Will Hearts’ Financial Woes Save Dundee From Relegation? Tough Choices For the SPL

The SPL have decided to discuss the situation at Hearts on Monday, after the SPL season ends.

The majority owner of Hearts and the main creditor, UBIG and UKIO Bankas, are both in, or have applied to go into, administration.

Mr Romanov’s always interesting stewardship of Hearts seems inevitably at an end.

The Lithuanian administrators will see what they can realise from Hearts – perhaps only the ground will prove worth anything?

The SPL Rules on Insolvency Events read as follows:-

Where a Club which was a member of the League in the immediately preceding Season takes, suffers or is subject to an Insolvency Event that Club shall be deducted the greater of 10 points and one third, rounded up to the nearest whole number, of the total number of points, excluding any points deducted for any reason, gained by that Club in the League in the immediately preceding Season and where a Club which was not a member of the League in the immediately preceding Season takes, suffers or is subject to an Insolvency Event that Club shall be deducted 10 points. Where the Insolvency Event occurs during a Season, the requisite points deduction shall apply immediately. Where the Insolvency Event occurs during the Close Season the requisite points deduction shall apply in respect of the immediately following Season, such that the Club starts that immediately following Season on minus the requisite number of points.

So, if Hearts are deemed to have suffered an Insolvency Event this season, then we look to see how many points they gained last year – 52. That is then divided by three and rounded up to 18, which would be the deduction from its points this season.

An 18 point deduction would ensure that Hearts would finish bottom of the SPL, would be relegated, and would have thus ensured John Brown would have accomplished a remarkable Houdini act. With one straight talking bound, they were free!

As matters stand, if Hearts are deemed not to have an Insolvency Event until after the season ends, then they would, as matters stand, commence next season in the SPL, but starting at minus fifteen points – a potentially devastating deficit.

How do the SPL define the “club”?

For the purposes of Rules A6.8 to A6.10 (inclusive) all references to a Club taking, suffering or being subject to an Insolvency Event and/or an Insolvency Process as well as including the owner and operator of a Club taking, suffering or being subject to an Insolvency Event and/or an Insolvency Process shall, if the Board so determines having regard to (i) the need to protect the integrity and continuity of the League; (ii) the reputation of the League; and (iii) the relationship between such owner and operator and the Group Undertaking concerned, also include any Group Undertaking of such an owner and operator taking, suffering or being subject to an Insolvency Event and/or an Insolvency Process.

Heart of Midlothian PLC is the entity which, in the Rangers parlance, owns the assets and business of Heart Football Club. That company is in the majority ownership of UBIG. So whilst the company owning the assets is not the victim of an Insolvency Event, it is in the discretion of the SPL Board whether or not to penalise Hearts.

The SPL Board must consider (i) the need to protect the integrity and continuity of the League; (ii) the reputation of the League; and (iii) the relationship between such owner and operator and the Group Undertaking concerned.

So the SPL Board is faced with more tough choices.

1                     Is the insolvency of UBIG and Ukio Bankas close enough to Tynecastle to be treated as a “Hearts” insolvency?

2                     Have “Hearts” therefore suffered an Insolvency Event?

3                     If they have, will it be deemed to have taken place this season?

4                     Does the appeal lodged by Ukio Bankas against its insolvency determination have the potential to affect the decision?

5                     If not, then will the SPL Board impose an 18 point deduction for this season leading to Dundee’s rescue from relegation?

6                     How would such an outcome fit with protecting the integrity and continuity of the league and its reputation?

If looking at “continuity” then there would be a lot to be said for Dundee remaining in the SPL and Hearts being relegated – on the basis that there must be a possibility that Hearts will not be in position to play football at the start of the next season – better the SPL start with 12 teams than 11!

There is also an interesting quirk regarding appeals. If the SPL Board decides to deduct 18 points from Hearts and relegate them, the Hearts can appeal against that decision.

However Dundee would not have the right to appeal, based on my reading of the rules, if the SPL Board chooses not to impose an 18 point penalty or indeed any penalty at all.

However, as a body affected by a quasi-judicial decision it would be contrary to natural justice for Dundee to have no rights of appeal at all. In that case they could have the option of taking a case for Judicial Review to the Court of Session.

So it looks as if the SPL could find itself left with another summer of uncertainty (over and above the confusion caused by the re-organisation saga).

