Dirthy Filthy Hun Scumbag Vermin (deceased), liquidated & Green abondons ship

[octavion]

just die already  you horrid cheating club 

Wish someone would just grow a set and say enough is enough 

[BobbyBiscuit]

Ticketus deal stands, supposedly.

 

That's two of the bids out the window then.

 

[Kowalski]

I know very little about tom english bar hearing him speak on traynors phone in a couple of times.  I quickly came to the conclusion that he is a cunt

 

Can't say I've heard what he's been saying on any phone ins but he's a top notch sports writer IMHO and some of his articles on the subject of Rangers in the Scotland on Sunday are excellent.

[glasgow sheep]

Ticketus deal stands, supposedly.

 

That's two of the bids out the window then.

 

 

This deserves a wafer!

 

http://image.shutterstock.com/display_pic_with_logo/187633/187633,1214995207,2/stock-photo-jelly-and-ice-cream-with-a-wafer-and-cream-14435560.jpg[/img]

[glasgow sheep]

Oh cancel that

 

http://www.bbc.co.uk/news/uk-scotland-glasgow-west-17489451?utm_source=twitterfeed&utm_medium=facebook&utm_campaign=sportsound

 

A judge has declined to rule on whether Rangers can rip up a £24.4m season-ticket deal with Ticketus.

 

BUT

 

However, he did clarify Ticketus's status as a creditor.

 

The judge said the company had no security over the assets of Rangers and was a simple creditor with the same rights as other creditors.

 

I think this means that instead of owning the STs for the next 3 or 4 years and getting millions from them (millions more than they gave Whyte) they are in fact simply a creditor, presumably for whatever money they gave Whyte which can be paid off at a fraction of the potential earning power of ST sales in a CVA

 

I'm afraid this is good news for Rangers. 

[BobbyBiscuit]

fucking hell 

[glasgow sheep]

fucking hell 

 

This whole situation is as clear as mud.

My understanding was that Ticketus bought so many season tickets in advance at reduced price (as little as 50%).  They then planned to make their money back each year by taking the money for each ST (minus admin):

eg They paid £200 for a ST, hun buys said ST for £400, ticketus go off with £200 profit per ST minus admin charges.

 

I'm not sure on reflection that this judgement changes anything in that respect, Ticketus will still be after the £400 per ST but as an unsecured creditor in a CVA they will only get say £40 per ST if it is 10p in the £1.  This would make the debt they are after significantly more than the £24M they paid Whyte.  If that is true on top of their other debts that is huge and perhaps not a great day for Rangers after all.

 

Anyway someone on the rangerstaxcase comment section put it a bit better:

 

My understanding of the deal would be that Ticketus have bought tickets for football at Ibrox for a number of years in the future (this was a funding mechanism used by RFC before). It appeared to be that when Whyte was in charge and last years payment was due, the deal was extended taking it to 2015/16.

 

I had previously said that I think Duff and Duffer went to court because strictly speaking, Ticketus are not a creditor of RFC and D&D wanted them to be so they could stick them in the CVA. Today’s ruling implies (to me anyway) that the original deal stands.

 

What does that mean? Well, I think that Ticketus will not be due a bean until the next season tickets are bought and paid for (and probably at an agreed payment date in the future likely to be July) and even then, it will only be for 1 of the 4 years. At the same time the year after, money will again be due and so on. I think the judge has said today that if RFC are in administration when the cash is due, Ticketus can be stiffed like any other creditor but not until then.

 

If this is all true (and it may be a pile of Craig Whyte) Ticketus will get their dosh even if RFC newco is founded – provided they play their games at Ibrox. If it’s not, the biggest question for me would be – why would D&P go anywhere near a court, they could just not pay them and then ditch the contract when RFC 2012 are created!

[glasgow sheep]

Basically Ticketus will become creditors if the first payment to them is due while the club is administration meaning the would get p/£ back

If the club has exited administration via a CVA Ticketus will/should get their money in full meaning rangers cash flow is fucked for years.  A CVA presumably wouldn't be able to incorporate future debts.

 

So the only deal on the table is the Blue Knights/Ticketus deal which will presumably see Ticketus get most their money back, c60% of Rangers annual income going to Ticketus and the BlueKnights hoping they can get enough in a share issue to balance the books for the next 5 years.  Which makes rangers broke and struggling for several years yet.

 

Only other options in Liquidation, wipe out the debt and hope the spl/sfa/sfl let them in somewhere.

 

All of this excludes the BTC which will blow all this out the water.

[scotfree]

Alison Robbie ?

#Rangers administrators believe today's court ruling means they have the power to decide if Ticketus deal is ripped up or not

[tom_widdows]

Alison Robbie ?

