Worthington Group PLC released a statement to the Stock Exchange today. It can be read in full here. So what, one might say?
Apart from the apparent, or alleged, connections with Craig Whyte, some of which I looked at on this blog last year, I will quote the section from the release which has a bearing on our favourite Motherwell born billionaire and his once (and future?) football team.
The statement reads, at the relevant section:-
The Company is now pleased to announce that, as the first step in the possible acquisition of Law Financial Ltd (“LFL”), it has agreed to acquire a 26% stake in LFL for £250,000 payable in unsecured convertible loan notes. The Company has also been granted an option to acquire the remaining share capital of LFL. The full acquisition would be subject to shareholder approval and compliance with any applicable Listing Rules.
LFL, a recently incorporated company, has a number of subsidiaries, namely Sevco 5088 Ltd, Law Capital Ltd, Litigation Capital Ltd and Media Litigation Ltd (LFL and its subsidiaries hereafter being referred to as the Law Financial Group).
The assets of Sevco 5088 Ltd include a claim, which has been independently reviewed by Leading Counsel who is also a Deputy High Court Judge, to all of the business and assets of RFC 2012 Plc which were purchased by Sevco 5088 Limited or Sevco Scotland Ltd from the administrators of RFC 2012 plc in June of 2012. Sevco Scotland Ltd was subsequently renamed The Rangers Football Club Limited and its share capital was acquired by Rangers International Football Club Plc, the shares of which are now traded on AIM. It is the position of Sevco 5088 Ltd that it is the rightful owner of the business and those assets. After examination of the evidence, Leading Counsel’s advice is that there is a prima facie case to answer.
It has also been agreed that, pursuant to the agreement certain other related rights, assets and causes of action will be transferred to the Law Financial Group or directly to Worthington. Those assets include the Book, Film and Television rights to the two takeovers of The Rangers Football Club in 2011 and 2012 as it relates to Craig Whyte. It is intended that these rights will be commercialised in due course.
When one thought that the Rangers saga could get no more complicated … along comes another complication!
Law Financial Limited was incorporated on 12th March 2013. Its registered office is at 48 Skylines Village – an address very familiar to those who have studied Mr Whyte’s various company involvements over the years.
Law Capital Limited was incorporated on the same date and with the same Registered Office as also were Media Litigation Limited and Litigation Capital Ltd.
Twelfth March 2013 was a busy day in 48 Skylines Village!
So we have a new company of which 25% is being sold off to Worthington plc and as a result valuing the “Law Financial Group” at £1 million.
The only company forming part of the group which is older than 12th March 2013 is Sevco 5088 Ltd. Companies House records disclose the apparent “resignation” of Craig Whyte and of Aidan Earley as Directors on 16th April 2013, their appointments having been recorded on the site on 12th April 2013. In addition the Registered Office is again listed as 35 Vine Street, being the offices of Field Fisher Waterhouse. Only a few days ago the Registered Office was changed to Skylines Village!
However it is clear that those in charge of the Law Financial Group have been able to persuade the relevant directors of Worthington plc to make a substantial investment in the Group.
What assets are they buying?
As we see from the statement, the Group has “Leading Counsel’s Opinion” that Sevco 5088 Ltd is in fact the true owner of the assets of Rangers (being those sold by Duff and Phelps and which are owned by Rangers Football Club Ltd (which was formerly Sevco Scotland Ltd)).
Now the statement does not make clear whether the assets were “sold” to 5088 or to Sevco Scotland – one might have thought that those in charge of 5088 would know if they bought the assets or not.
However the precise mechanism by which the assets came to Sevco Scotland Ltd do remain unclear, and there have been conflicting statements by Mr Green and by spokesmen for Rangers.
In any event the suggestion is that Sevco 5088 has these rights and that these rights form part of the assets of the Law Financial Group.
This, and the valuation of the company indicated by the sale to Worthington, might suggest that Sevco 5088 is not entirely confident that it is entitled to all of the assets, sold for £5.5 million and now worth £40 million or more. On the other hand, such a valuation might seem to suggest that the company views there as being a possibility it might be paid some money to “go away”!
It would therefore not surprise me if we were to see Sevco 5088 initiate court action seeking damages or return of the assets. The reason for doing so would not necessarily be for there to be what would be a long drawn out and expensive court battle, but instead for there to be a settlement negotiated to end the case.
On the same basis that my guess is that BDO will, in the fullness of time, initiate proceedings in respect of alleged “gratuitous alienation” and that RIFC PLC or its subsidiary will buy off the claim by paying a few million which will go to creditors of oldco Rangers, I would not be surprised to see a multi-million pound claim being made by 5088.
The goal will be for a quick payment of a couple of million or so to end the claim, and to end uncertainty which might affect further the share price of RIFC PLC.
There is of course no guarantee that Rangers would agree to settle. It might be seen as akin to blackmail but is in fact a legitimate legal tactic. How much would it be worth to Rangers to end that uncertainty?
There remains what would undoubtedly be the vexed question of who actually owns 5088.
Mr Green’s comments about “handing back” 5088 to Mr Whyte suggests that he accepts that he does not own the company. However the change of director details and of registered office back to the status quo suggests that Mr Green might not actually be fulfilling his pledge to resign and give the now apparently useless company back to Mr Whyte.
And of course we see that, according to the release, the book, TV and film rights to the story of the two takeovers is vested in 5088 but is to be transferred to Law Financial or to Worthington.
Hollywood might be calling for Mr Whyte, and for even minor players in the tale, we might too be saying:-
“I’m ready for my close up Mr De Mille!”
Posted by Paul “Norma Desmond” McConville