Since 13th February, when Rangers lodged with the Court of Session their notice of intention to appoint an administrator, there has been a flurry of activity, often too much for a humble blogger to keep up with!
One thing I initially missed was the publication of the Notice of Appointment of the Administrators.
It can be found here.
The Administrators, Messrs Whitehouse and Clark from Duff and Phelps (and who I will refer to as “D&P” from now on) have now a part on the front page of the Rangers website linking to a page where formal notices, like this, can be found.
We know that Mr Whyte has an unfortunate history with official paperwork, as highlighted by his various different addresses, names and dates of birth in Companies House, for example.
There could be various pitfalls, some of which are as follows.
Have the statutory requirements in Schedule B1 been fulfilled?
Was the floating charge holder notified in time?
Did the floating charge holder consent?
Who is the floating charge holder?
Have there been valid board meetings to appoint the administrators?
How does the declaration of being unable to pay debts tie in with issues of “wrongful trading”?
What if D&P are not validly appointed?
Has Mr Whyte has his name and address correctly recorded?
What happens if the information given to D&P pre-appointment was wrong?
However, I am sure that all will be in order with this one – shall we look and see?
The Notice of Appointment by the Directors
What we are looking at is pages 2 and 3, being the “application form”. The relevant sections of the application are as noted below.
Paragraph 1 indicates that the appointment is by the “directors of the company” rather than by “the company”. Either the directors or the company can appoint an administrator under Schedule B1 of the Insolvency Act 1986.
Messrs Whitehouse and Clark of D&P are named as administrators.
Paragraph 5 states that the appointment is in accordance with the rules of Schedule B1.
Paragraph 9 states that the appointor has given “at least five business days’ written notice of the intention to appoint…and that a copy of that notice was lodged in the Court of Session on 13 February 2012”.
Paragraph 10 states “I(e)Craig Thomas Whyte of 4 Bedford Row, London WC1R 4DF director, for and on behalf of the directors of the Company do solemnly and sincerely declare that – (i) the information provided in this notice; and (ii) the statement made and information given in the notice of intention to appoint, are, and remain, to the best of my knowledge and belief, true.”
The whole notice is stated to be made “conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1835.”
Finally the declaration is made by Mr Whyte on 14th February, and was lodged at the court at 14.45 that day.
Where Might There Be Problems?
I have detailed the full requirements at the bottom of the article regarding Schedule B1 but, read short, they are as follows.
Schedule B1 Requirements
A company or the directors can appoint an administrator if there is no winding up or administration petition pending; there is no administrative receiver in place; and at least five business days’ written notice has been given to any floating charge holder.
In addition, a notice of intention to appoint and administrator needs to be lodged with the court along with a sworn declaration that the company cannot pay its debts, or is unlikely to be able to do so.
The appointment cannot be granted unless the five business day’s notice is given, or the floating charge holder has consented in writing.
The “appointor” must lodge with a court a sworn declaration that the facts as in the earlier notice remain the same as at time of application.
Notice to the Floating Charge Holder
Therefore, to be valid, Rangers must have given written notice to the floating charge holder of the intention to appoint an administrator by Monday 6th February at the latest, or else the floating charge holder was prevailed upon to provide consent to the appointment within the five day period.
As there seems to be some public mystery about who holds the benefit of the floating charge, it should be simple to ascertain this.
The administrators must know on whom notice was served, and if within the five days, who consented to the appointment. Was it Rangers FC Group Ltd? Was it Ticketus? Was it Liberty Capital Ltd?
Maybe someone could ask D&P for confirmation.
Presumably the floating charge holder is not a body independent of Mr Whyte, as it is likely that, in those circumstances, it would seek to appoint its own administrator, or else, due to this being a pre-2003 floating charge, its own receiver.
As one of the duties of an administrator is, in the absence of a rescue as a going concern or settlement of all the debts, is to satisfy the security holder, then there would be much less to lose should the floating charge holder be linked to Mr Whyte. Continue reading