Tag Archives: Martin Bain

Legal Update re Rangers, Craig Whyte and the BBC – Will There Be Attempts To Stop Broadcast?

 

Craig Whyte Comments on the Resignations of John Greig and John McClelland

The Rangers website quotes from an interview Craig Whyte has given to the Express regarding the resignation of Messrs Greig and McClelland.

The newly resigned Messrs McClelland and Greig (in happier times)

The piece ends:-

Whyte told the Express: “I very much hope he stays in touch with us and comes to games. He is the greatest ever Ranger and will always be welcome at Ibrox. I also spoke with John McClelland at the weekend and again there was no indication that he was planning to resign. I suppose I shouldn’t be surprised about anything in football anymore but the timing of all this is odd.

I like the line about not being surprised about anything in football any more – after all, he has had an extensive five and a bit month’s involvement! Mind you, that probably is enough time to remove any illusions about the game.

 

Craig Whyte no longer surprised by anything in football

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A Feast of Viewing – Craig Whyte on STV and the BBC Investigation into Rangers on BBC Tonight

The “exclusive” Craig Whyte interview with STV (well exclusive apart from the interviews given elsewhere such as to the Express) will be broadcast just before the BBC programme tonight. The BBC investigation goes out at 7pm on BBC1 Scotland.

It is described by Rangers as appearing “to be little more than a prejudiced muckraking exercise.

We shall see when the programme is shown, but one would imagine that if allegations were being made against Mr Whyte or his associates, that the BBC would have offered him a chance to respond.

The official statement referred to by Rangers continued “Efforts to ensure that reporting of the Club’s affairs should be balanced and fair appear to have been in vain.

This suggests that Rangers took exception to the questions they were asked.

So we will have an interview shown on STV where Mr Whyte will presumably “get his retaliation in first”.

Various commentators have speculated on Mr Whyte’s media strategy. So far his public pronouncements have been used against him and his companies. For example, it was his alleged statement, whilst Mr Bain was suspended, that the now former Chief Executive was never coming back to Ibrox which caused the resignation and consequent constructive dismissal claim.

In addition, Mr Whyte’s comments just before the Bain v Rangers arrestment hearing were taken into account by Lord Hodge in determining the outcome.

The Bain case is due back at the Court of Session tomorrow. One assumes Mr Whyte is well aware of that, and is restrained in what he says as regards the executive who served as right hand man to Sir David Murray, John McClelland and Alastair Johnston in their times as Chairman of the football club.

If anything inappropriate is said, then I am sure that Levy & McRae, who act for Mr Bain, will set their VCR to record it, and reference will be made to it tomorrow before Lord Menzies.

It strikes me that Mr Whyte’s tactics pose a certain risk for him. After all, his interview on STV might prompt people who were unaware of the BBC programme to watch it, or it may pique the interest of those who did not intend to do so.

Roll on this evening!

Mark Daly - presenter of the BBC Inside Story on Rangers

 

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Can Rangers Stop the BBC Programme Being Shown?

Turning to the documentary itself, is there a possibility that Mr Whyte and Rangers might seek to prevent it being shown?

If it was considered that the programme was harmful to Rangers and/or Mr Whyte by being defamatory or libellous, and it was to be argued that the harm caused would not be assuaged by an award of damages at a later date (especially as the threat of insolvency swirls around Ibrox) then a court could be persuaded to interdict or injunct the showing of it.

I use both the Scottish and English terms as the programme, even when broadcast by BBC Scotland, will be available, by satellite or cable for example, in England.

I suspect that the BBC legal teams in both Glasgow and London are waiting for a call from the courts to advise that lawyers acting for Rangers have appeared in either, or indeed both, courts this afternoon seeking an order preventing transmission.

I claim no great knowledge of the English system, but in Scotland, the BBC will have a “caveat” lodged. This means that, if anyone applies to the court for an interim order, such as an interdict, the BBC is entitled to have its say before the order is granted. If there was no caveat, then if Counsel for Rangers appeared at the Court late this afternoon, they would possibly be granted an order banning the programme and the BBC would have no time to challenge it before transmission time. That is why caveats are lodged.

