World Exclusive! – Ticketus Try to Liquidate Craig Whyte’s Main Company, Liberty Capital

I have commented on matters of Scots law, as per the name of the blog, and English law. But, so far, I have not mentioned the law applicable to the British Virgin Islands.

But that changes today!

Ticketus, who successfully won a court order against Craig Whyte, have now applied for the liquidation of Liberty Capital Ltd, the BVI company which owned 100% of Wavetower Ltd which was the vehicle used to effect Mr Whyte’s purchase of 85% of the shares of Rangers Football Club PLC (oldco) which was in turn as we must now know it, the company which formerly owned the assets and business of Rangers Football Club (whew).

Legal Framework the for Winding Up of the ex-Rangers Football Club PLC

In light of last night’s Mark Daly revelations about Mr Whyte recording David Grier of D&P making allegedly incriminating admissions, I wanted to list the rules and regs and procedures to be followed regarding the liquidation process.

I hope this might be of some assistance!

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The starting point was the “virtual” creditors’ meeting on 12^th October. The creditors were to vote on two resolutions, the terms of which are noted below.

From Duff and Phelps’ Final Report to Creditors (accessible via Rangers.co.uk)

15. Resolutions

The following resolutions are proposed by the Joint Administrators and should be voted upon using the form at Appendix 8.

RESOLUTION (1)

15.1 That the Creditors approve the remuneration, expenses and outlays of the Joint Administrators in respect of all accounting periods not previously approved, being, in respect of remuneration only, £2,930,644 for the period 14 February 2012 to 29 June 2012 and £191,039 for the period 10 August 2012 to 14 September 2012.

RESOLUTION (2)

15.2 Without prejudice and subject to (i) the statutory priority in respect of the Joint Administrators’ remuneration and expenses under paragraph 99 of Schedule B1 of the Insolvency Act 1986, and (ii) the determination of any appeal or application by the Joint Administrators to the Court under the Insolvency (Scotland) Rules 1986 for determination of their remuneration and fees to the extent that these have not been agreed by the Creditors;

(1) that the Joint Administrators do make an immediate application to the Court seeking the discharge of the Administration Order in accordance with paragraph 79 of Schedule B1 to the Insolvency Act 1986, and;

(2) to seek the winding up of the Company in accordance with section 124 of the Insolvency Act 1986.

A Liquidator Speaks on Why a Business Would be Shut Down and Assets Sold Off

Joint liquidator, David Menzies, said: “This was a successful business in the past, and without the debt that the firm has built up, and the right management skills to run the firm, it could again be viable, but unfortunately in this economic climate it is more likely that the property will be acquired on its own rather than the business as a whole.”

“A financially-stricken institution and … an amount of toxicity in there” – Any Bidders?

Paul Clark, administrator of Rangers, came out with a Gerald Ratner-esque line yesterday in an attempt to encourage the prospective bidders for Rangers in advance of the next “final deadline” for bids.

He was quoted in the Scotland on Sunday saying:-

“The preferred option remains a CVA and it remains an option for all of the bidders. And we still think it’s achievable and we’re still recommending that as the preferred course of action to the bidders. We must accept, though, that we have in Rangers a financially-stricken institution and there is an amount of toxicity in there as a result of what’s gone on.

“So all of the options have to remain open and it may be that some of the bidders decide that they would rather start afresh. We cannot rule out the winning bid could prefer a different structure that meant the sale of the business to a new company and, in that eventuality, it is certainly possible that Rangers would be liquidated. But it would only be done so after the football club was made safe.“

Whilst attempting to sell the club, it was an interesting turn of phrase. One hopes for the sake of the creditors it does not have the same effect as Mr Ratner’s comments did so long ago!

 

Mr Paul Murray, the Arthur to the Blue Knights, took exception to the mention of liquidation.

“It seems the other groups are pushing to put the club into liquidation. That is not what I want to do. They have their own reasons for wanting that – but it’s not part of my plan.

“Paul Clark was misquoting me if he said I was considering that. I didn’t say that. I’m a little bit surprised and concerned, in fact, that the administrators seem to be almost moving things towards liquidation in the last couple of days.

“From my point of view, first and foremost, we want to reach agreement with creditors – a CVA.

“That’s the whole reason I’m talking to Ticketus. Those talks are ongoing and we’re getting closer, although it’s not done yet.

“I’m trying to put in place a restructuring deal that involves a CVA. I think the football and financial benefits of that outweigh the liquidation option.

“So I don’t know why Paul Clark seems to be briefing in that direction. It is certainly not my intention to put the club into liquidation.”

 

Quite how Mr Murray plans (a) to reach an agreement with Ticketus (b) reach an agreement with HMRC and (c) deal with all of Rangers’ other financial and regulatory issues, including the unfortunate fact that the 85% owner does not want to sell to Mr Murray’s group, remains to be seen.