Does Rangers‘ Craig Whyte Spend More Time With Lawyers Than With His Manager? January Update – Part 1 – Rangers’ Court Actions

 

A friend recently suggested to me, I think in jest, that Craig Whyte has single-handedly decided that the British legal profession needed an economic boost, and as such has decided to try to spend as much money as possible on lawyers.

Most businesses, even very public ones, operate “under the radar” to the extent that their day to day dealings are not pored over in minute detail in the press, nor do any blogs set up to focus on such issues achieve wide circulation.

However, as a result of work by Phil Mac Giolla Bhain and the Rangers Tax Case Blog, amongst others, the dealings of “one of Scotland’s two most important institutions” (©many Rangers fans) have been laid bare.

Normally, in an organisation the size of Rangers, court actions would be dealt with at different levels in the organisation, but the suggestion has been made that Mr Whyte very closely controls all of the dealings there, and is “hands on” as Chairman in a way the previous ones were not.

I thought therefore it might be useful to compile a quick (my reader will be dubious that anything I write will be quick, but here goes!) and straightforward (ditto) guide to what issues will be occupying Mr Whyte when he ventures into the plush offices of Glasgow and Edinburgh solicitors, and when he speaks to Mr Withey, his Company Secretary, and highly-regarded partner of London City firm Collyer Bristow. Mr Whyte very wisely realised that having a lawyer “in house”, for at least some of the time anyway, is a very useful and speedy way of getting legal help.

(I have written about many of these matters previously. If you want to see more, click on the relevant topic or tag on the right of the page, or use the Search box at the top.)

So – Part 1 deals with court actions.

Court Actions Involving the Rangers Football Club PLC (Rangers FC)

Martin Bain

Mr Bain’s claim against Rangers for his dismissal is scheduled for a proof hearing over a number of days in July. He claims that Mr Whyte’s actions in suspending him and, whilst under suspension telling the press that Mr Bain would not be returning to Ibrox was such a fundamental breach of the employer/employee relationship that he, Mr Bain, had had his contract terminated. Mr Bain succeeded in arresting almost £500,000 towards the claim.

Rangers announced in court that they would be pursuing a counterclaim against Mr Bain but, as yet, there has been no confirmation of the detail of that.

Mr Whyte, in previous interviews, made it clear that he did not see why he should be paying people like Messrs Bain and McIntyre (more of whom below). However it is up to the court, rather than to Mr Whyte!

As far as ongoing procedures go, it is likely that the case will pop up every now and then between now and July to deal with procedural issues. There is one such hearing fixed for today (17^th January) which is listed for a 15 minute court slot. This might only be a timetabling matter, or in connection with documents or witnesses.

Some suggestions were made that it could relate to a settlement, but that is unlikely. If terms have been agreed then this can be dealt with by both sets of lawyers submitting papers to the Court, without the need, at this stage, for anyone to appear.

If, as has been suggested, the case against Mr Bain seeks to allege that he was at fault in how he carried out his duties as Chief Executive of Rangers, then, if I acted for hi, I would look to being witnesses to court who clearly rated him very highly. Amongst these would be the Chairmen under whom he worked at Ibrox – Messrs Murray, McClelland and Johnston.

Of course the tax appeal concerning Employee Benefit Trusts presently proceeding in Edinburgh (more of which in Part 3) might alter the perspective here. Should there be findings critical of Mr Bain, for example, (and I have no information to suggest that any such adverse finding will be made, nor indeed if there has been any criticism of his actions at all) the timetable for a decision by the Tribunal would allow Rangers to incorporate such negative comment into their case, as long as it was legally relevant to the case brought by Mr Bain, or the counterclaim pursued by Rangers.

Whichever way it goes, the prospect of a full hearing regarding these matters, including possible reference to anything unearthed by the Independent Board Committee of Rangers during Mr Whyte’s takeover, would be embarrassing for all concerned, but as Mr Whyte is far more in the public eye than Mr Bain now, the negative publicity will affect Rangers far more.

It is a fool’s game to speculate about the outcome of a court case without all the facts being available, but, as the song goes, “fools rush in”.

