Generic Sevco / Rangers meltdown thread

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Originally Posted by doddsy

This was a debt owed by Newco issued because of Oldco's usage of EBT's. The fine is surely owed by Oldco not Newco. The five way agreement is a legal anomaly. If the fine is paid by Newco on because of Oldco's usage of dodgy EBT's then that is a linkage and I would be looking for answers if I was a stiffed creditor of Oldco. It is a legal anomaly that Newco is paying a fine levied on Oldco's EBT usage which was a major issue of them becoming insolvent in the first place.

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The 5 way agreement laid down the conditions for RFC being granted an SFA licence. One of those was that all football debts would be honoured, including any sanction that the SFA/SPFL might impose for EBT use.

The new Rangers regime, under Charles Green, accepted that. IIRC, they also accepted the findings of the tribunal that set the fine (I may have my timings out on that one). It was Dave King that refused to pay the fine, and appealed it. IMO, the judgement yesterday was the only one they could come to, since Green et al had signed that agreement.

Paying football debts to ensure continuing football licences is an anomaly, as you say, but it is one that has never been challenged by any liquidator. Why would they? Reducing the amount of creditors by the amount of football debts actually increases the remaining creditors' share of the pot. It's therefore not in a liquidator's interests to challenge it.

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Originally Posted by grunt

I'm guessing it's a football debt because it's a fine levied by the football authorities for a football related misdemeanour (LNS "inquiry") and not for something under UK law.

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Evading tax is not a football debt. Try telling the taxman that one!

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Originally Posted by doddsy

Why not? It's a very fair argument.

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You've got two different jurisdictions in play here. The creditors, the liquidation were all under UK law. The fine in question has nothing to do with UK law, but is a fine levied by the SPFL for breaching their rules.

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Originally Posted by doddsy

Evading tax is not a football debt. Try telling the taxman that one!

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Jeezo. The fine doesn't have anything to do with evading tax.

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Originally Posted by CropleyWasGod

The 5 way agreement laid down the conditions for RFC being granted an SFA licence. One of those was that all football debts would be honoured, including any sanction that the SFA/SPFL might impose for EBT use.

The new Rangers regime, under Charles Green, accepted that. IIRC, they also accepted the findings of the tribunal that set the fine (I may have my timings out on that one). It was Dave King that refused to pay the fine, and appealed it. IMO, the judgement yesterday was the only one they could come to, since Green et al had signed that agreement.

Paying football debts to ensure continuing football licences is an anomaly, as you say, but it is one that has never been challenged by any liquidator. Why would they? Reducing the amount of creditors by the amount of football debts actually increases the remaining creditors' share of the pot. It's therefore not in a liquidator's interests to challenge it.

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It was Oldco who that used EBT's not Newco and it's not a football debt. But I do have respect for your well made argument CWG.

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Originally Posted by grunt

I'm guessing it's a football debt because it's a fine levied by the football authorities for a football related misdemeanour (LNS "inquiry") and not for something under UK law.

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Aye if it's payable to a club/player/SPFL. Don't know how far it applies Eg if it applies to other employees of club. Its the football business looking after its own.

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Originally Posted by grunt

Jeezo. The fine doesn't have anything to do with evading tax.

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The fine was issued for Oldco's EBT tax avoidance grunt. Why would Newco have to pay that?

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Originally Posted by doddsy

It was Oldco who that used EBT's not Newco and it's not a football debt. But I do have respect for your well made argument CWG.

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Whether or not it's a "football debt" is actually irrelevant. Newco agreed to the sanction, and that's what matters.

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Originally Posted by doddsy

The fine was issued for Oldco's EBT tax avoidance grunt. Why would Newco have to pay that?

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Because they agreed that they would.

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Originally Posted by doddsy

The fine was issued for Oldco's EBT tax avoidance grunt. Why would Newco have to pay that?

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You just accepted CWG's explanation but you wont accept mine even though it's the same? I give up.

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Originally Posted by grunt

You just accepted CWG's explanation but you wont accept mine even though it's the same? I give up.

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I did'nt say I accepted CWG's explanation. I gave CWG respect for making his argument thoughtfully as he always does. Not saying you don't of course.

:aok:

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Originally Posted by doddsy

I did'nt say I accepted CWG's explanation. I gave CWG respect for making his argument thoughtfully as he always does. Not saying you don't of course.