#Rangers administrators believe today's court ruling means they have the power to decide if Ticketus deal is ripped up or not

 

Believing is all fine and well. I wonder however they will feel when ticketus lawyers go to court to argue this for several years with yon currants paying duff & phelps bills

[scotfree]

Believing is all fine and well. I wonder however they will feel when ticketus lawyers go to court to argue this for several years with yon currants paying duff & phelps bills

Hope you are right Tom. This seems to be taken fucking ages!

[glasgow sheep]

The only way this will be resolved quickly will be if rangers are liquidated. If they don't then it will hinge on the result of the big tax case which is likely to face further court battles which ever way it goes.

[scotfree]

http://www.scotsman.com/news/in-full-rangers-administrators-statement-on-ticketus-1-2192953?utm_medium=twitter&utm_source=twitterfeed

 

 

Rangers joint-administrator Paul Clark. Picture: Robert Perry

 

Published on Friday 23 March 2012 17:24

 

Duff and Phelps, the administrators of Rangers Football Club, issued the following statement today.

 

Paul Clark, joint administrator, said: “We welcome the decisions announced by Lord Hodge today and view them as a significant step towards clarifying the future for Rangers Football Club.

 

“Lord Hodge has made it clear that the Ticketus arrangements do not mean Ticketus has property or real rights over seats at the stadium or, indeed, the proceeds from the sale of future season tickets.

 

“Lord Hodge has stated Ticketus has what are known as contractual rights, essentially a contract between the Club and themselves. It is clear from the judgement that, as administrators, we have the statutory right and powers to have the company (the Club) refuse to honour the Ticketus arrangements if such a decision would be in the interests of creditors generally.

 

“Lord Hodge has also referred to the various applications we made to the court. Initially, we did ask for guidance on the immediate termination of the Ticketus contract. We fully accept this guidance could not be given without disclosing the details of bids for the Club in open court. This would most certainly not have been in the interests of creditors or the football club, particularly since the party which were subject to the legal proceedings also have an active interest in a bid for the Club.

 

“We note the request from Ticketus following today’s judgement for matters to be brought to a conclusion as soon as is possible in relation to the sale of the Club. We couldn’t agree more. However, a number of competing bids have been submitted to purchase the Club and the bid that will ultimately be successful will be the one that is in the best interests of the creditors and the business.

 

“To date, our discussions with bidders have been very constructive and we will continue these discussions with all parties, including the consortium in which Ticketus is involved, in an effort to achieve a successful outcome.

 

“We intend to create a shortlist of bids at the earliest opportunity and have no doubt today’s decision will have a significant bearing on the proposals put forward by bidders to date.”

 

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[scotfree]

Mike Farrell ?

In Scots insolvency law, a contracting party who has paid in advance for an asset does not thereby acquire an equitable right in the thing..

 

[scotfree]

http://news.stv.tv/scotland/west-central/301435-rangers-administrators-lose-in-court-move-to-ditch-244m-ticketus-deal/

 

 

A judge has refused an attempt by Rangers administrators to gain legal guidance on whether they could breach a £25.3m season ticket deal.

 

Duff and Phelps had sought directions from the Court of Session over whether they could renege on the agreement and not pay Ticketus the proceeds of sales.

 

At the Court of Session on Friday Lord Hodge returned his decision on the move by the insolvency firm, stating that he would not give them guidance on what could be done in this case.

 

He told the court that he did not have enough information regarding the situation at the crisis-hit club to make a ruling.

 

However, the administrators claimed they could still press ahead with a move to tear up the deal if it was "in the interests of creditors generally".

 

After the hearing, Paul Clark, joint administrator, said: "We welcome the decisions announced by Lord Hodge today and view them as a significant step towards clarifying the future for Rangers Football Club.

 

"Lord Hodge has made it clear that the Ticketus arrangements do not mean Ticketus has property or real rights over seats at the stadium or, indeed, the proceeds from the sale of future season tickets.

 

"Lord Hodge has stated Ticketus has what are known as contractual rights, essentially a contract between the club and themselves. It is clear from the judgement that, as administrators, we have the statutory right and powers to have the company (the club) refuse to honour the Ticketus arrangements if such a decision would be in the interests of creditors generally."

 

Lord Hodge declined to grant Ticketus, which is backing the Blue Knights consortium to take over the club, preferential treatment as creditors under English law. The judge also confirmed that "in Scots insolvency law, a contracting party who has paid in advance for an asset does not thereby acquire an equitable right in the thing and is treated as an unsecured creditor."