On a commercial basis, taking account of the PR aspects and the fact that, if the case goes to proof the run up to season 2012-2013 will be dominated by coverage of it, little of which will show Rangers FC in a good light, it would be better for all parties to reach a settlement. However there appears, from what Mr Whyte has said, to be some element of personal animosity here (and if there is not, then I apologise to him). In that case, and depending on the strength of the counterclaim, Rangers might decide that a stand must be taken.

The costs of a proof in the Court of Session, which, I think is down for 8 days, will run into many thousands of pounds for each side. There are a lot of very important financial decisions to be taken by both parties.

Why ought Mr Bain to settle? There is one simple reason. If Rangers enter insolvency, then he might end up, even if successful, receiving little or nothing.

Some have argued that Rangers tactic with HMRC regarding tax should be to tell the taxman that, if HMRC push for full payment, then the company would enter administration or receivership, by which method they would get little or nothing.

HMRC do not do deals on that basis. However, for any private litigant, that is a very relevant consideration.

Therefore, for all those reasons, I would expect the case to settle, for a sum far less than what Mr Bain was suing for. It would not surprise me to find that such a settlement, including payment of Mr Bain’s costs, came very close to the sums he successfully arrested in the late summer of 2011.
Capita Trustee Services Ltd

This one seems to be resolved and off the books. Rangers paid up, under threat, it appears, of a further arrestment being served on them, but not until there had been adverse media comment about another case being raised against them.

Levy & McRae

This was one of the first cases brought against the new regime at Ibrox. Levy & McRae had done sterling work over many years for Rangers, dealing with the “fire fighting” activities, such as UEFA disciplinary hearings and players being arrested for alleged misdemeanours.

However, as a result, it seemed, of the close relationship between the form and the outgoing Board at Rangers, Mr Whyte dispensed with their services when he took charge.

This freed them up to take instructions from Mr Bain, and to act for him against Rangers.This case dragged out, until settlement was finally made, with the court being told that the bill for £35,000 for saving Rangers from a ban for sectarian singing needed to be checked. Of course Mr Whyte later admitted to Scotland on Sunday that he had delayed payment because he was annoyed at Levy & McRae taking Mr Bain as a client against them.However, Levy & McRae are excellent lawyers, and as such were able to ensure that they were paid, in full, and with expenses paid by Rangers.

Donald McIntyre

Mr McIntyre was the Finance Director of Rangers. He too was suspended, but remained on the books at Ibrox far longer than Mr Bain.However, he took the same route of resigning and claiming that his contract had been broken by Rangers. As mentioned above, Mr Whyte was adamant that he did not wish to pay either of these gentlemen.

Presumably he had a change of heart as, after an arrestment was successful for some, if not all, of Mr McIntyre’s claim, a settlement was agreed.

It is thought that payment was made by way of release of some, or all, of the arrested funds to him. It would appear that Mr McIntyre’s case settled in a similar way to that I would predict for Mr Bain, although there was no suggestion of there being a counterclaim against Mr McIntyre.

CRE8 Publishing

As I wrote at the above link, this is a case Rangers is pursuing in the Court of Session.However the defender is in liquidation. A former director of CRE8 is Lee Power, who played 25 games for Dundee, Hibs and Ayr from 1996 to 1998.

According to the Drum Magazine, Rangers were owed almost £500,000 by CRE8 when it went into liquidation.

The Weather Lottery PLC

This case, where Rangers is the Pursuer, calls again at Glasgow Sheriff Court on Friday 20^th January.
The defender is a company specialising in providing lottery services to football clubs. It describes itself on its website as “The leading lottery fundraiser in the UK. Helping to raise funds for Charities, Education, Sports organisations and other societies. “

It is however, according to its last accounts, a loss making company whose current liabilities to trade creditors doubled in the last accounts.Yuill and Kyle act for Rangers. This is a leading debt recovery firm and one assumes that this is a simple non-payment action brought by Rangers.

Court Actions Involving Rangers FC Group Ltd

Fyfe Ireland

This might almost be the most embarrassing of the cases. Here the parent company was sued in a Small Claim (meaning an action for £3,000 or less) for non-payment.

