We seem not to have had a statement from Duff and Phelps for such a long time now. However, having sold off all of the assets and business of the Rangers Football Club to Mr Green’s Sevco Scotland Ltd, as it then was, they have not had much to do, apart from explain to the Court why there was not a conflict of interest in the numerous dealings between Mr Grier of D&P (as it became) and Craig Whyte and his assorted Rangers-connected companies pre-administration.
And, as the bills had slowed to only around £60,000 per week for doing…well, they had to be doing something…they could be excused for keeping quiet.
But today, hot on the heels of Mr Green’s remarkable statement, of which more later, the D&P machine cranked into gear, and the following masterpiece emerged.
My comments are in bold after the relevant parts of Mr Clark’s statement. The statement itself can be found on the official Rangers website.
PAUL CLARK, of Duff and Phelps, joint administrators of RFC 2012 PLC (formerly The Rangers Football Club plc), issued the following statement today:
“I can confirm that the business and certain assets of RFC 2012 PLC – including the honours won by the Club – were acquired by Mr Charles Green’s consortium as part of the sale and purchase agreement.
Remember that? Guess how much Sevco paid for the “honours won by the club”.
The Asset Realisations detailed by D&P were as follows. The “honours won by the club” are included in one of the categories below.
The SPL Share £1
The SFA Membership £1
Leasehold Interests £1
Player Contracts & Registrations £2,749,990
Subsidiary Companies Share Capital £5
Heritable Properties £1,500,000
Plant & Machinery £1,250,000
Whichever category they fall into, D&P do not seem to have sold them for much! Maybe they formed part of the goodwill? I do not see the history as forming part of “plant and machinery”.
As goodwill is the most likely, and as that also includes, I think, the rights to Rangers trademarks and copyrights, then how much was paid for “all the honours”? 10p. 5p. 1p?
It is funny that I do not recall D&P before specifying that the honours were included in the sale. The word “honours” was not mentioned by D&P in the CVA Proposal, nor in their report to creditors after the assets sale.
“The SPL have been in contact with RFC 2012 PLC with regard to the SPL’s Commission which is examining Rangers’ historic use of EBTs. However, having taken legal advice, it is the Joint Administrators’ opinion that the SPL is not able to pursue RFC 2012 PLC in this matter.
At first sight that statement would seem to be correct. After all, if all that is left in RFC 2012 PLC, as it now is, is the dwindling balance left from what Sevco paid, then how can RFC 2012 be pursued. If it has sold off the titles, for example, then titles cannot be stripped from it.
“The SPL have stated that the Commission is empowered to review the use of EBTs under the contract between the SPL and its member club. RFC 2012 PLC no longer has a contract with the SPL and therefore the SPL has no jurisdiction over it.
However the position seems to be this. RFC 2012 PLC benefited from payment of prize money over the year during which the alleged rule breaking took place. Therefore that organisation must be the one liable to pay the penalty for the rule breaking alleged to have been carried out by that same company.
The rules of the SPL envisage that action can continue against a club which is no longer a member of the SPL, should the rules be broken when it was. To argue otherwise would be ludicrous. For example, should a club break every rule in the SPL book, and then be relegated, is it seriously the position that the SPL could take no action?
Rendering a financial penalty on RFC 2012 PLC might seem redundant when it is on the point of liquidation, but if the alleged rule breaking is to be investigated, then surely the alleged miscreant has to be invited to take part, as has happened here.
RFC 2012 PLC can choose not to turn up. It is either taking a risk, or D&P know they will be gone imminently, so it matters not to them.
“This has been communicated to the SPL and considering that further involvement in this matter is not in the interests of its creditors, RFC 2012 PLC will have no further involvement with the Commission.
As I mention, should the SPL Independent Commission decide that the penalty should be one of a financial nature to be imposed on RFC 2012 PLC, then this surely will have an impact on creditors?
And it seems rather ironic, after all of the contentious statements issued by D&P since they became involved, that this one is based on what they state to be the “interests of creditors”.
“Our primary role as Administrators was to rescue the business which has been achieved by Charles Green and his consortium and whilst any sanctions the Commission may levy will not affect RFC 2012 PLC this process would not appear to us to be helpful to the ongoing revival of Rangers.”
No! No! No!
As D&P themselves said:-
As advised in the Proposals report, the Joint Administrators must perform their functions with the purpose of achieving one of the following hierarchical objectives:
Rescuing the Company as a going concern; or
Achieving a better result for the Company’s creditors as a whole than would be likely if the Company were wound up (without first being in Administration); or
Realising property in order to make a distribution to one or more secured or preferential creditors.
D&P addressed what they had proudly achieved in their report last month where they said:-
As part of a wider agreement with the Joint Administrators which was finalised prior to the CVA meetings, Newco was obliged to purchase the business, history and certain assets of the Company should the CVA fail. Accordingly a going concern sale to Newco completed shortly after the meetings, which has resulted in the Joint Administrators achieving the second objective identified on the previous page, as a better result for creditors has been achieved than if the Company had been wound up without having first being in Administration.
So now they claim to have rescued the business when last month they claimed to have fulfilled the second goal of administration, and by definition NOT succeeded in the first. What has changed?
Have D&P read the rules? RFC 2012 PLC owned and ran Rangers throughout the entire period under investigation. Amongst the penalties which can be imposed are financial ones. If the Independent Commission decide that there has been wrongdoing and that this resulted in gains to Rangers which they ought not to have received, then how does this not involve RFC 2012 PLC?
And finally, what on earth is the reason for the administrator, acting in the interests of the creditors, to state “this process would not appear to us to be helpful to the ongoing revival of Rangers.“
It is, to be fair, one with which I entirely agree, but for diametrically opposed reasons from those advanced by D&P.
If I was a pedantic creditor, I would be looking not to pay for that part of the statement, as it is nothing to do with the interests of the creditors, unless secretly of course Mr Green has pledged to make a contribution to the creditors from the proceeds of a share issue … pause for laughs …and continue … which I suspect is not part of the plan.
To conclude, D&P produce a legally questionable opinion which seems to ignore the terms of the SPL’s own rules, and ignore the fact that a monetary penalty could be imposed, for what that is worth.
It is also of note, though I do not see anyone asking these questions of them, that these “honours” which mean so very much to Rangers and their fans were bought for a fraction of one pound by Sevco.
Brilliantly one of the arguments against liquidation for RFC 2012 PLC (as it now is) was that goodwill would have no value in a liquidation. Instead, in the asset sale, an infinitely greater amount than zero was obtained. Of course any sum is infinitely greater than zero, so the one pound paid for all of the goodwill, trademarks , titles and history of Rangers seems to have been a fantastic bargain for Mr Green to strike. Hopefully D&P might have to offer an explanation as to what on earth the thought process was to justify that!
Posted by Paul McConville