 

Sale Sharks Rugby Union Club owner Brian Kennedy, who has submitted a conditional bid for Rangers, released a statement after the court outcome.

 

He said: "I am taking legal advice to find out what the court ruling means with regard to the indebtedness of Rangers Football Club and until that is clarified I will be making no further comment."

 

In response to the agreement, the firm that is part of Octopus Investments released a statement.

 

It read: "Ticketus is issuing a statement following today’s decision by Lord Hodge not to grant the Administrators’ request for the court to give them the right to tear up the ticket purchase agreement Ticketus has with Rangers Football Club. The legality of Ticketus’ contract was not an issue.

 

"The court has made it clear today that the Ticketus contract cannot be breached unless there is substantial evidence that by doing so the administrators are able to significantly improve returns for creditors and improve the chance of returning the Club to a going concern. Given the strength of the Blue Knights consortium’s bid, and Ticketus’ role in this with its contract remaining valid and enforceable, we question the ability for this to happen."

 

'Protect investors'

 

Ticketus stated the company "will do everything necessary to defend our position to ensure our contract is honoured and our investors’ interests are protected." In the statement, the firm also claimed that it is "part of the solution" to Rangers’ financial plight.

 

It is backing the Blue Knights consortium led by ex-Ibrox director Paul Murray, which submitted an indicative bid for the club last week.

 

The statement added: "Collectively, the consortium has the ability to provide the club with the financial stability it needs to continue to perform at the highest level of competition. The consortium is committed to providing Rangers’ loyal fan base with the transparency and disclosure it deserves, as well as exploring ways for fans to have a closer relationship with the management of their club.

 

"With every week that passes, further value is destroyed in the club. To conclude the administration process as soon as possible so that the club can secure its future in the hands of a new owner is in everyone’s interest. We feel confident that we can conclude this process more swiftly than other bidders."

 

Rangers owner Craig Whyte sold off 100,000 season tickets at Ibrox until 2015 for £25.3m which effectively funded his takeover as he used part of the cash to wipe off the club’s £18m debt to Lloyds Banking Group.

 

The court heard on Friday that £20.3m for season tickets from 2011 to 2013 was paid by Ticketus on May 9 last year, three days after Mr Whyte bought his 85% shareholding in the club for a nominal £1 from Sir David Murray. A second tranche of season tickets for 2013 to 2015 was sold to Ticketus on September 21, for around £5.07m. The court had previously heard the season tickets would have brought in around £48m into the club over those four years.

 

Duff and Phelps had claimed that the deal would hamper their attempts to sell the club.

 

The administrators QC David Sellar had claimed in court that two of the four indicative bids for the club were dependent on the Ticketus deal being breached.

 

In his decision, Lord Hodge noted: "I am informed that the expected income flow from the sale of the season tickets is likely to represent about 60% of the cash flow of Rangers in those seasons.

 

"Accordingly, the sale of that income flow is likely to have a significant effect on what interested parties may bid for the majority shareholding in Rangers or for that company's business and assets."

 

The judge noted on Friday that "An administrator would not be acting in breach of his duty to the company if he refused to perform a contract having acted reasonably to satisfy himself that the continued performance of the contract (i) would impede his achievement of the objectives of the administration and (ii) was not in the interests of the company's creditors as a body."

 

However, Lord Hodge felt that if the administrators could establish reasonable grounds for ripping up the Ticketus contract, they would most likely need "legal justification" to do so.

 

The judge also found: "I am satisfied that I cannot give the original direction which the administrators have sought without further information about the relevant circumstances of the administration and the administrators' proposals in the light of their discussions with interested parties."

 

Lord Hodge also addressed the status of the Ticketus deal should Rangers go into liquidation. He stated "as a general rule" if a company sought a court order to enforce a contract with a firm in liquidation, "it should refuse to do so because the company could not perform or because such an order would conflict with the statutory duties of the liquidator."

[glasgow sheep]

Well that's that clarified

[baggy89]

So the deal stands but at the minute ticketus are owed no money as next years season tickets are not sold. When they are ticketus will become a creditor but with no hold over physical assets. So duff and phelps sell off season tickets then go for a CVA?? Pity Whyte didn't sell all the 2012 till 2015 season tickets  to fans  in a oner as at that point ticketus could well have become the major creditor and blocked any CVA.

[glasgow sheep]

lengthy but helpful:

http://scotslawthoughts.wordpress.com/2012/03/24/rangers-administration-lord-hodges-decision-re-ticketus-part-1-new-information/

 

Rangers’ Administration – Lord Hodge’s Decision re Ticketus – Part 1 – New Information

 

 

 

Yesterday Lord Hodge issued his decision in the application by D&P for “Directions” in connection with their handling of the Rangers administration – [2012] CSOH 55.