Fyfe Ireland, it is understood, acted for the former Wavetower Ltd in the takeover. The type of work they did in connection with a PLC acquisition would normally cost in excess of £50,000.

It seemed daft to allow further reputational damage, and to give more ammunition to critics, by disputing the final part of a bill, especially where, in a dispute about legal fees, there are methods of having the bill independently assessed by the Auditor of Court to determine what truly should be paid.

That case settled at an early stage.

Rumoured or Possible Court Actions That Have Not Been Raised

Alastair Johnston

Mr Whyte, in his Scotland on Sunday interview in October with Tom English, stated that Mr Johnston, the former Chairman, had demanded payment of expenses in connection with his work for Rangers.

Mr Whyte made it clear in the interview that he viewed this as inappropriate. He was not for paying, and seemed almost to be urging Mr Johnston to take action.

As far as has been made public, no such action has been raised. There is no information as to whether or not the expenses were paid.

As with Levy & McRae and Mr Bain, Mr Johnston seems to have become persona non grata for his involvement before, and particularly for his Committee’s opposition to the takeover.

However, I would suspect that, for all Mr Whyte’s desire for positive PR (as undoubtedly defending such an action would have brought him amongst many of the club’s supporters), the rules regarding expenses for directors conducting club business would be so clear cut that there might not even have been the fig leaf of a defence to hide behind. A defender cannot tell their lawyer “I have no defence, but just say I do, and drag the case out”. More accurately, if the client says that, the lawyer has to say “No” unless there are areas where legitimate enquiries can be undertaken to establish the position.

As I speculate above though, there remains the possibility of Messrs Whyte and Johnston facing each other across a crowded courtroom in the Bain case.

John McClelland

When this former Chairman resigned in October, there was a brief flurry of speculation that he too was going to law.

That quickly died down and it was never clear, in any event, what the cause of action might have been.

It is possible that his resignation, at the same time as that of Rangers legend John Greig, was an attempt to distance themselves from legal responsibilities of Directors (as noted in Part 4 to follow).

If they were being kept out of the loop by Mr Whyte, as they alleged, then why stay and risk criminal penalties for alleged failures they could do nothing about?

To follow –Part 2 – Craig Whyte’s Personal and non-Rangers litigation

Part 3 – The Tax Cases

Part 4 – Companies House and the PLUS Exchange

Part 5 – The Rest – SFA/SPL (and anything else I have forgotten)

As Christmas Approaches, A Few Questions Regarding Craig Whyte and Rangers

 

 

The saga of the takeover of Rangers Football Club PLC by Wavetower Ltd (now Rangers FC Group Ltd), the company controlled by Craig Whyte, has run and run.

As the most recent post on the Rangers Tax Case blog put it, it is now no longer news to hear that Rangers or Mr Whyte is involved in litigation in relation to allegedly unpaid bills.

I thought it might be useful to list a few of the questions which remain extant. I don’t come up with many answers, and I am sure wiser folk than me can make the necessary connections and deductions.

 

Craig Whyte v the BBC

Following on from the BBC Inside Story programme, Mr Whyte made it clear that he was going to pursue the matter through the courts, both against the BBC and indeed against the official from the Insolvency Service who appeared in the programme to discuss the allegations against Mr Whyte.

Carter-Ruck, the famed London libel lawyers, were quickly brought in to advise both Mr Whyte and Rangers. However, in the two months which have gone by, it does not appear that the case has yet been raised.

A few weeks ago, there was a flurry of press comment to the effect that Bannatyne, Kirkwood and France of Glasgow were now instructed as Carter-Ruck could not raise proceedings directly in Scotland.

I have repeated ad nauseam that, in Mr Whyte’s shoes, and if I was determined to sue for libel/defamation, I would initiate proceedings in the High Court in London. There are many reasons for doing so, and comparatively few for choosing to go to law in the Court of Session in a case such as this where both jurisdictions are applicable.

The BBC programme was carefully crafted. The most serious allegations either came from public records or from court paperwork. For example, the suggestion, vigorously denied by Mr Whyte, that he had acted as a director when disqualified from doing so, arose for court papers prepared in connection with the winding up of Re-Tex.

