How Section 216 of the Insolvency Act Could Prevent “The Return of Dave King” to Rangers

We almost seem to be having déjà vu when it comes to Rangers, yet again! A tweet from @Corsica1968 prompted me to have a look at Section 216 of the Insolvency Act 1986.

It looks as if that section would potentially be enough to prevent the involvement of Dave King in Rangers for 5 years from 5^th November 2012 onwards. It would also prevent John Greig, for example, from re-joining the Board.

The section relates to the re-use of a company’s name where it has gone into insolvent liquidation. The mischief the section is designed to stop is that of companies “dying” and leaving its debts with the oldco only to be resurrected a couple of days later as a newco but under the old trading name and with the same directors in charge. It can be legitimate to do so after a process of administration – but not when being “pre-empted” by the directors.

Rangers Myths – Number 326 – “It’s Not Gratuitous Alienation If Assets Sold By Insolvency Practitioner” – Wrong!

Regular readers will know that I believe there is a very strong case to say that the sale of assets of Rangers Football Club to Sevco (insert precise Sevco entity here) in June 2012 was not for full value.

That is NOT to say that anything illegal, criminal or underhand happened. Rather Mr Green managed to secure assets worth many millions of pounds for only £5.5 million. Despite his fall from grace, he is still up for Businessman of the Year, at least in my eyes!

It is my view that, subject of course to the detailed investigations carried out by the liquidators BDO, there is a strong case for asking the purchaser of the assets to prove that an adequate consideration was paid. As readers who can recall my previous posts on this topic will know, it is not for the liquidator to show that the price was too low, but for the buyer to show it was adequate. In addition, it is not necessarily the case that the best price received after a marketing process would be “adequate” in all the circumstances.

Mr Whyte, Mr Green, Sevco 5088, Sevco Scotland and Prospectus Risk Factors

In which I comment on:-

• the return to the fray of Craig Whyte,
• the confusing issue of whether Sevco Scotland Ltd (which was not a party to the sale agreement) or Sevco 5088 Ltd (which was) acquired the assets directly from Duff and Phelps,
• whether Mr Whyte’s challenge ought to have been mentioned as a “risk factor” in the Prospectus,
• whether Mr Whyte’s allegations might provoke BDO into further and more immediate action and
• whether his involvement, if established, bolsters or weakens any case of alleged “gratuitous alienation”.

Compare and Contrast – Administration for Dunfermline ’13 and Rangers ’12 + A Quick Solution?

Dunfermline Athletic Football Club Limited has entered administration. Facing a winding-up petition from HMRC, and unable to pay the taxman what was demanded, the only way to keep the business afloat was to appoint an administrator and to hope that the breathing space this gives the company will be enough to allow the season to be finished, and then for the necessary asset sale or CVA to take place to preserve the existence of the football club. As I mention at the end of this piece, there is one theoretical possibility which could provide a quick exit from administration, with bounty for the creditors (and if it did happen, undoubtedly a busy summer of blogging on my favourite issues of law and football!)

The man picked to be administrator is Bryan Jackson. As well as being a top quality Chartered Accountant and Insolvency Practitioner, he now has the accolade of having run more Scottish football teams than anyone else in the country’s football history (and if not then I have no idea who could surpass him).

Rangers Interim Results – Everyone at Ibrox is Very Happy – What About Asset Revaluation?

A brief note (yes – it will be brief).

Rangers International Football Club PLC’s interim results are out and can be read in full here.

People will pore over them but is seems clear that all is well on the Good Ship Rangers, and that Captain Green, Commodore Murray and First Mate Stockbridge are steering a course as plotted in its business plan and flotation document.

There is one squall on the horizon that I want to mention at this point.

As with weather approaching a vessel on the high seas, it might change course, missing the boat. It might blow itself out before reaching it. It might even turn out to be a smudge on the lookout’s telescope, and not there at all.