 

 

 

New or Extra Information from the Case

 

 

 

1                    Rangers Football Club PLC (Rangers) was and remains unable to pay its bills as they fall due.

 

 

 

2                    The application for the Administration Order referred to a £9 million liability to HMRC.

 

 

 

3                    The administrators (D&P) want either to rescue Rangers with a share issue, or to sell off the assets of the company, in either event with a CVA.

 

 

 

4                    D&P wanted the court to give them carte blanche to breach the Ticketus deal, without fear of legal action by Ticketus.

 

 

 

5                    D&P based their original sale prospectus on the Ticketus deal being void, but had to amend this to include the possibility of it staying in place.

 

 

 

6                    “Ticketus” is a combination of two Limited Liability Partnerships, Ticketus LLP and Ticketus 2 LLP, both consisting of a large number of companies under the Ticketus umbrella.

 

 

 

7                    The Ticketus agreement was with Rangers, not with Rangers FC Group Ltd (Group) or anyone else.

 

 

 

8                    The agreement was signed, and first payment of £20 million made, on 9th May, 3 days after the takeover.

 

 

 

9                    It was proposed that Rangers would lend Group £16 million.

 

 

 

10                A second payment of £5 million was made six days after Martin Bain was granted a court order freezing sums in the Rangers accounts.

 

 

 

11                Notwithstanding any other argument D&P have, they are trying to have the Ticketus deal declared unenforceable on “financial assistance” grounds.

 

 

 

I aim to discuss the new information revealed in this case below in more detail.

 

In later posts I want to explain some of the implications of the case for Rangers’ future and potential sale of the Club.

 

Finally, it is also the case that the decision could have serious consequences for the Scottish finance sector, which I will try to address. As always, I am happy to be educated and corrected by those wiser than me.

 

 

 

Do We Learn Anything New From The Decision?

 

Yes.

 

This case and Lord Hodge’s decision are the first public acknowledgement of many issues which have been causing confusion since the Rangers situation started to deteriorate.

 

The relevant, and in some cases, newly revealed facts are as follows:-

 

Rangers Insolvency

 

As we know D&P had to go back to the court on the basis that their original appointment by Rangers was defective, because of a failure to notify the FSA. When Mr Sellar (D&P’s QC) asked the court to grant an administration order backdated to 14th February, this confirmed (a) that Rangers accepted that it had been insolvent as at 14th February and (b) that D&P accepted that Rangers remained so on 19th March when the retrospective administration was dealt with.

 

Mr Sellar referred the court to a debt of over £9 million to HMRC. That is assumed to relate to the unpaid VAT and Income Tax accrued by Rangers whilst under the control of Mr Whyte, or more correctly of his companies.

 

 

 

How Do D&P Aim to Get Rangers out of Administration?

 

D&P have come up with two alternative ways of achieving the purposes of administration. They are laid down in the Administration Rules. The primary purposes are, in order, to rescue Rangers as a going concern, which failing, to achieve a better result for the creditors as a whole than if it was wound up without first being in administration.

 

D&P have identified, and told the court, that they see two realistic options.

 

Option one is a “subscription of new shares in Rangers and a sale of the present majority shareholding combined with a Company Voluntary Arrangement (CVA) between Rangers and its creditors”.

 

The alternative is “a sale of the business and assets of Rangers, again combined with a CVA”.

 

I will come back to these later.

 

 

 

What Were D&P Wanting the Court to do, and Why?

 

The Administration Rules allow administrators to approach the court for “directions”. These can be sought to give the “green light” to planned actions, or to validate steps taken by the administrators. In addition, this procedure can be used to clarify matters which may be in dispute regarding the administration.

 

In this case D&P initially asked the court for a direction as follows:-

 

“as to whether the administrators can be prevented from causing [Rangers] to terminate, albeit in breach of their terms, the [Ticketus agreements].”

 

As the hearing continued, the application was amended to request, in the alternative:-

 

“a direction as to the legal nature of the rights which the agreements confer on Ticketus in respect of (i) the Company’s Stadium, and (ii) the proceeds of future sales of season tickets for that Stadium;”

 

and

 

“a direction as to the legal test which is to be applied by [the] administrators or by the court in determining whether those administrators can be prevented from causing the company to terminate the agreements, albeit in breach of their terms.”

 

What does this mean?

 

From the limited press coverage of the court hearing, it seemed that the only issue was that D&P found the Ticketus deal inconvenient as regards a sale, and therefore they wanted permission to “rip it up”.

 

As we can see, there was a lot more than that!