The SPL Board is faced with a very tough choice – honour the results and relegate Dundee whilst leaving the SPL with a team not certain to start the next season, or impose a penalty and relegate Hearts, losing another of the bigger attractions from the SPL.

How quickly will a decision be made?

Last season ended with an argument about whether newco Rangers should get back to the SPL straight away, and as a consequence a dispute between Dunfermline and Dundee about whether Dunfermline were saved from relegation.

Dundee therefore could also face a second summer of uncertainty – and even if it is saved will it be too late to make its plans for an SPL season. A team set up for SFL1 will struggle in the SPL. Might survival through Hearts’ misfortune actually be a curse – dooming them to relegation next season too.

Posted by Paul McConville

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277 Comments

Filed under Administration, Dundee FC, Football Governance, Hearts, SPL

277 responses to “Will Hearts’ Financial Woes Save Dundee From Relegation? Tough Choices For the SPL

  1. Reading the Orcs on Rainjurz Meeja ( I know, I know) fantasising about playing down here in pre season in the likes of Hillsborough and Elland Road.They don’t get just how much the average English football fan, and decent minded citizens dislike them and their knuckle dragging followers.
    The cops absolutely detest them with good reason.
    They’re so thick and beyond reason that they don’t realise no police force will let them congregate in any football stadium south of Berwick.
    Their posters give a great reason for a ‘day oot’ at Hillsborough to see Rhys Judas McCabe’s leg getting smashed by an agricultural challenge from one of their SFL3 quality players.
    These feckwits masquerading as football fans really are beyond parody, salvation,and redemption.
    I hope their Newclub dies soon and is never resurrected in any shape or form.
    The problem then becomes what does society do with all these raging misfits with no vehicle to help them spout their bile by venting their spleen.
    Maybe we should send them all to the frontline in Afghanistan and find out how much they love their Queen and country ey?

    • Niall Walker

      Marty,

      P.G.Wodehouse, who had his stint in a Nazi concentration camp, was asked if he hated the Nazis. Wodehouse’s answer, was: I don’t hate in the plural.

      • mick

        Well said Marty a man that speaks truth about his thoughts well done a hate them to but a treat each 1 a meet with respect and try and be nice to them on there own there nice in groups they act like animals the msm a blame

      • I think he also said that you should never apologise in life as the right sort didn’t ever ask for an apology, and the wrong sort took advantage of an apology.Guy was an arse in my honest opinion.

      • ecojon

        @Niall Walker

        Obviously my definition of a concentration camp differs from yours.

        http://www.guardian.co.uk/books/2011/aug/26/pg-wodehouse-denied-collaborator

        PG Wodehouse was questioned by MI5 as a suspected collaborator for broadcasting from Berlin during the second world war. The creator of Jeeves protested that he was shocked and dismayed at the criticism his broadcasts had provoked in Britain.

        How the cosy world of Bertie Wooster collided with harsh reality is revealed in MI5 files released today at the National Archives. “I thought that people, hearing the talks, would admire me for having kept cheerful under difficult conditions,” he said in a statement for MI5 in 1944.

        Wodehouse was living in France when war broke out. He was taken prisoner when Germany invaded and sent to an internment camp in the German town of Tost, Upper Silesia. He described how, “as he was playing in a cricket match” on 21 June 1941, he was told to pack his bags and was put on a train to Berlin.

        He was put up at the city’s Adlon hotel, and was paid to make a series of broadcasts, mainly for American listeners, describing his life as an internee. He claimed he was motivated by gratitude over letters sent by fans from the US.

        The Wodehouse files are among a number released at the National Archives on people regarded by MI5 as potential “British renegades”, including collaborators, stool pigeons and possible subversives.

        After the Berlin broadcasts Wodehouse and his wife, Ethel, moved to Paris, where they stayed at German expense at the Bristol hotel. It was there that he was interrogated after the liberation of Paris.

      • gortnamona

        Niall – don’t exaggerate
        P. G. Spent some time in Internment in France, not a concentration camp.
        There was a vast difference. The difference between life and death.

    • Adam

      I also live “down here” and I have the exact opposite view of English fans and Rangers(and Celtic for that matter) Most, if not all, people I have discussed football with down here would love both of them playing down here along with everything the “Old Firm” and their fans bring with it.