As the programme has been on the schedules for a couple of weeks however, if Rangers want to take such action, then they have to do so in enough time for the BBC to be able to be represented at court today, thus bringing forward their window for taking action.

A preview of later today, as Rangers' solicitor strolls to the court?

In addition, as the programme has been on the books for a couple of weeks, a last minute application to the courts might be seen as an effort to force the court’s hand, and could fail on the grounds that it could have been brought earlier.

Perhaps this explains why Rangers were unrepresented earlier this week when Mr McIntyre’s case against them called – their lawyers are tied up framing the interdict application for today!

One point a judge, if asked to consider the point, might find relevant, is that Mr Whyte is due, as I have mentioned, on STV earlier this evening. A judge, who will have no time to carry out detailed analysis of any allegations Rangers might make (though the reference to prejudiced muck raking suggest that they have some to put forward) might consider that the viewing public can make up its mind about each version, and if a damages action is pursued, the court can, at its leisure, assess the position fully. It would be ironic if Mr Whyte’s scheduled appearance on STV resulted in an interdict being refused!

The courts are reluctant to grant orders prohibiting publication in advance, but the advent of the Human Rights Act and the incorporation onto Scots Law of the European Convention on Human Rights under the Scotland Act have added an extra test for the courts.

The right to privacy enshrined in Article 8 of the ECHR states “Everyone has the right to respect for his private and family life, his home and his correspondence.”

As Max Mosley argued in his case against the News of the World, this right should be taken as paramount, unless the specific factors mentioned in Article 2 as being qualifications, being such measures as are “in accordance with the law and [are] necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others” applied.

If for example Mr Whyte seeks to argue that in some way the BBC is infringing his rights, the argument is that the toothpaste cannot be out back in the tube – once the privacy is breached, then no award of damages can set things right.

Of course, none of this might happen, and the BBC can broadcast the programme unhindered. Alternatively, one of the judges at the Court of Session, or at the High Court in London, will find themselves wrestling with a knotty legal issue when they would rather be going home for their tea!

Perhaps, when the Whyte team got wind of the BBC programme, they could have sought an anonymised injunction in the English courts – I think it is too late for that to happen now however! If the BBC do not show the programme, that can only be because a court has barred them from doing so.

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Will Rangers Face Court Action from the BBC?

A short comment on this just now – a piece in the Sun (and I cannot get the link back up just now – sorry) speculates that the BBC will take Rangers to court in respect of their refusal to co-operate with the broadcaster, announced earlier this week, on the basis that this contravenes the contract with the SPL for media coverage.

Apart from the fact that the Sun piece is hedged with even more qualifications than I put in a piece, I wonder if the BBC has a case against Rangers at all.

Depending on the terms of the contract with the SPL, it might be that the BBC’s case would be against the League, rather than the club. This depends on whether or not the SPL acts as an agent for all its member clubs, in which case a contract is enforceable against the Club, or as an entity itself, where the BBC’s remedy for breach is against the SPL. It would be interesting to know (1) if Rangers consulted with the SPL before taking their action and (2) if the SPL intend to fine Rangers or otherwise penalise them if the club is in breach of its agreement. For example, I understand that the English Premier League fined Manchester United for the refusal of Sir Alex Ferguson to speak to the BBC.

Sir Alex Ferguson calmly explaining why he did not co-operate with the BBC for many years

More thoughts on this to come, perhaps.

 

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18th October – Is the Rangers End-Game Approaching? Bain, McIntyre, Arrestments and HMRC

There is an increasing spiral of activity regarding the finances of Rangers FC Ltd. As discussed before, the courts are being asked to consider issues about Rangers regularly. The BBC is poised to show a documentary about the takeover, and has already discussed the issues on Newsnight Scotland and online. Gerry Braiden in the Herald has written informed and insightful pieces as regards developments.

After lots of hard and interesting work by, inter alia, the Rangers Tax Case Blog and Phil Mac Ghiolla Bhain, the story of the possibly imminent demise of one of the two giants of Scottish football has come into the public eye.

Mr Mac Ghiolla Bhain indeed views his work on this issue as complete – http://www.philmacgiollabhain.ie/job-done/

If some observers are correct, it is not just the crest, but the whole Club poised to shatter

But there are still many twists and turns to go, so I thought I’d try to offer some thoughts re the legal aspects of matters presently arising.