 

The initial application was to for confirmation from the court that D&P could not be stopped from breaching the Ticketus agreement on behalf of Rangers. This was based on the premise that the Ticketus deal was valid (to which I will return) and that there was no contractual reason permitting the breach of contract.

 

If D&P decided to breach the contract with Ticketus, they wanted to be sure that Rangers would not be on the receiving end of a court action either preventing the breach by interdict, or ordering Rangers to perform it.

 

Whilst in administration no such action could be pursued without consent of D&P or the court. However, if Rangers emerged from administration, D&P did not want the company to be saddled with the Ticketus deal, and if the deal was broken, then the Ticketus claim would, at best, be an unsecured claim in the CVA.

 

The first added request was for a direction on the nature of the Ticketus “rights” and what legal form this took as regards Ibrox and the proceeds of future ticket sales. This part is probably the most legally complex, and the area of broadest legal impact (of which more later).

 

The second added request was for Lord Hodge to lay down a formula to be applied by D&P and the courts in deciding if D&P could be stopped from breaking the Ticketus contract. This was an attempt to get round the possibility that, under the originally formulated request, the direction could have been refused, whereas this new method would, even if refused, tell D&P what they had to do.

 

 

 

Why Was This Important?

 

D&P issued a “Memorandum of Offer” inviting expressions of interest in acquiring either the majority shareholding in Rangers or most of its business assets. The Memorandum of Offer issued on 14 March 2012 invited interested parties to assume that “no future revenue needs to be committed to Ticketus” both in the context of a CVA and a trade sale of Rangers’ business and assets. D&P issued a revised Memorandum on 16 March 2012 which contained a third option of a CVA in which the arrangements with Ticketus continued to have effect.

 

Any bidders for either Rangers or the assets needs to know if there is an ongoing liability to Ticketus.

 

In the same way, any bidder for Rangers, as opposed to the assets, needs to know the outcome of the Big Tax Case first.

 

 

 

Who or What is Ticketus?

 

One of the apparent mysteries in this case related to the identity of Ticketus.

 

The press statement released by Octopus on 17th February did not really help make things crystal clear.

 

“Octopus Investments would like to clarify the position of Ticketus with regard to the current Glasgow Rangers coverage.

 

Ticketus is one of the many entities into which Octopus Protected EIS invests. Ticketus has purchased tickets for Glasgow Rangers games for a number of seasons in advance, as it has done for a number of years previously with the club.

 

Ticketus does not lend money; Ticketus is the owner of assets – the tickets. Octopus is continuing to work with the administrators and Glasgow Rangers on this matter.”

 

Lord Hodge notes that “Ticketus” for the purposes of this action consists of two limited liability partnerships registered in England, namely Ticketus LLP and Ticketus 2 LLP.

 

Both of these are, as stated, limited liability partnerships. The “partners” in each are a large number of Ticketus companies, each with an individual number.

 

The first LLP has, as per its last accounts (July 2010), over £92 million of net assets, with the second just over £70 million. Between the pair at that time they had cash as per the balance sheets of £131 million. Therefore, even though these are wealthy organisations, and they exist primarily to provide tax breaks to investors, the Rangers deal is a large and risky one for them.

 

Ticketus LLP formed in November 2008 and Ticketus 2 LLP in June 2009.

 

For such large organisations, in monetary terms, the combined total number of employees was only 23.

 

 

 

What Was the Ticketus Deal?

 

Lord Hodge describes it thus:-

 

“Ticketus operates a business of buying and selling tickets for, among others, sporting events. The two contracts with Ticketus, which I discuss below, in summary involve the sale by Rangers to Ticketus of season tickets and an agency arrangement by which Ticketus is to receive the income flow from the sale of the season tickets. On or about 9 May 2011 Ticketus paid £20,300,912 for the first tranche of the season tickets which covered the seasons 2011-2012, 2012-2013 and 2013-2014. On or about 21 September 2011 Ticketus paid a further £5,075,213 for the second tranche of season tickets, which covered the seasons 2013-2014 and 2014-2015. I am informed that the expected income flow from the sale of the season tickets is likely to represent about 60% of the cash flow of Rangers in those seasons. Accordingly, the sale of that income flow is likely to have a significant effect on what interested parties may bid for the majority shareholding in Rangers or for that company’s business and assets.”

 

This clarifies a lot of the misinformation and speculation about the Ticketus deal.

 

 

 

1                    It was not and is not a loan.

 

2                    The contract was between Rangers Football Club PLC (Rangers) and Ticketus.

 

3                    It was not a contract directly involving Group, Liberty Capital Ltd or anyone else.

 

4                    The money was not paid until after the takeover had been effected.

 

5                    Therefore, whilst the arrangements were put in place prior to the sale, the purchase of shares by Group proceeded in advance of the Ticketus payment.