As I have mentioned before, there is not an absolute privilege when reporting court matters from the past, but malice requires to be proved. It is extraordinarily difficult to establish malice in the legal sense, short of an admission by the allegedly malicious party!

However, in the last few days, RangersTaxCase himself mentioned in a comment that he expected Mr Whyte to go ahead with the action.

Nothing else concrete appears to have arisen in this regard.

It may be that the purpose of raising an action would be to try to stifle comment on the matters at issue. Media organisations would be reluctant to delve too deeply into matters that were already the subject of litigation, in case the BBC turned out to be wrong, and other parties were found liable on the BBC’s coat tails. I would not expect Mr Whyte to announce that he is no longer going to sue the BBC, so until there is word about proceedings, I suppose we simply have to wait and see.

 

The wee tax bill

HMRC had successfully arrested around £2.3 million of a bill due in relation to Discounted Option Schemes operated by Rangers. This sum was part of a liability which had been accepted by Rangers, and indeed by Mr Whyte on the takeover. However, the bill was not paid, and Sheriff Officers were dispatched by HMRC to serve a charge for payment and then an arrestment.

The arrestment succeeded and the sum mentioned above was frozen.

Under the law as it now exists, if the funds remain frozen for 14 weeks, they are automatically remitted to the arresting creditor, in this case HMRC. It seemed hard to work out why, once the funds were arrested, they were not simply handed over to HMRC by Rangers. After all, they would not be coming back into Rangers hands.

Then, just before the transfer was due to take place a couple of weeks ago, there was a flurry of speculation that this formerly agreed tax bill was now to be appealed, and that steps would be taken to prevent the handover.

In the event that Rangers suffered an Insolvency Event, the arrested funds might come back into the pot for the secured creditor, namely Wavetower under its floating charge.

Normally any appeal so late would be doomed to fail. However, an application could have been made to Glasgow Sheriff Court to object to the arrestment (a) on the ground that there was some defect in its application or (b) that the arrestment was unduly harsh on the debtor.

In either case, there would not be any need for an initial hearing, but instead the matter would come before the court, probably in January, for argument. Until then the funds would remain arrested but not passed over to HMRC.

If the funds had been transferred, I would have thought that there would have been some spin to suggest that this was a liability Rangers were meeting, as the impression is being created that they do not do so, or at least timeously.

On the other hand, as the lodging of the application to object to the arrestment does not result in an initial hearing, it may well be the case that this had happened and that the court, as would be expected, has kept the matter confidential until the point next year when the case is listed on the court rolls.

As with the BBC case however, the lack of information leads to varying degrees of speculation.

 

The big tax case

This seems simpler (hah!). The First Tier Tribunal (Tax) is due to reconvene for three days on 16^th January. It is hoped that the case will conclude during that period. Once that happens, it might take two or three months for the Tribunal to issue its decision.

Thereafter the losing party can appeal to the Upper Tribunal, and thence to the courts.

Very recently there have been suggestions made that in fact Rangers are about to “cut a deal” to pay around £5 million to settle this claim which, with interest and penalties, is believed to total around £49 million.

Mr Whyte is rumoured personally to be meeting HMRC officials in London to batter out a settlement.

Whilst that is not impossible, I would class it as highly unlikely. There is really no incentive for HMRC to reach a deal with Rangers here. Some have suggested that, should Rangers enter insolvency, the fact that Wavetower’s floating charge would eat up most, if not all, of the assets, means that HMRC has to strike a deal or else it would get nothing.

However, HMRC does not work as a normal commercial creditor. It emphasis the “moral hazard” caused by people who are unable or unwilling to pay their full liabilities. If HMRC is seen as letting taxpayers escape their full liabilities on the grounds that, if insolvent, HMRC might get nothing, then we would see a spate of these situations. HMRC is quite clear in its guidelines. It will not, except for extraordinary circumstances, accept the clearance of a debt to take over one year, and to enter into such an agreement they would require to be satisfied of the taxpayer’s full co-operation.

It does not appear that such co-operation has been forthcoming from Rangers over recent months, and they may, and I emphasis may, fall into the category of wilful no-payers. HMRC has no incentive to deal favourably with such parties, no matter how august an organisation they represent.