:aok:

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Fairy nuff. I realised after I'd posted that you said you'd respected his argument rather than accepted it.

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Originally Posted by CropleyWasGod

Because they agreed that they would.

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Therein lies my argument. in so much as if I was a stiffed creditor and Newco is seen paying readies for Oldco's actions I would be wanting answers.

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Originally Posted by grunt

Fairy nuff. I realised after I'd posted that you said you'd respected his argument rather than accepted it.

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:thumbsup:

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Originally Posted by doddsy

Therein lies my argument. in so much as if I was a stiffed creditor and Newco is seen paying readies for Oldco's actions I would be wanting answers.

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You didn't read the rest of my post.

If Oldco had taken the fine, that would have reduced the amount available to the other creditors. They're better off by Newco paying it.

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Originally Posted by CropleyWasGod

You didn't read the rest of my post.

If Oldco had taken the fine, that would have reduced the amount available to the other creditors. They're better off by Newco paying it.

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That's an argument CWG. I am still of the opinion that as Newco are paying off a debt caused by Oldco and I was a creditor I would argue the linkage existence and file a writ. It may be an argument
without merit from the Courts but it would certainly put the cat amongst the pigeons. I would also have the written testimony from D King and Bomber Brown stating they are not a new club.

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Originally Posted by doddsy

That's an argument CWG. I am still of the opinion that as Newco are paying off a debt caused by Oldco and I was a creditor I would argue the linkage existence and file a writ. It would be an argument without merit from the Courts but it would certainly put the cat amongst the pigeons. I would also have the written testimony from D King an Bomber Brown stating they are not a new club.

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It's more than an argument, it's fact :greengrin

You would get nowhere with your writ. It's illegal to sue a company in liquidation. To sue a company not in liquidation, to get past first base you would need to show an invoice (to Newco) for the debt. None of Oldco's creditors have that.

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Originally Posted by CropleyWasGod

You would get nowhere. It's illegal to sue a company in liquidation. To sue a company not in liquidation, to get past first base you would need to show an invoice (to Newco) for the debt. None of Oldco's creditors have that.

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Yes I understand that CWG. But therein lies the legal anomaly with the five way agreement. Newco is not liable for Oldco's usage of tax evation/avoidance of EBT's despite them initially agreeing to pay them. You did agree there was a legal anomaly. It's not a football debt.

It is a highly dubious and frankly shocking state of affairs. I'm not saying I'm against RIFC paying out a not insubstantial amount of readies however it stinks to high heaven.

At which point will DK claim that this was an enforced bribe to the SFPL to clear the way to Sevco's registration?

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Originally Posted by doddsy

Yes I understand that CWG. But therein lies the legal anomaly with the five way agreement. Newco is not liable for Oldco's usage of tax evation/avoidance of EBT's despite them initially agreeing to pay them. You did agree there was a legal anomaly. It's not a football debt.

It is a highly dubious and frankly shocking state of affairs. I'm not saying I'm against RIFC paying out a not insubstantial amount of readies however it stinks to high heaven.

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You're not getting this..... a contract was signed that was legally binding on all parties. Therefore it's payable.... and that is what the Courts have just decided. Whether or not the fine is a football debt is irrelevant.

I agreed that the "football debt" was an anomaly in insolvency terms. Once again, it's one that suits the remaining creditors.

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Originally Posted by O'Rourke3

At which point will DK claim that this was an enforced bribe to the SFPL to clear the way to Sevco's registration?

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Good point. Love the badge O'Rourke, used to have one with the two fingers.

I'm aff to enjoy the rest of ma voddy bottle. See you soon peeps. Enjoy the rest of the weekend.

Doddsy

:gwa:

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Originally Posted by O'Rourke3

At which point will DK claim that this was an enforced bribe to the SFPL to clear the way to Sevco's registration?

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Presumably, he offered that argument to the Court.

However, he would be wrong in saying so. At the time the 5 Way Agreement was signed, there was no fine.

I'm a bit confused (again!) .... while related to the EBT's I thought the "fine" was.in relation to they way oldco had registered the players involved rather than the actual use.of the EBT.... ie if they registered the EBT payment element with the SFA at the time then there would have been no case to answer, in footballing terms at least??


