mr Whyte’s disqualification before, suffered from the very same problem, with over £650,000 of debtors only amounting to £100,000 recoverable.

One intriguing possibility is that Mr Whyte could be summoned back to court, and this time to the Court of Session, to be “publicly examined”. Under s133 of the Insolvency Act 1986:- “Where a company is being wound up by the court … the liquidator may at any time before the dissolution of the company apply to the court for the public examination of any person who—(a)is or has been an officer of the company”.

The liquidator must make such an application if asked to do so by “one-half, in value, of the company’s creditors”. On such an application being made the court would fix a date for the hearing. At the hearing the person so ordered to appear “shall attend on that day and be publicly examined as to the promotion, formation or management of the company or as to the conduct of its business and affairs, or his conduct or dealings in relation to the company.

If it turns out that the assets of Tixway UK Ltd have been dissipated, then I suspect that such an application will be made regarding Mr Whyte.

Section 124 of the Act deserves to be presented in full.

“(1)If a person without reasonable excuse fails at any time to attend his public examination under section 133, he is guilty of a contempt of court and liable to be punished accordingly.

(2)In a case where a person without reasonable excuse fails at any time to attend his examination under section 133 or there are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding or delaying his examination under that section, the court may cause a warrant to be issued to a constable or prescribed officer of the court—

(a)for the arrest of that person; and

(b)for the seizure of any books, papers, records, money or goods in that person’s possession.

(3)In such a case the court may authorise the person arrested under the warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the rules, until such time as the court may order.

I have no reason to believe that Mr Whyte would fail to attend, or abscond, or attempt to do so. However, in the highly unlikely event that he did, the powers granted by S134 are dramatic. Failure to attend could lead to him not being able to return to Scotland.

If Tixway UK Ltd remains asset rich, then One Stop will get their money and Mr Whyte would probably avoid such an examination. For all the interest that an appearance by Mr Whyte would generate at the Court of Session, I hope he does not get summoned as this would suggest that the debt has been paid.

 

Posted by Paul McConville

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14 Comments

Filed under Craig Whyte's Companies, Insolvency Act 1986, One Stop Roofing Supplies Ltd v Tixway UK Ltd

14 responses to “One Stop Roofing v Tixway UK Ltd – Craig Whyte’s Company Wound Up – A Case for His “Public Examination”?

  1. mick

    great read on whyte its sad hes conning every1 and nothing happens, whyte conned 400 security guards before of a weeks lieing time when vital security went bust hes a vile wee con man 1 day he will taste porriage hopefully, 2 £ a hour they paid guards and they had all the council contracts at the time

    • degough

      king charles walked and talked an hour after his head was cut off.
      King Charles walked and talked; an hour after, his head was cut off.

      You can’t make yourself fully understood when you do not use punctuation.

  2. Glazert Tim

    What can I say. The man is a Legend (or Legned if you are making up a RFF banner).

    If Crimewatch were ever to cover all of the crazy-horse shennanigans he is culpable of, it would run longer than the Eastenders Omnibus.

    It may be apocryphal, but I have it on good authority that he is in serious financial difficulty in the South of France too.

    He apparently owes Madame Le Clerque, the local Provy Woman about £4 Million Euros. She was observed entering his luxury appartment block on Monday night shouting through his letterbox:

    “Je sais que vous êtes là vous piquez, je peux voir votre téléviseur reflétant à travers votre fenêtre du salon.”

    Roughly translates as:

    “Ah know yer in there ya pr!ck, ah can see yer telly reflecting through your livin room windae.”.

  3. Glazert Tim

    On a more mischeivous note:

    The ‘Team With No Name’ is clearly having issues with registering under their usual moniker due to numerous instances of legal, financial and corporate governance legislation.

    If say one club in each of the SFL Divisions were to voluntarily rename themselves ‘Rangers1 to 3’ (as per relevant league) for a season, it would certainly cause a lot of hassle and hilarity.

    For sh!ts and giggles, is there any SFA/SFL legisaltion about team name changes (not company changes) that would prevent this? It would obviously be prohibited if the club were in administration or liquidation but what if they were honest, tax playing clubs and fancied a name change temporarily for a year?

    I know the probable answer is NO YE CANNAE, GET TAE YER BED but WHAT IF? . . . . . . . .

    (cue fuzzy dream sequence)

  4. Richboy

    The European legal system needs a good kick up the a**e. I am sick and tired of reading about people who rip off all and sundry and only end up in court several years after the event. The victims, and their employees, have to suffer the consequences of lost revenue, possible bankruptcy, redundancy and tightening their belts so that crooks like Whyte can enjoy their lavish style at everyone elses expense.

    Whyte is very obviously a crook evidenced by the fact that he didn’t pay any tax, NIC or VAT since August last year. Stick him in Barlinnie while he is investigated. No access to computers or his associates. BDO could then do a thorough forensic accounting investigation that would leave this this little grub in debtors prison for the rest of his miserable life. Hanging is too good for this drongo (sorry about the Australianism, but it is apt).

    Perhaps if this happened on a regular basis then all the scumbags in the financial sector might realise that we are serious and stop ripping us off.

    Rant over.

  5. degough

    All Whyte has to do is stay in Monaco. There is extradition from Monaco as they are party to the European Convention on Extradition. However it almost never happens that someone extradited from Monaco ends up arriving in the UK! It seems the European Convention on Extradition is worthless when it comes to Monaco. Looks like Whyte has thought of everything.

  6. Boss Hogg

    The evidence presented by Craig Whyte at Glasgow Sheriff Court and the findings of Sheriff Nigel Ross, the evidence heard at and the findings of the SFA Disciplinary Tribunal, the findings of the DTI in disqualifying Mr Whyte from acting as a company director for seven years. In combination these present a powerful argument that he is an incorrigibly bad man from whom the public and business need to be protected. That assessment deliberately ignores any anecdotal evidence and the investigations of such as the BBC.

    To whom should they look for protection? Politicians, regulatory authorities, the main stream media, the police?

    Oh dear.

  7. As you know, Big Lad, I’m not a dafty – or at least most certainly not your average one – but this guy is utterly baffling. He leaves more spoor than a snail.

  8. OnandOnandOnand

    Another aspect you might like to look at is the role of the FSA. Tixway shares were used to bolster the capital base of both Merchant House Group and Prichards (In Special Administration). The FSA would have had to be satisfied at that time (2009) that Tixway was good for the money. If, for example, some dodgy photoshopped invoices had been produced to vouch debtors (he wouldn’t do that, would he?) then MBB might be in even more Craig Whyte

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