It remains the position, as acknowledged by Mr Whyte, that if a substantial finding goes against Rangers at the FTT (T), then some form of insolvency is almost inevitable. However, that might not hit now till near, or at, the end of this season.

 

Will Rangers Run out of Money, and Will They Sell Players to Keep the Doors Open?

There has been speculation about the state of Rangers bank balance for some time now. It was suggested that, in fact, they were running out of money a couple of months ago. Mr Whyte has not made public the present position of the Club financially, and so the guesswork continues.

It may be that a “firesale” of players will take place in January to generate cash, either to keep the club running till the end of the season, or to “fatten the calf” in advance of Mr Whyte appointing a receiver to get him Wavetower’s money back.

It would confound the pundits I there was not such a sale, although any sale of a player is dependent on there being a willing buyer and also the player himself being prepared to agree terms.

As has been seen recently with Hearts, where players are not paid (and if the club enters an Insolvency situation) the players can be come free agents. In such a case there would be no need for a transfer fee, and the signing on payment to the player would likely be much higher. Players, and their agents, will be gauging how likely Rangers is to make it to the end of the transfer window and then till the end of the season.

If Rangers start selling at the start of the window, this would be a clear sign that the sales were forced, and not voluntary.

 

The Audited Accounts and Annual General Meeting

Mr Whyte met the Rangers Supporters Trust in October. He told them that both the accounts and the AGM were on schedule.

The audited accounts were due by the end of the year, and company law required Rangers to hold their AGM by 31sdt December. As a result of the notice requirements, they could not now validly hold the AGM this year anyway.

Rangers, through Mr Whyte, released a statement to the effect that the AGM was being postponed as the tax case was due to resume in January, and Mr Whyte wanted to come to the meeting with more concrete news. However, that is not a valid reason for failing to hold an AGM!

Failure to do so is a criminal offence. Will the Directors of Rangers be prosecuted for this failure?

Press coverage of the matter seems non-existent over the last week or so. One can only imagine the furore if any other prominent SPL team produced unaudited accounts (without any real explanation as to why) and refused to hold an AGM.

On the back of the allegation that Rangers have not held a board meeting since the takeover, this seems consistent with what has gone before, and the rumours that all decision making at Ibrox is now in the hands of the triumvirate of Craig Whyte, Gary Withey and Ali Russell, and that all information is totally locked down, it seems that a policy decision has been taken to allow as little light as possible to be shed on Rangers’ affairs, at least till the tax case concludes.

It should be of concern to the football authorities that Rangers appear to be flouting their obligations in this regard.

 

Talking of the Football Authorities

When, five weeks after the BBC programme alleged that Mr Whyte had been disqualified from being a company director, Rangers confirmed this to the PLUS Stock Exchange, this prompted the SFA/SPL to make enquiries. The question was raised as to whether or not Mr Whyte remained a “fit and proper person” to have his role in a football club. It is understood that Rangers have not yet responded to the queries raised.

Bearing in mind the imminent holiday period, can we expect Rangers to reply before 2012? I doubt it. The football authorities cannot look into matters till Rangers reply. It must surely be coincidental that such a delay would appear to suit Rangers apparent proposes just now.

 

Court Cases

Mr Bain will go to court for his full hearing in July 2012, if Rangers still exists as an entity.

Mr McIntyre was supposed to have settled his case. It remains to be seen if settlement has been effected. If not, expect this case to be back before a judge imminently, to thrash out the disputed terms, if any.

The case involving Tixway, owned by Mr Whyte, is due to continue on a date to be fixed. Mr Whyte was cross examined by the other party’s QC. Mr Whyte told the court he could not remember, without paperwork in front of him, why he had been disqualified as a director. He was asked if it was for trading whilst insolvent. He could not answer.

Bearing in mind that he previously described the seven year ban as for a “technicality” it is a pity that he has become, in the intervening period, so forgetful.

 

What Will Happen to Rangers

This is the $64 million question!

There are as may theories as there are football teams in Scotland as to Mr Whyte’s plans and motivations.

I, as a simple man, have always tended to the simple explanation.

