One of our regular commenters, Den, posted the following in response to a comment by Niall. It gives Den’s summary of where we are and of what COULD happen, rather than what WILL happen.
I felt it would be useful to pop it up as a Guest Post – so here it is.
I am certainly struggling with this whole affair. My guess would be that another insolvency event is likely.
This whole affair has confirmed what I knew of the weaknesses of Company law and administration and surprised me in how blatantly the laws and rules can be, and were, disregarded.
It is hard time know what Craig Whyte is contesting or what he has ever been up to. I would think it was always in his own interests and always will be. If others lose on the way I don’t expect he will lose any sleep. Anyone who has followed this story will find it hard to disagree so far.
CW had control of Rangers. He has taken a huge loan from Ticketus to achieve this. If you accept that CW and Ticketless are naive business operators you may accept that they blundered and were sidelined at an early stage. Given the protagonists I tend to believe that they would have have tried to protect or reclaim their investment.
The CW tapes are interesting. I would dismiss his word in most circumstances but the tapes suggest he was protecting his investment by entering an agreement with CG which would have kept him in control of Rangers. His contribution of £137.5k may seem like chickenfeed in many circles but I think it is significant for the following reasons: CW doesn’t usually pay out anything at all, it is 25% of the 10% deposit on the £5.5m purchase price of the assets of Rangers Oldco, it went to Mr Ahmad’s mother.
My guess is that CG was still in the loop.
The EBT saga is ongoing and we know that the FTTT knocked five of the trusts on the head and also found the ones for SDM and those of his sons to be doubtful. There are letters by the score and they are related to the employment. Given that there is an appeal, it looks like a contingent liability to me.
The sale is not being contested at present but BDO haven’t played their hand at all up till now (I really wish that they would do something, but that is just me). CG may still sue, if he can persuade lawyers to take his case without payment up front. Someone else that we don’t know of may still emerge.
Seven million losses in seven months doesn’t make twelve million losses in twelve months inevitable. In the absence of effective management it usually means more than twelve million losses. So far the management doesn’t inspire confidence, my opinion of course.
Survival doesn’t hinge on a massive boycott but on continued support, the fans have done well in the circumstances but their patience is always being tested.
I don’t see much evidence of a business plan. Frightening cost base, lowered revenue possibilities, senior figures leaving regularly, board disunity. I don’t see two years under this scenario.
You say that once they are in the SPL they are more or less secure. That is two divisions from now. I wouldn’t be too sure that the progress will be one division per year. Even so they could struggle in the SPL. All in all it is a long haul for the fans and that is the key source of revenue for Rangers as Europe is out of sight and nobody is going to put significant sponsorship into a club that is so far from the big time with serious management issues.
It is of little consequence to me whether Rangers go bust again. I think it is probable though.
Like you say though; with Rangers anything is possible.
Posted by Den