 

McIntyre v Rangers

Why were Rangers not represented today (18th October) at court? Good question! I have various thoughts but it cannot be as simple as them having run out of money to pay their lawyers, can it? If that is the case, then there would be far more serious consequences should they fail to appear on Friday when Mr Bain’s case calls again.

It might simply be the case that Rangers’ counsel viewed the motion by Mr McIntyre as being impossible to oppose successfully. In that event, why spend extra money on having counsel and solicitor attend court? But, as I mention above, I cannot imagine things are so bad that Rangers could not fund an appearance re this today.

The former Finance Director at Rangers, Donald McIntyre

Might they have decided that opposition to the application would lead to the exposure of more dirty linen? After all, from all reports, Mr McIntyre’s counsel had stated his case at length last week. Therefore, in the absence of opposition, Lord Hodge simply had to consider the same issues as he had in dealing with Mr Bain’s application – firstly, whether Mr McIntyre had a prima facie case, secondly whether there was a real and substantial risk that enforcement of any decree which might be obtained in the action would be defeated or prejudiced by reason of Rangers being insolvent or verging on insolvency, if the court did not grant warrant for diligence on the dependence and thirdly, whether it was reasonable in all the circumstances to grant a warrant, including the effect which that grant may have on any person having an interest.

The non-appearance by Rangers can be seen as an implied admission regarding the three parts of the equation. Of most importance is the implicit admission that he has a prima facie case, and this time not one with a counterclaim against it (at least so far).

It also seems to confirm that, despite strident comment from Rangers that the decision of Lord Hodge in the Bain arrestment would be appealed, in fact this has not and is not happening.

Mr McIntyre’s case, if it follows a similar route to that of Mr Bain, is unlikely to reach a full hearing before next summer. Clearly his hope is that his arrestment will be in place long enough to provide him with some protection, as I will look at below.

 

The Arrestments By Mr Bain and by Mr McIntyre

Arrestments – an arrestment only catches funds in an account when the arrestment is lodged. If an account has £1 million in it today – nothing tomorrow – and £1 million the next day, then if the Sheriff Officers serve the arrestment today, there is success, but if tomorrow, it fails. That is the creditor’s hard luck, and a debtor would often be advised to take steps to put funds beyond the reach of an arrestment, if possible. There is no “punishment” for the debtor for their cupboard being bare when the Sheriff Officers come knocking!

Sheriff Officers visiting Ibrox Stadium earlier this year

One wonders if the Sheriff Officers might pitch up at Rangers’ bank tomorrow (19th October), once the cash takings from tonight’s friendly against Liverpool, are banked. Better to hit the account after those funds are deposited. Alternatively, it might be advisable to wait till just before pay day, when there should be funds in the account.

Mr McIntyre is likely to have a good grasp on his former employer’s cash flows, and should be able to advise his lawyers as to the best day to go for the arrestment.

In addition, the arrestment could be served upon someone due to pay Rangers money. For example, a TV company or sponsor, could have the funds they are due to pay Rangers frozen before they are paid to the recipient.

The Bain and McIntyre arrestments (the latter if successful) are “diligence on the dependence” of ongoing actions, not final decrees, so unlike the HMRC position mentioned below, there is no automatic transfer of those funds possible till after the conclusion of the relevant cases. These actions by the former directors are intended to ring fence funds to meet their claims, if successful.

The position about the “ring fencing” has been subject to some discussion.

As far as I understand, the position is as follows.

S61 of the Insolvency Act 1986 deals with the power of a receiver to dispose of property. I have assumed a receiver would be appointed first by “Group” under the floating charge assigned from Lloyds TSB to Craig Whyte’s Group when he acquired the Club. Subsection 1 states “Where the receiver … is desirous of selling or disposing, of any property or interest in property of the company which is subject to the floating charge by virtue of which the receiver was appointed and which is…(b) property or an interest in property affected or attached by effectual diligence executed by any person, and the receiver is unable to obtain the consent of such creditor … the receiver may apply to the court for authority to sell or dispose of the property or interest in property free of such … diligence.”

The question is, what is “effectual diligence”?