Here is a man who has a history of involvement in distressed companies and who gets involve in them to make a profit by asset stripping, or by rescuing the company and selling it on.

Rangers, with the debt to HMRC looming, and with the “black hole” described by Mr Whyte, is a distressed company.

Repeatedly in interviews Mr Whyte has commented that he has been shocked at the amount of scrutiny he and his activities have received. If it had not been for the early exit from European competition, he would have had a decent nest egg to keep the Club going either till it traded out of difficulties or, more likely, when it lost the FTT (T) thus allowing Mr Whyte to appoint his receiver.

However, fate intervened and the European cash expected failed to materialise. Since then it seems every penny, even bills admitted to be due, is watched like a hawk, and not paid till the last minute.

As to what will happen…. I have no idea, though I suspect that HMRC might be back knocking on the door very soon.

 

 

 

 

Surprise, Surprise – Rangers Settle a Case on the Steps of the Court with Mr McIntyre

From the BBC

“Rangers FC has reached an out-of-court settlement with former finance director Donald McIntyre, who was suing the club over alleged breach of contract.

Mr McIntyre won a legal bid in October to have £300,000 of the club’s assets frozen pending the outcome of his case.

When the matter called again at the Court of Session in Edinburgh, judge Lord Hodge was told that both parties had reached agreement.

The terms of the settlement of the action were not disclosed.”

This was the man who was one of those who had the cheek to sue Rangers and against whom Mr Whyte was pledged to fight…

More later

 

 

The Travails of Craig Whyte – At Glasgow Sheriff Court on Monday? + Question re Director’s Disqualification

Little did I realise when I first penned a few words regarding the legal issues surrounding Craig Whyte, the Motherwell-born Billionaire, and his purchase of Rangers, that still, months later, there would be new matters to write about. Today presents the choice of (a) his decision not to hold an AGM within the statutory time limit as, according to the Sun, he does not have good news to tell the shareholders, (b) the failure to produce audited accounts, as they won’t present good news or (c) the hearing due tomorrow at the Court of Session in Edinburgh where we should hear more details of the case brought by Donald McIntyre against Rangers.

However, this missive will move to the west and to Glasgow Sheriff Court on Monday.

Listed in the court roll is the innocuously titled case of One Stop Roofing Supplies Ltd v Tixway UK Ltd. The case is scheduled for a Proof Before Answer before Sheriff Ross, who is one of the designated Sheriffs dealing with Commercial Court actions at Glasgow Sheriff Court.

(A Proof Before Answer is a hearing on the evidence and facts which is necessary before legal arguments are heard.)

What has this to do with Rangers or Mr Whyte, you might ask?

Well, nothing to do with Rangers directly, but a lot to do with Mr Whyte! There are two matters worth noting, I think – one about this case and one about the company.

The company issue might lead someone of a suspicious or cynical bent to suspect that Mr Whyte was acting as a shadow director whilst disqualified. That would clearly be an entirely inappropriate accusation, as I will discuss below.

 

What is Noteworthy About Tixway UK Ltd?

It was incorporated on 16^th January 2007, and has its Registered Office at 3^rd Floor, 65 Bath Street, Glasgow. This is also an address of Liberty Capital, which owns Rangers FC Group Ltd, and is owned ultimately by Mr Whyte, we are led to believe.

Tixway UK Ltd has a trading address. It is a castle in Morayshire. That is apparently tied in to the court action as the building materials, the supply of which is at the root of this action, are rumoured to have been for work on the castle, it being Mr Whyte’s home.

In each of the last two years dissolution notices have gone into the Edinburgh Gazette for this company on the basis that, each time, the Annual Return has been late. On each occasion the striking off has been cancelled when, belatedly, the Return has made it to Companies House.

Clearly, as with the delayed Annual Return for Rangers, this must be an administrative problem caused by someone being on holiday, or by one of the various Directors ignoring their responsibilities, and therefore nothing that could be held against Mr Whyte. No one would dare suggest that he has a cavalier attitude to Company Law.

So who are, and were, the Directors of this company?