 

6                    The takeover was not paid for by Rangers.

 

7                    Ticketus paid a second tranche in excess of £5 million on 21st September 2011.

 

 

 

I find point 7 particularly interesting. The payment was made to Rangers six days after Lord Hodge granted an order in favour of Martin Bain permitting him to freeze a substantial sum within Rangers bank accounts.

 

This might help to explain how Rangers managed to keep going when some observers were guessing that the money would have run out by then. In addition of course the non-payment of tax at a rate of around £1 million per month would also have helped with the cash flow!

 

The contract for the sale of season tickets was dated, as I have said, 9th May and it provided that the sale would take place in two tranches. It seems very fortuitous for Rangers that, six days after a judge decided that there was, in light of the Big Tax Case, a serious risk of insolvency, Ticketus paid for more tickets for 2013-2014 and for 2014-2015!

 

By that stage of course, HMRC had already arrested £2.3 million in Rangers accounts.

 

Were Ticketus looking to get out of the deal, or were they in a position where the only realistic way of protecting the investment was to pay over more money? If the latter, that fully explains why Ticketus is involved with one of the consortia trying to buy Rangers.

 

 

 

D&P Are Trying to strike the Ticketus Deal Down

 

Lord Hodge also confirms that D&P are trying to have the Ticketus deal declared unenforceable. This is over and above the issues explored in this application, and whilst the judge mentioned it, he offered no view at this time.

 

The argument by D&P seems to be as follows.

 

1                    Rangers would use the payment for the first tranche of tickets to “effect repayment” of the £18 million owed by Rangers to the Bank of Scotland.

 

2                    Rangers would lend Group £16 million to “enable that debt to be repaid” and the “bank’s debt and its securities would be assigned to (Group)”.

 

3                    Such an arrangement is, according to D&P, illegal under s678 of the Companies Act 2006. This is the so-called “financial assistance” rule.

 

D&P have a choice about how to deal with the Ticketus deal on the “financial assistance” point.

 

They can go to court for an order that the contract is unenforceable, or the contract can be repudiated by them, on behalf of Rangers, and they can defend any court action which Ticketus might later bring, subject to the complications caused by administration etc.

 

Either way, it seems that Ticketus and D&P are likely to be back in court on a regular basis.

 

Posted by Paul McConville

[glasgow sheep]

http://blogs.channel4.com/alex-thomsons-view/succulent-lamb-menu-questions/1010

 

Superb stuff.  Amazing it has taken one journalist to look at things with a fresh pair of eyes to say what we've all been saying for years, if not decades.

[maverick sheep]

aye it's certainly the first time i've read anything about either of the OF which told truth!

[tlg1903]

Jump to 24 minutes and listen to what barry glendenning says about huns.  Priceless

 

http://www.guardian.co.uk/football/audio/2012/mar/24/football-weekly-live-open-weekend

[tlg1903]

Can't say I've heard what he's been saying on any phone ins but he's a top notch sports writer IMHO and some of his articles on the subject of Rangers in the Scotland on Sunday are excellent.

 

Sorry kow just spotted this.  I find this very interesting, on the couple of times i have listened to him on traynor he has sounded not dissimilar to a hun apologist.  Usual tripe about how needed the huns are in scotland and how sad this all is. 

[tom_widdows]

Sorry kow just spotted this.  I find this very interesting, on the couple of times i have listened to him on traynor he has sounded not dissimilar to a hun apologist.  Usual tripe about how needed the huns are in scotland and how sad this all is.

 

Is this the same guy who was on last night's YourCall when Chick Young was hosting?

 

Personally if Traynor isnt available they should just cancel the show because those 2 have no idea how to entertain any notions other than their own. Admittedly they get a lot of muppets calling in but in my experience if Chick young has made his mind up about any subjet (and I mean anything. Doesnt have to be about the old firm) he will just cut the caller off after one sentence. Its like listening to a Fox News programme.

Last night was no exception

[glasgow sheep]

Some good reading for a Monday morning:

 

Rangers’ Administrators Want to Rescue the Club with a Share Issue – Why It Won’t Work

 

On Friday Lord Hodge issued his decision in the application by D&P for “Directions” in connection with their handling of the Rangers administration.

 

Put very simply (and with due respect to the 63 paragraphs of the decision), he decided:-

 

A            that any rights Ticketus hold in Ibrox Stadium, the season tickets for the stadium and the proceeds of future tickets sakes are personal contractual rights. This means that Ticketus can only enforce their agreement against Rangers Football Club PLC, and they would have no rights against any other party who acquired Ibrox Stadium for use as a football ground during the currency of the Ticketus agreement, which ends after season 2014-2015.