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Originally Posted by Just Alf

I'm a bit confused (again!) .... while related to the EBT's I thought the "fine" was.in relation to they way oldco had registered the players involved rather than the actual use.of the EBT.... ie if they registered the EBT payment element with the SFA at the time then there would have been no case to answer, in footballing terms at least??


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That's my understanding too. Some time ago Billy Dodds talked on Radio Scotland about his EBT. He said that the only payment he got was a severance payment of the balance of his contract. While he'd been playing, his payments had come throught the company's PAYE scheme. He got the net amount he was expecting as a one-off so as the amount he received had been declared in his registered contract I'd say the club hadn't commited a football offence in this case.

However, I hope the Supreme Court will decide there should be tax paid on this type of transaction.

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Originally Posted by Just Alf

I'm a bit confused (again!) .... while related to the EBT's I thought the "fine" was.in relation to they way oldco had registered the players involved rather than the actual use.of the EBT.... ie if they registered the EBT payment element with the SFA at the time then there would have been no case to answer, in footballing terms at least??


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The fine was for the usage of the EBT side letters setting out readies loaned and not part of the player's/staff/everybody at Ibrox official contracts which were of course liable for tax while the EBT's were not at that time. Just another tax avoidance scheme used to fool the taxman. Thankfully said taxman is tightening up these greedy barstewards duplicitous schemes.

Anyone else agree that the timing of the fine being paid is suspicious. If it had been ordered be paid several months ago RIFC might not have had the money to add one Billy King who would not then have scored the last minute goal he did just prior to us going on our poor run of form. Might have changed events slightly.

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Originally Posted by doddsy

Anyone else agree that the timing of the fine being paid is suspicious.

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Hasn't been paid yet ....

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Originally Posted by grunt

Hasn't been paid yet ....

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Yes you are 100% correct grunt. It seems it will be sliced off winning the league money instead. If it had been ordered earlier it may have changed events, mibbes aye mibbes naw.

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Originally Posted by doddsy

Yes you are 100% correct grunt. It seems it will be sliced off winning the league money instead. If it had been ordered earlier it may have changed events, mibbes aye mibbes naw.

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Would still have been deducted from whatever money the SPFL were due them.

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Originally Posted by CropleyWasGod

Would still have been deducted from whatever money the SPFL were due them.

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I take your point CWG but it still seems unfair they were allowed to add players like Billy King who gained points on the board for them while they were owed this money to the SPFL no?

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Originally Posted by doddsy

I take your point CWG but it still seems unfair they were allowed to add players like Billy King who gained points on the board for them while they were owed this money to the SPFL no?

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They weren't due it when he signed, though.

Even if they had been, the money would have been found for his wages. That's been the nature of the recent history; they have been able to muddle on with loans from here and there.



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Originally Posted by CropleyWasGod

They weren't due it when he signed, though.

Even if they had been, the money would have been found for his wages. That's been the nature of the recent history; they have been able to muddle on with loans from here and there.



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I was under the impression they have been due this fine since the five way agreement. The time delay has been caused by the SPFL failure to insist on payment surely CWG. It is why I surmise it to be suspicious the Law Lords have only now ruled on it whence the title is all but sewn up.

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Originally Posted by doddsy

I was under the impression they have been due this fine since the five way agreement. The time delay has been caused by the SPFL failure to insist on payment surely CWG. It is why I surmise it to be suspicious the Law Lords have only now ruled on it whence the title is all but sewn up.

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That's not correct.

The LNS enquiry imposed the fine in February 2013. The 5 way agreement was set the previous summer.

As for the delay, initially CG's regime put the bill in a drawer and didn't (wouldn't? couldn't?) pay it. The SPFL then wanted to deduct the fine from what was due to RFC. Dave King's regime didn't accept that it was due, and appealed to the Courts; at that point the SPFL weren't allowed to deduct it as it was subject to legal process.

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Originally Posted by CropleyWasGod

That's not correct.

The LNS enquiry imposed the fine in February 2013. The 5 way agreement was set the previous summer.

As for the delay, initially CG's regime put the bill in a drawer and didn't (couldn't?) pay it. The SPFL then wanted to deduct the fine from what was due to RFC. Dave King's regime didn't accept that it was due, and appealed to the Courts; at that point the SPFL weren't allowed to deduct it as it was subject to legal process.

