Some additional thoughts arising from the reports so far from this morning’s case at the Court of Session before Lord Hodge.
As long as no one wonders about the sound of the laptop coming from the cupboard in the courtroom, I hope to keep the updates going this afternoon. I would ask any of the counsel appearing in the case to ensure they speak up, as the cupboard door makes it difficult sometimes to hear.
Counsel for Duff + Phelps told the court that there were £1.7 million of cash and “other assets” to be handed over by the administrators to the liquidators.
Bearing in mind that Sevco paid £5.5 million for all of the assets, how is the balance so reduced?
One reason – Duff & Phelps fees are in excess of £1 million and the costs incurred by them for various matters, but especially legal expenses regarding the English court actions against Collyer Bristow are over £1 million.
And of course, should the there liquidators not recover any more money, they will be paid out of the £1.7 million. The creditors will do well to see a penny, it appears.
However the costs sought by Duff & Phelps are being challenged in this hearing, and they are required to justify their position regarding them to the court.
What “other assets” are there?
This would seem to comprise the various claims ongoing, such as the cases against Collyer Bristow, Prichard Stockbrokers re the Arsenal Shares and potentially Mr Betts, although the last one seems to have dropped off D&P’s radar, at least from the reports they have produced. In addition, D&P were looking at one stage at pursuing return of the £250,000 paid, supposedly, to Banstead Athletic, the English non-league team with whom Aidan Earley is alleged to be connected, Mr Earley being a long time associate of Mr Whyte’s.
Other than that, it is hard to see what other assets there might be, as Sevco bought “the whole assets” of Rangers.
Collyer Bristow are objecting to the end of administration. I wondered what locus they had to argue this but, on checking the creditors list in the April proposal by D+P, Collyer Bristow is listed as a creditor to the sum of just over £40,000. As a creditor it can participate in the court proceedings regarding the administration process. However, as counsel for Collyer Bristow has not yet addressed the court, the precise terms of their objection are not clear.
It was indicated that, whilst Lord Hodge wanted to see the transcript of the BBC tape of Mr Whyte’s conversation with Mr Grier, this was not “relevant” to the issue before the court today.
This could well be recognition that, as the assets have been sold, there is no reason for the liquidators not to be in place now, but that would not preclude action against Duff & Phelps should the courts or regulatory authorities determine that rules have been broken.
It strikes me that lengthy hearings of evidence might be needed to determine if D&P have erred or not, and it would be prejudicial to the creditors to tie the issue up together.
I suspect that Duff & Phelps, even if administration ends today, will not have seen the last of Lord Hodge’s courtroom!
Posted by Paul McConville (desperate to sneak out of the cupboard to stretch his legs)