 

An excellent analysis of that aspect of the decision can be found here, and I commend it to my readers.

 

B            that he was not wiling, standing the information he had been given, to make any order or give any guidance to D&P permitting them to break the Ticketus contract with impunity.

 

 

 

D&P, as stated to the court, see two ways of achieving the purposes of administration. As you may recall, the primary goal is to rescue the company as a “going concern” which failing to achieve for the generality of creditors a better result through administration that through insolvent liquidation.

 

Their two ways of doing so are as follows: a share issue and sale of the majority stake in the company; or a sale of the assets of the business. In either case this would be accompanied by a CVA.

 

I will look at both in more detail now, with reference to the Ticketus scenario. (For fans of large thrillers, doesn’t “The Ticketus Scenario” sound like a Robert Ludlum title? I digress.)

 

 

The Share Issue Option

 

The Rangers Debt Situation

 

Rangers Football Club PLC is in a dreadful financial mess. It presently owes at least £9 million to HMRC in connection with unpaid taxes accruing since May 2011, as stated by counsel for D&P in the Court of Session. That figure may be as high as £15 million.

 

Rangers owe the Debenture holders who contributed some years ago to ground improvements around £8-9 million, the Debentures becoming due and payable upon the company entering administration.

 

Rangers owe HMRC in relation to the “Big Tax Case”. Whilst the case awaits a decision from the Tax Tribunal, HMRC cannot enforce payment, but they will move to do so as soon as they have a judgment. The determinations under appeal by Rangers date back to February 2008. The appeal was commenced in 2009. HMRC will have lodged a claim with D&P for the full sum it is seeking, together with interest and penalties. This liability was described by Craig Whyte as possibly running to £75 million!

 

Martin Bain, the former Chef Executive, has a damages claim due to be heard in court in July where he is seeking over £1 million in compensation.

 

Rangers FC Group Ltd, which appears to hold security in the form of a floating charge over Rangers’ assets claims to be a substantial creditor too, for many millions.

 

Rangers’ business model has resulted in it having an annual £10 million “black hole” in terms of excess of expenditure over income, if European income does not appear.

 

D&P have been able to cut £1 million per month from running costs by letting 4 employees leave, and by having the players take temporary pay cuts till the end of the season, at which time one imagines the players will want paid in full again.

 

The Ticketus deal means that 60% of Rangers’ season ticket income would go to that company and not to Rangers.

 

Let’s ignore for a minute the requirements that an ongoing Rangers needs to fulfil to play in the SPL next season, as I am sure that the SPL would exercise its discretion to allow them to compete even if deadlines were missed. (For the avoidance of doubt, I do not criticise that decision, should it be made. If the football authorities can act legitimately in a way which helps a member club, as long as this is not at the expense of other members, then this is consistent with the notion of a “league”).

 

However, UEFA will not, and ought not, to excuse the failure of Rangers to obtain a UEFA licence for next season. As Financial Fair Play is a key part of Michel Platini’s manifesto for UEFA, then it will not excuse Rangers owing tax, being in administration and failing to produce unaudited accounts. Therefore, for at least one season, the existing Rangers will not have any European income.

 

I am also ignoring, for this purpose, the ongoing SPL inquiry into the legitimacy of payments to Rangers players, and the penalties which could be imposed on the club in the event that guilt is established.

 

I am also assuming, for this purpose, that the SFA Judicial Panel investigating Rangers and Mr Whyte for bringing the game into disrepute will neither suspend nor terminate Rangers’ membership of the SFA.

So Where does that Leave Rangers at the Start of Next Season?

 

http://scotslawthoughts.wordpress.com/2012/03/25/rangers-administrators-want-to-rescue-the-club-with-a-share-issue-why-it-wont-work/

 

It would have a squad of players it could not afford. It would need to cut costs drastically. There would be no prospect of a credit line from any bank. Therefore, it would have to run on the income it generated. The Ticketus deal removes the majority of the season ticket income. And all of this has still not paid a penny to the outcome of the Big Tax Case.

 

To escape from administration in a positive way, D&P need funds to put into the pot for a CVA. Even ignoring the HMRC publicly declared policy which leads me to believe they would oppose all but the most generous CVA’s (and by that I mean something like a 90p in the pound deal – which is clearly not going to happen), I see no way in which the existing club can generate money to offer to creditors.

 

In fact even if the Ticketus deal had been unravelled by the court, it would not really help much. Whilst Rangers would get all of its season ticket revenue, it would just have increased the pool of creditors by in excess of £30 million, as Ticketus will look not just for return of its capital investment, but also for its profit, if Rangers breaches the contract.