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Thank you for clearing up the finer details CWG. Co-incidental then that the Law Lords decision fell just a few weeks prior to RIFC winning the league. If their decision had fallen a few months ago it would have meant RIFC being due readies with the Billy King addition being highly controversial, it is why I said it looked at first glance to be suspicious. Mere co-incidence.

Extract from RIFC Annual Report 2015

EBT Fine
In 2012, the SPL raised proceedings against The Rangers Football Club plc (Oldco) in relation to the use of EBTs and
following a hearing in February 2013 a fine of £250,000 and costs of £150,000 were levied against Oldco. As part
the agreement to allow Rangers to participate in Scottish Football, there was a clause inserted where it was agreed
that Rangers would become liable and responsible for the imposition of any sanctions by the SPL for any breach of
SPL Rules and or articles by Oldco/Rangers FC (i.e. the £250,000 fine). The Club believes that the SPFL has, through
documents and actions, waived all and any right it may have had to insist upon payment under the clause, thereby
holding the Club harmless in relation to the sanctions. This is disputed by the SPFL.

Within the current SPFL rules there is a provision (known as the offset rule) whereby if any amounts are due to
the SPFL, the Board of the SPFL are entitled to withhold amounts due to the Club up to the value of the amount
outstanding. The Board of the SPFL have determined that it shall use the offset rule to recover the £250,000 fine
from the Club.

As a result of this decision, the Club has invoked Article 99 of the SFA Articles seeking a determination by an Arbitral
Tribunal appointed by the SFA that the sum is not due to the SPFL. The matter will proceed to full hearing on 29th
and 30th October.

Whilst the Board of Directors based on legal advice are confident that the case will be settled in its favour, should the
Club lose the case, then the Club will be liable for the £250,000 fine plus interest and associated costs.

The above extract gives an outline of what has gone on from RIFC point of view. It would be most interesting to get details of RIFC’s case in support of their statement that “the SPFL has, through documents and actions, waived all and any right it may have had to insist upon payment under the clause, thereby holding the Club harmless in relation to the sanctions.” I wonder who /what was done by the SPFL to give RIFC grounds to support this argument. Or was it just a glib and shamless falsehood? No doubt the SMSM will be beavering away to uncover what went on.:hmmm:

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Originally Posted by Brunswickbill

Extract from RIFC Annual Report 2015

EBT Fine
In 2012, the SPL raised proceedings against The Rangers Football Club plc (Oldco) in relation to the use of EBTs and
following a hearing in February 2013 a fine of £250,000 and costs of £150,000 were levied against Oldco. As part
the agreement to allow Rangers to participate in Scottish Football, there was a clause inserted where it was agreed
that Rangers would become liable and responsible for the imposition of any sanctions by the SPL for any breach of
SPL Rules and or articles by Oldco/Rangers FC (i.e. the £250,000 fine). The Club believes that the SPFL has, through
documents and actions, waived all and any right it may have had to insist upon payment under the clause, thereby
holding the Club harmless in relation to the sanctions. This is disputed by the SPFL.

Within the current SPFL rules there is a provision (known as the offset rule) whereby if any amounts are due to
the SPFL, the Board of the SPFL are entitled to withhold amounts due to the Club up to the value of the amount
outstanding. The Board of the SPFL have determined that it shall use the offset rule to recover the £250,000 fine
from the Club.

As a result of this decision, the Club has invoked Article 99 of the SFA Articles seeking a determination by an Arbitral
Tribunal appointed by the SFA that the sum is not due to the SPFL. The matter will proceed to full hearing on 29th
and 30th October.

Whilst the Board of Directors based on legal advice are confident that the case will be settled in its favour, should the
Club lose the case, then the Club will be liable for the £250,000 fine plus interest and associated costs.

The above extract gives an outline of what has gone on from RIFC point of view. It would be most interesting to get details of RIFC’s case in support of their statement that “the SPFL has, through documents and actions, waived all and any right it may have had to insist upon payment under the clause, thereby holding the Club harmless in relation to the sanctions.” I wonder who /what was done by the SPFL to give RIFC grounds to support this argument. Or was it just a glib and shamless falsehood? No doubt the SMSM will be beavering away to uncover what went on.:hmmm:

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Think it was the transition from SPL to SPFL that RIFC were purporting anomalies which nullified the liability. I could be wrong.

In any case the biggest anomaly was the fine imposed on Newco for Oldco's actions. No legal foundation whatsoever.