When the company formed, the listed Director was “The Company Warehouse”. This company is involved in assisting clients to set up a limited company and is appointed as the Director initially, stepping down when the true owner is in position to takeover. The other Director was Kim Whyte.

On 3^rd March 2008 Liberty Corporate Ltd took over as Company Secretary, and remains in that post today. On 5^th May 2008 Kim Whyte resigned as a director and was replaced by Craig Whyte.  Unless I am very much mistaken (as Murray Walker might have said), Kim Whyte is Craig’s now estranged wife.

We now know, after Mr Whyte’s belated confirmation that he was disqualified from being a company director in the UK on 13 June 2000 for a period of 7 years. Therefore he could neither be a company director, nor a shadow director, until 13 June 2007. By that date Tixway UK Ltd had been up and running for almost five months. As we will see from the figures below, at the first year end in January 2008, the company had made a flying start. I am sure that Mr Whyte was fully cognisant of his responsibilities in terms of his disqualification, even though, as he has explained, this was simply for a “technicality”. I would not suggest Mr Whyte ignored or failed to understand the effect of his ban.

I am sure it is simply a coincidence that his wife seems, from the records I have seen, only ever to have been a director of one company, namely this one, and only for the period covering her husband’s disqualification as a director. Clearly the business acumen she exhibited in her short time in charge should have deserved a longer stint in the front line?

 

What is Liberty Corporate Ltd?

This company is the Company Secretary of Tixway UK Ltd. It has its Registered Office at 48 Skylines Village, Limeharbour, London E14 9TS. It is listed as having a trading address of Suite 5, 2^nd Floor, Viking House, Lodge Lane, Danholes Roundabout, Grays RM16 2XE. This company was formed in May 2006 and is listed as non-trading. The only human director is Thomas Whyte, a 64 year old Construction Worker. One wonders of Thomas Whyte could be connected to Craig Whyte. Thomas Whyte is also Director of Tixway Ltd, a non-trading company which has the same Registered Office and trading address as Liberty Corporate Ltd. It always amazes me how a Company can be a company director or secretary. It shows what an amazing invention corporate identity was!

The corporate web behind Mr Whyte’s companies is very interesting, and I will come back to it soon.

 

Back to Monday’s Court Case

The excellent Andy Muirhead of Scotzine.com reported earlier this year on a number of the matters which made up the much later BBC documentary about Mr Whyte. In the same piece, he mentioned this case as well.

“Whyte is being sued over a £90,000 debt. A writ was served by Glasgow-based McRoberts Solicitors on Whyte’s Tixway firm, at the same time as he was in talks about his Rangers takeover.

His company is being sued by One Stop Roofing, run by Albion Rovers manager Paul Martin.

Martin and fellow company director Robert Jenkins claim that Whyte’s firm ordered £90,000 worth of building materials in June 2009, and has failed to maintain a repayment plan which was thrashed out at the start of this year. To date only two payments have been made…

However like his previous debts, Whyte has denied his company owed the money. A spokesman [Mr Whyte] said, “His firm have done business with One Stop Roofing but all bills have been paid in full. Any legal action will be defended robustly.”

Taking what is known of this dispute, it seems quite simple. One Stop Roofing Supplies allege that goods to the value of £90,000 or more were supplied to Tixway UK Ltd. That company has not paid that amount of the bill.

The spokesman quoted above makes it clear that “all bills have been paid in full”.

This seems rather odd. Usually cases like this are defended on the basis that (a) the goods supplied were defective or otherwise not as described (b) that they were never delivered (c) that the bills rendered were excessive and not as contracted or (d) that the goods were not ordered at all. (On the last note be very wary of companies, especially stationery suppliers who ring your office and ask the person who answers the phone if you want your “usual order” delivered. If the person says yes, suddenly you find yourself with 16 toner cartridges for a photocopier which uses one every eight months!)

Here, as I have said, the issue seems to be quite simple.

Mr Whyte’s spokesman says that all the bills have been paid in full. The Pursuers obviously disagree.