 

We are looking at a pot of creditors exceeding £100 million.

 

How could Rangers raise a substantial sum? Remember this is existing “oldco” Rangers we are talking about.

 

Some people talk of a sale and lease back of the ground. That, in the present circumstances, would be a huge risk for a buyer. Ibrox’s value lies in it being used as a football stadium. If you are the landlord, you need a football team to play there. Could oldco fund a rental? If oldco disappears, what guarantees are there that a newco will be able to play there?

 

This also ignores potential court battles over the floating charge and the rights of creditors in security over the assets.

 

Therefore oldco Rangers needs many millions of pounds paid into the pot to survive. One or two investors, with huge bank balances, might do so, but generally such people do not get huge bank balances by paying off huge debts other people have run up!

 

This brings us, finally, to a share issue.

 

The last share issue for Rangers failed to generate public support. It seems that the fans viewed it not as a method of improving the club, but instead of paying off Sir David Murray’s debt.

 

How likely is it that a share issue in oldco Rangers would generate from the fans and business community the sums – £50 million, £60 million, £100 million – needed to solve the club’s problems?

 

How many Rangers fans would be willing to invest the large sums needed to pay off tax debt accrued by the Murray and Whyte regimes, together with the other bills due? This would be against the backcloth that the team would be drastically reduced in salary levels, if not necessarily quality, and for at least one year would have no prospect of European income. Paying huge sums to see Rangers survive, but with a massively weakened team, seems something only the most loyal and committed fans would sign up for (and I would compliment such fans for their dedication to the club they support). However, especially in the present economic climate, that is not going to happen in sufficient numbers.

 

Even if a share issue led to an acceptable CVA (which is highly unlikely) this would still leave Group ie Mr Whyte, owning a large number of shares, although diluted by the share issue. He would still be the largest shareholder.

 

Whilst D&P have made rumblings about Mr Whyte no in fact being the owner, due to irregularities in the purchase, then that too would require a long court action. Till then he is still there.

 

As some of the players seem to have had their contracts amended to include a clause entitling them to leave for no fee if Mr Whyte is still in charge, then D&P need to get rid of him too. This can only be achieved by liberal applications of large bags of money. Would Rangers fans be willing to subscribe to a share issue knowing that every penny paid in would go to paying off old debt and also to buying out Mr Whyte? I doubt it.

 

The other alternative with a share issue would be issuing sufficient new shares to a consortium looking to take over the club, to dilute Mr Whyte’s shareholding to a point where the new kids on the block take control. However, as that will have to raise money for the reasons mentioned above, I find it hard to see why anyone with business acumen, even if a Rangers fan through and through, would countenance this.

 

Therefore, as far as I can see, the share issue idea is a dead duck, and, at least as that suggestion is concerned, the Ticketus decision is irrelevant.

 

 

 

What Does the Lack of Prospects of Success of a Share Issue Mean for Oldco Rangers?

 

Put simply, oldco Rangers cannot survive.

 

The company is hopelessly insolvent, and probably would be so even if it was 100% successful in the Big Tax Case!

 

Any “normal” business in these financial straits would have slashed staff the minute the administrators came in, and would have been winding up very soon afterwards.

 

However, in this situation, the most readily realisable assets of the club are players. Therefore, if D&P work out that they can get the club to the summer transfer window and sell some players then, this will increase the pot for creditors. To do so they need continuing support of the fans turning up and paying for admission (although most coming to Ibrox will be doing so on season tickets D&P are honouring).

 

As an aside, it is clear that D&P honoured the season tickets, not out of generosity to the fans, but because of the Ticketus involvement. They could only dishonour season tickets sold by Rangers for Rangers, not those sold by Rangers for Ticketus, and the mayhem caused by refusing admittance to thousands of fans all over the ground would be a cost, in financial and bad PR, which D&P elected not to incur.

 

If Rangers cannot achieve a successful settlement with its creditors, it will be wound up. This can be done by a liquidator or by an administrator, depending on the circumstances. In either event, oldco Rangers will be no more.

 

 

 

NB – If financial wizards, or even sorcerers’ apprentices, can see how this analysis is wrong, then please feel free to comment.

 

 

 

Next post – How Does the Ticketus decision affect sale of the assets of Rangers – some good news for D&P

 

Posted by Paul McConville

[glasgow sheep]

Also reading the RTC blog and staggeringly only one Scottish journalist has got in touch with the author while several English journalists have.  Read more here: http://rangerstaxcase.com/2012/03/24/not-long-to-go/comment-page-1/#comments