      Im guessing we just sit in different circles.

      • Bollocks Adam…..and you know it.

        • Adam

          I can absolutely assure you. I could count on 1 hand the number of people who bring up anything about any trouble or anything like that. I can even swear on my kids lives on it. As i say, we clearly mix in different circles.

          • OldFirm 1

            Presumably you don’t live in Manchester where the devastation caused by Ringers was akin to the blitz. Only a fool would be sufficiently naive to promote having Spivco fans anywhere near their home town.

      • I also live down south and I could count on the fingers of one foot the number of people that have expressed a desire for the Old Firm to join the English Leagues.

        Complete and utter indifference would be the most accurate description of the majority of fans.

  2. Niall Walker

    ecojon,

    How many shares or equivalent value is CW entitled to if he wins ?

    • ecojon

      @ Niall Walker

      It’s not as simple as that – go and read the legal opinion and you’ll be able to get a better idea and I know you are perfectly capable of doing that 🙂

    • arb urns

      The Rangers World’s his oyster as long as he aint lunch for the octopus

    • Raymilland

      @Niall Walker

      The main arbiter of the Whyte/Green dispute is BDO; they have the power to declare the sale void.

      Come on ye BDO!

      • Niall Walker

        Ray,

        I know the assets etc can be transferred back to Sevco 5088 but I cannot work out what shares were agreed between Whyte and Green, I am trying to work out how much CW wants.

        • Raymilland

          @Niall Walker

          Quantum of shares would have been a four way split had the Sevco 5088 deal been adhered to. Green’s disposal of the shares has breached the agreement.

          The sale should be deemed void. It would be in the interest of creditors to renegotiate the sale.

          Green is a sitting duck for civil action from all quarters.

          • Niall Walker

            Ray,

            What do you mean by a 4 way split ?

            They can’t have 25% each, what about the investors who put up the 5.3 million ?

  3. COYBIG

    @ecojon

    You could have just c&p’d the link that CharlotteFakes tweeted. 😀

  4. ecojon

    Charlotte has a sense of humour 🙂

    Charlotte Fakeovers ‏@CharlotteFakes 50m
    Prominent Rangers Supporters Spokesperson sends me this, thinking I’m Craig!!! “Been an admirer of your recent work. Would be good to talk”

    Charlotte Fakeovers ‏@CharlotteFakes 48m
    I should have offered the clown a seat on the board on the basis of unconditional support. However I shall never claim to be someone else.

  5. Kenny

    Maybe it is the PDF reader on my phone but the legal advice document prepared by Merchant Legal LLP has a collection of strange looking fonts. The contents are all plausible though.
    Evidence that SEVCO 5088 had paid 2.2m by 30 May 2012? But no evidence that 5088 had transferred the assets to SEVCO Scotland. If there was a transfer, where is the consideration? If there is a valuable asset (debtor) held by 5088 then how could Chico apply to have 5088 struck off.

    Lots of unanswered questions here, but SEVCO 5088 looks to have a Stonewall case. Put your money on googly eyes.

    • OldFirm 1

      I disagree Kenny. I also had sufficient time on my hands to appraise the Merchant Legal LLP position statement, but if CG bought assets using Sevco Scotland directly, then CW can whistle Dixie. CW. as an individual banned from taking any office in Scottish Football, could not legitimately bid for the assets with a view to forming a club. CG could state that he was compelled to create Sevco Scotland to avoid CW’s illegal enterprise. Others might argue that Sevco Scotland was a company vehicle than not only duped CW but also circumvented the floating charge held by his father.

      • Thats just inaccurate.

        Firstly, the SFA have no authority to prevent Craig Whyte acquiring the assets of Oldco and forming a Newco. They could prevent Newco from being licensed if Whyte is an officer of Newco – although he doesn’t necessarily need to be and would have been acting through proxies in this case.

        Secondly, if Green has used Sevco Scotland directly he can only have done so illegaly if the advice of merchant legal is correct.

  6. KnowTheStruth

    listen to De.Niall…..he puts wee pre planned TIT-bits out there hoping someone will bite so he can jump all over them….pmsl….so predictable…

  7. KnowTheStruth

    listen to De.Niall. he puts wee pre planned bits out there hoping someone will bite so as he can jump all over them…pmsl…so predictable…

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