S61 (1) (1B), as inserted by S14 of Schedule 5 to the Bankruptcy and Diligence etc. (Scotland) Act 2007 states “For the purposes of subsection (1) above, an arrestment is an effectual diligence only where it is executed before the floating charge, by virtue of which the receiver was appointed, attaches to the property comprised in the company’s property and undertaking”.

This refers to the date of crystallisation of the floating charge, rather than the date of its creation. It crystallises, effectively, when it is enforced, by which method the receiver would be appointed. Therefore, as these arrestments have been put in place prior to the floating charge crystallising, the receiver would need the permission of the court to interfere with the arrested funds.

Subsection 3 provides that the court should not grant such authorisation “unless it is satisfied that the sale or disposal would be like to provide a more advantageous realisation of the company’s assets than would otherwise be effected.

So, on one view, the arrestments are useful for Messrs Bain and McIntyre.

If a liquidator is appointed however, the arrestments could lose their effectiveness, at least as regards benefiting the claimants.

S185 (1) of the Insolvency Act states “In the winding up of a company registered in Scotland, the following provisions of the Bankruptcy (Scotland) Act 1985—(a)subsections (1) to (6) of section 37 (effect of sequestration on diligence) … apply so far as consistent with this Act, in like manner as they apply in the sequestration of a debtor’s estate…”

Turning to s37 of the Bankruptcy (Scotland) Act 1985  we see at ss4 “No arrestment … of the estate of the debtor… executed—(a)within the period of 60 days before the date of sequestration and whether or not subsisting at that date; … shall be effectual to create a preference for the arrester…; and the estate so arrested …, or the proceeds of sale thereof, shall be handed over to the permanent trustee.”

So, if the there is a winding up (i.e. liquidation) within 60 days of the arrestment being lodged, then it gives the arrester no advantage. In that case, the funds go into the general pot, and are distributed to creditors.

In respect of Mr Bain therefore, if Rangers survive liquidation until 12th November, he has secured a substantial part of any award which might finally be due to him.

Can the gates of Ibrox repel the tide of financial attackers?

 

 

The HMRC Arrestment re the Small Tax Case

If, as has been discussed and assumed, HMRC succeeded in trapping £2.3 million, then this will automatically be paid to HMRC by the bank 14 weeks after the arrestment was carried out.

As I get bored with stating, Rangers could agree to let HMRC get their hands on those arrested funds. They are not obliged to wait the 14 weeks. Whilst the sum remains unpaid, interest will be accruing on the debt.

Why might they delay paying? It could be to annoy HMRC, but that is never a good idea. Otherwise it can only reasonably be that Rangers think they can defeat the HMRC claim by entering receivership and then liquidation quickly enough to render the arrestment ineffective, but as we have seen, 60 days gives the arrestment effective force against the liquidator.

If the company is wound up before the 60 days expire (at the end of this month) then the funds go back into the pot for creditors, and defeat the HMRC preferential claim.

From a PR point of view, and in the interests of getting HMRC onside to any extent, one would think they would be willing to hand that amount over. Clearly they have no intention of doing so.

 

What Comes Next?

Mr Bain is in court on Friday and we may hear more about potential witnesses. I understand that amongst the witnesses for Mr Bain it is likely that Messrs Murray, McLelland and Johnston would be called. That would be three heavyweight witnesses, who, one would suspect, might be less than enthusiastic about Craig Whyte bearing in mind his treatment of them and their colleagues.

The 60 day period for the HMRC arrestment runs out on 27th or 28th October. Will things happen before then?

Will Rangers try to interdict the BBC from showing this documentary on Thursday? If not, their PR barrage has already annoyed many, as they arrogantly bar co-operation with the BBC.

I might not get my detailed thoughts about freedom of speech and prior restraint down on paper before the programme goes out, but generally, unless the issue is one to do with national security, the courts are reluctant to block programmes before transmission. The remedy for actionable wrongs in such a broadcast is not to stop the show, but to allow an action for damages for defamation.

 

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Rangers FC, Martin Bain and Donald McIntyre – Back In Court Next Week

The saga, or as it now is, sagas, continue.

Rangers FC’s solicitors are scheduled to be back at the Court of Session in Edinburgh for at least two cases next week.