The Commercial Court procedure involves the case being allocated at its first stages to one Sheriff whose job it is to guide it to the end, both by encouraging the parties to discuss any issues capable of agreement and by pinning down the respective solicitors to ensure that the position of each party is crystal clear. Sheriff Ross, who is scheduled to hear the Proof, is an excellent Sheriff and if he has been the Sheriff dealing with the matter all the way through, then he will have ensured that the position of each party is stark, and that there is little or no room for wooliness.

One of the normal rules in these cases is that the Sheriff can require each party not just to produce a list of witnesses, but a witness summary, indication what the evidence of each witness is likely to cover.

On assumes, perhaps naively that Mr Whyte, as the only “live” director of Tixway UK Ltd will be a witness for the defender. If so, and the case proceeds, it would be very interesting to see him in a witness box on oath in a case where his position seems to be diametrically opposed to the other party.

Of course his position might be entirely justified and it is the Pursuer who has gone wrong here. That is what Monday’s proceedings are designed to determine.

 

What Do We Know About Tixway UK Ltd’s Finances?

I had thought that perhaps this company might be a non-trading or dormant company. After all, if it was active one would not expect it to have been on the point of being struck off by Companies House in each of the last two years. In addition, as the last accounts lodged with Companies House were for the year to 31^st January 2010 one might expect early next year to see the third consecutive strike off procedure!

The accounts to year end 31^st January 2010 were submitted electronically and bear to be signed by Mr Whyte on 1^st March 2011! On that basis, maybe Rangers accounts will make it to Companies House by August next year!

I was therefore rather surprised to see the last accounts for the company, as these show a company with a healthy financial picture. The company is exempt from having to lodge a Profit and Loss account, and instead gets away with an abbreviated Balance Sheet.

This discloses the following, with the 2008 and 2009 figures for comparison.

2010                                       2009                                       2008

Investments                      £1,103,190                           £750,000                               –

Tangible Fixed Assets                                                                                                        £1,350,000

Debtors                                £923,856                              £385,026                             £288,816

Cash on hand + at bank £479,802                              £385,026                             £109,762

Creditors (over 1 year)  £137,802                              £177,499                              –

Trade Creditors                                                                                                                    £232,946

Total Net Assets               £2,369,046                           £1,825,093                        £1,515,632

 

Called up share capital   £2,001,000                           £1,501.000

Profit + Loss Account      £368,046                              £324,093

Shareholders Funds        £2,369,046                           £1,825,093                        £1,515,632

 

On the face of it, a healthy company, with a lot of money in the bank. Maybe much has changed since January 2010. One wonders what the problem is here. Will this join the long line of cases where Mr Whyte settles at the door of the court?

From the court lists, on the basis that McRoberts represent the Pursuers, Harper MacLeod act for Tixway UK Ltd. If so, they will not be on the point of going to proof unless they have been fully paid for their work. They are a very good firm, and a very efficient one as regards cash flow.

Sadly other commitments prevent me from attending either the Court of Session tomorrow or Glasgow Sheriff Court on Monday. However, these are public courts and maybe Monday’s case will give us a chance to see Mr Whyte being asked hard questions which he has no option but to answer. I am sure he will surprise his sceptics, and silence his doubters, with his composure in the witness box if required.

To be frank, based upon his track record so far, and as befits a man of his financial standing, I would imagine he has much better things to do than to sit in a witness room in Carlton Place on Monday. Surely some settlement will be achieved to avoid him having to do so?

We shall see.

 

 

 

Rangers Have Another Appointment At Court Next Week!

The case of Donald McIntyre, erstwhile Finance Director at Ibox, calls on Friday next week (9th December) for a preliminary hearing.

This is designed to allow the judge, Lord Malcolm, to see how prepared the parties arem, and to give further time for investifation, or else to fix a full hearing.

Unless all the procedural matters are agreed beforehand between the respective lawyers, then it might be worth a trip to the Court of Session next Friday for 9.30 am to see what is going on.

As we see, Mr McIntyre is represented by Messrs HBM Sayers, and Rangers by Anderson Strathern.

If for example Rangers have not lodged defences, then this will be raised before Lord Malcolm on Friday. 

 

Friday 9^th December

 

Preliminary Hearing

At 9.30am

 

1

CA137/11 Donald McIntyre v The Rangers Football Club

HBM Sayers

AndersonStrathern LLP