McIntyre v Rangers

As has been reported by Gerry Braiden in the Herald today, Donald McIntyre, Rangers’ former Finance Director, has raised proceedings againt the Club, and his legal team were at court yesterday seeking an order to freeze £300,000 pending resolution of his claim. The case was continued till next week when Rangers FC’s counsel will appear, one assumes, to argue against the arrestment order being granted.

Whilst the decision by Lord Hodge to grant such an order in favour of Martin Bain does not guarantee Mr McIntyre’s success with a similar motion next week, it would suggest that it is Rangers facing an uphill battle to persuade the court not to make the order.

It is worth noting that Rangers have scheduled, at apparent short notice, two friendly matches, one at Ibrox against Liverpool on 18th October and a second away to Hamburg on 29th November. Presumably these, as well as testing the team against strong opposition, are intended to raise some funds to mitigate, even in a small way, the loss of revenue from failure to progress in European competition this year.

Interestingly, Rangers’ own website states as regards the Liverpool game:

Season ticket holders who are signed up to the home friendly scheme, please note payment has been taken and smartcards have been activated.

That should have brought a much needed influx of funds to their bank account already, together with (a) what they receive on the gate and (b) the fee they will receive from Hamburg for travelling to Germany to play.

Might Rangers argue that this extra cash makes an arrestment order unnecessary?

It is likely that, after the embarrassment of Mr Bain’s similar application, Rangers will find more of their financial difficulties being aired at court next week, and one might expect the Finance Director to have his finger well and truly on the pulse as far as those issues are concrned.

Mr McIntyre is represented by HBM Sayers, one of the top litigation firms in the country, and by Jonathan Brown, a widely respected and experienced commercial Advocate.

Bain v Rangers

On Friday 21st October, at 10 am, before Lord Menzies, there will be a preliminary hearing in Mr Bain’s case.

The purpose of a Preliminary Hearing is for the Judge to get the case in order, to find out what the parties are arguing about, and to make any orders necessary to expedite the case towards its conclusion.

The specifics are detailed in the Rules of the Court of Session, Chapter 47.11 which states as follows:-

47.11.-(1) Unless a commercial action is withdrawn under rule 47.9 from the Commercial Roll then, at the preliminary hearing of a commercial action in which an election has been made under rule 47.3(1), the commercial judge-

(a) shall determine whether and to what extent and in what manner further specification of the claim and defences should be provided;

(b) may make an order in respect of any of the following matters:-

(i) detailed written pleadings to be made by a party either generally or restricted to particular issues;

(ii) a statement of facts to be made by one or more parties either generally or restricted to particular issues;

(iii) the allowing of an amendment by a party to his pleadings;

(iv) disclosure of the identity of witnesses and the existence and nature of documents relating to the action or authority to recover documents either generally or specifically;

(v) documents constituting, evidencing or relating to the subject-matter of the action or any invoices, correspondence or similar documents relating to it to be lodged in process within a specified period;

(vi) each party to lodge in process, and sent to every other party, a list of witnesses;

(vii) reports of skilled persons or witness statements to be lodged in process;

(viii) affidavits concerned with any of the issues in the action to be lodged in process; and

(ix) the action to proceed to a hearing without any further preliminary procedure either in relation to the whole or any particular aspect of the action;

(c) may fix the period within which any such order shall be complied with;

(d) may continue the preliminary hearing to a date to be appointed by him; and

(e) may make such other order as he thinks fit for the speedy determination of the action.

(2) Where the commercial judge makes an order under paragraph (1)(b)(i) or (ii) or (c), he may ordain the pursuer to-

(a) make up a record; and

(b) lodge that record in process within such period as the commercial judge thinks fit.

(3) At the conclusion of the preliminary hearing, the court shall, unless it has made an order under paragraph (1)(b)(ix) (order to proceed without a further hearing), fix a date for a procedural hearing to determine further procedure.

(4) The date fixed under paragraph (3) for a procedural hearing shall not be extended except on special cause shown on a motion enrolled not less than 7 days before the date fixed for the procedural hearing.

As can be seen from the comprehensive list of items mentioned, it may well be that next Friday will be the clearest exposition yet of the nuts and bolts of the dispute, and reference might well be made to parties to be called as witnesses, a topic I have mused on already. Whilst it is possible the hearing will be adjourned, or that parties will attend having agreed what they want His Lordship to do, it is more likely that these issues will require to be aired in court.

I would imagine that Mr Bain’s team will be looking for a full hearing of the case to be fixed as soon as possible in light of the concerns voiced about his former employer’s solvency, sependent as that is upon various matters including the First Tier Tribunal re-convening next month to conclude Rangers’ appeal against the HMRC assessment of over £30 million alleged to be due in relation to Rangers’ apparently “creative” use of EBT’s.

I think it might well be worth a trip to the Court next week, wearing my new hat for the occasion!

Will I need to take this off in court...

 

 

 

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Could Sir David Murray Ride to Rangers’ Rescue? – A Speculation

In 1988 Sir David Murray bought Rangers Football Club for the price of £6 million and in doing so laid the ground work for his very successful (in trophy terms anyway) control of the club over the next 22 years.

Is there any possibility he could ride to their rescue again, as a, to pardon the pun, White Knight? And if so, how and why could he do so?

As the weeks go past, speculation about the future of Rangers Football Club increases. Their troubles with the taxman, with their former solicitors and with their former Chief Executive are well publicised.

There is much interesting and apparently informed commentary on sites such as rangerstaxcase.com regarding events at Ibrox and the intentions of the new owner Craig Whyte towards the football team.

Rumours are rife that the company which owns the club, and which Mr Whyte bought from Sir David Murray’s companies, for £1 might go into receivership, administration or liquidation. The merest mention of Rangers on the published court lists, even where they are actually pursuing a case, causes people to ponder precisely where this leaves matters.

Will Rangers go under, to be resurrected by a new company buying St Mirren and moving them to Ibrox? Will HMRC get any or all of its money paid to it? Will Mr Bain, the former CEO, get his day in court and is there anything of interest to be uncovered by his legal team in the Rangers’ records? Is Mr Whyte in this for the long-haul, or is it purely and simply a business investment for him (bearing in mind his history of investing in troubled companies and seeking to make money from a turn around or asset disposal)? Will the documentary scheduled for next week on BBC1 shed any light on matters?

I am happy to say I am not going to answer any of those questions just now, but there is one part of the conundrum which I thought might be worth consideration, so here goes.

Might Sir David have the glue to stick this together again?

When the transfer of the 85% of the shares in the Rangers Football Club PLC (“the Club”) from Murray MHL Ltd (“the Vendor”) to the Rangers FC Group Ltd (formerly Wavetower Ltd  and referred to hereafter as “Group”) was concluded, Mr Whyte issued a circular to the remaining shareholders.

This document has already been analysed in depth, but there is one part I want to look at.

Part III of the Circular has the following preamble:-

“The Agreement, together with a separate side letter between The Rangers FC Group and the Club, contains a number of undertakings in relation to The Rangers FC Group’s commitment to the Club and these are expressed to be enforceable by both the Club and the Vendor.” (Emphases added)

Of course I do not have access to the “side letter” so it might render moot all contained herein, but bearing in mind the relevant company legislation, and the duties on companies not to mislead shareholders I do not imagine the side letter saying, in effect, that all the undertakings are worthless.

Subject to that proviso therefore, it should be noted who can enforce the undertakings which are Group’s (i.e. Mr Whyte’s) commitment to the Club. The Club, which is of course owned effectively by Mr Whyte, and “the Vendor” can each do so.

The circular makes it clear therefore that Murray MHL Ltd has the power to seek to enforce the undertakings given by Mr Whyte’s Group.

Whilst some of the undertakings are medium or long term, there is one in particular which might be on the point of being broken.

“The Rangers FC Group is to contribute to the Club the amount required to meet a liability owed by the Club to HM Revenue & Customs in relation to a discounted option scheme tax”.

This is the so-called “Small Tax Case”, and is in connection with the sums in excess of £2 million frozen by HMRC. It would appear that these sums have not yet been paid, and recent publicity from the loquacious Mr Whyte suggested it would not be paid until the question of the further £1.4 million penalty was resolved (that is not how HMRC works however).

The frozen funds, if Rangers avoid an “Insolvency Event”, will in due course be automatically paid to HMRC but at any time prior to that Rangers could authorise release.

It may well be that Mr Whyte wants to hold the funds where they are in the event that an Insolvency Event occurs before the arrestment of the funds secures a preference for HMRC, thus giving “Group” as floating charge holder first call on it.

Alternatively, he might not want to be seen to have breached the undertaking.

What are the effects of Group breaking such an undertaking?

This is where matters get even more interesting. According to the Circular “a breach of any of the undertakings given by The Rangers FC Group in the Agreement will result in the debt acquired being automatically extinguished. The terms on which the debt would be extinguished are to be agreed by the parties at the relevant time.”

The RangersTaxCase blog referred to has pointed out that, on the takeover, “Group” took an assignation from the Bank of £18 million of indebtedness owed by the Club, in return, one assumes, for a payoff at a discounted rate. In addition, “Group” acquired rights under the Bank’s floating charge. The speculation regarding Mr Whyte’s intentions has centred upon “Group” having the right under this floating charge to have first call on the assets of the Club, in terms of the ground, Murray Park, players’ transfer fees etc in the event that an “Insolvency Event” takes place. Bearing in mind that the debt owed to “Group” is increased by all the investment made into the Club and presumably with hefty management fees and charges for Mr Whyte’s expertise and that of the other directors and staff, it may well be that that sum is substantially greater now than £18 million.

If, however, that debt is “automatically extinguished” where does this leave “Group”? Suddenly the floating charge would be ineffective, as the underlying debt had gone. The Club would be left with all its creditors, unless the HMRC and Bain arrestments had been in place long enough, having an equal claim on the assets, and HMRC would have in excess of 25% of the debt, which would allow them to block any CVA entered into by the Club if it failed to pay sufficient to HMRC in connection with Rangers unpaid tax bills.

Such a development would scupper what some have guessed to be Mr Whyte’s plans!

Foiled Again! (PLease note this figure bears no relation to any figure, living or dead, and is entirely fictional.)

How could this happen?

The Club (owned by Mr Whyte and his “Group”) is not going to accuse “Group” of breaking its undertakings. But could the Vendor, Murray MHL Ltd, do so? The fact that, as at 10th October, it is listed as a “non-trading” company would not prevent it taking action. It is still a live company whose returns are not overdue.

The Vendor therefore could raise the issue of breach of undertaking, triggering the extinction of the debt owed to “Group” by the Club. This would play out in the court, but would have the potential to put a significant spanner in Mr Whyte’s works.

Such an outcome would remove a large chunk of Rangers’ debt and maybe, as I have speculated before, be enough to allow the Club to survive, without the complications of a new company etc being created.

Could Sir David Murray decide to pursue such an apparently quixotic course of action? Perhaps, if he felt aggrieved that his loyal lieutenants, such as Martin Bain, and Donald McIntyre, had been treated so badly? Might he be concerned that Mr Whyte’s alibi if Rangers collapse, as already hinted at in the Bain litigation, is that all the fault lies with the Murray regime? Might Sir David decide that, in an effort to preserve Rangers from a rapacious asset-stripper (and of course I am not suggesting in any way, shape or form that Mr Whyte or his associates could be described as such) he should take a last stand at Ibrox?

The answer to all those questions is probably no. I suspect that Sir David Murray has had enough of Rangers to last him many lifetimes. However, if he sees that there is a necessity to protect the Rangers legacy…one never knows!  

 

Addendum – Just to make it clear, I do not see this as a way for Sir David Murray to retake control of Rangers, but is there the smallest chance he might see a way of acting, one last time, in his old team’s best interest?

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David Goodwillie Sued by his Agent! Rangers Agree to Surrender Documents to Bain’s Lawyers – Me at Scotzine

The court lists sometimes contain interesting details.

Today we can see that David Goodwillie has been sued by his agent, and separately confirmation of the court date for the next round of Bain v Rangers. As discussed in the full piece over at Scotzine.com, Rangers have avoided the hearing taking place!

Read all about it over at Scotzine.com! Click the logo to go to the article.

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Filed under Bain v Rangers, Civil Law, Courts, Football, Me at Scotzine