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Originally Posted by doddsy

In any case the biggest anomaly was the fine imposed on Newco for Oldco's actions. No legal foundation whatsoever.

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... .. the Courts have just disagreed with you, however. Are they wrong?

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Originally Posted by doddsy

In any case the biggest anomaly was the fine imposed on Newco for Oldco's actions. No legal foundation whatsoever.

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The biggest anomaly was Lord Nimmo Smith's assertion that no sporting advantage was gained by the use of EBT's...........Que??????

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Originally Posted by Spike Mandela

The biggest anomaly was Lord Nimmoo Smith's assertion that no sporting advantage was gained by the use of EBT's...........Que??????

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Agreed :agree:

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Originally Posted by Spike Mandela

The biggest anomaly was Lord Nimmo Smith's assertion that no sporting advantage was gained by the use of EBT's...........Que??????

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That's when you knew we were playing a rigged game. Our football authorities (incl our own R. Petrie) are only concerned with one thing, a successful Rangers back in the top flight. Shameful.

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Originally Posted by CropleyWasGod

... .. the Courts have just disagreed with you, however. Are they wrong?

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I don't think the Law Lords ruled on whether or not Newco is liable for Oldco's debts/actions/liabilities. They ruled on the fact Newco had agreed to shoulder the fine imposed by the then SPL in relation to Oldco's usage of sideletters. It was the agreement issue they ruled on not whether or not the bigger question of should Newco have agreed in the first place to be liable for an Oldco action.

It is one of the many legal anomalies that lie therein which will never be investigated.

It is however unenforcable under the bankruptcy/liquadation rules for a Newco to be held liable for any actions/liabilities by Oldco. Usage of EBT side letters were Oldco actions. If Newco were insistent and appealed it would be found Newco are not liable for Oldco's actions.

It is a red herring issue.

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Originally Posted by doddsy

I don't think the Law Lords ruled on whether or not Newco is liable for Oldco's debts/actions/liabilities. They ruled on the fact Newco had agreed to shoulder the fine imposed by the then SPL in relation to Oldco's usage of sideletters. It was the agreement issue they ruled on not whether or not the bigger question of should Newco have agreed in the first place to be liable for an Oldco action.

.

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... which is what i have been trying to tell you for the last day or so :greengrin

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Originally Posted by doddsy

In any case the biggest anomaly was the fine imposed on Newco for Oldco's actions. No legal foundation whatsoever.

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The fine wasn't imposed on Newco, it was imposed on Oldco.

Newco agreed to take on Oldco's liabilities in respect of football debts in exchange for the transfer of SFA membership from Old to New, ie. they get to pretend to be the same club.

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Originally Posted by JeMeSouviens

The fine wasn't imposed on Newco, it was imposed on Oldco.

Newco agreed to take on Oldco's liabilities in respect of football debts in exchange for the transfer of SFA membership from Old to New, ie. they get to pretend to be the same club.

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Agreed is the key word. They were not liable for any of Oldco's actions/debts/liabllities. Is'nt it nice Newco were able to choose to pay SPL fines whilst stiffing all others.

It is a legal anomaly.

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Originally Posted by CropleyWasGod

... which is what i have been trying to tell you for the last day or so :greengrin

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:thumbsup:

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Originally Posted by doddsy

Agreed is the key word. They were not liable for any of Oldco's actions/debts/liabllities. Is'nt it nice Newco were able to choose to pay SPL fines whilst stiffing all others.

It is a legal anomaly.

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It's not a legal anomaly when one signs a contract, undertaking to pay certain money. A contract which has just been upheld by the Court.

And they didn't "choose" to pay it. They were forced to agree to pay any possible sanction to get their SFA licence.

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Originally Posted by CropleyWasGod

It's not a legal anomaly when one signs a contract, undertaking to pay certain money. A contract which has just been upheld by the Court.

And they didn't "choose" to pay it. They were forced to agree to pay any possible sanction to get their SFA licence.

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Exactly. They were forced to accept it and then chose to contest it.

I hope the costs that they are due to pay are well into six figures.

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Originally Posted by Seveno

I hope the costs that they are due to pay are well into six figures.

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IIRC, the costs of the original hearing were £150k.

However, that will double (or even triple) with the latest hearing.

It's the only bit of this that might cause them some angst. Whilst I expect that they will defer payment for a month or so until ST sales kick in, one can only hope that an anxious lawyer (keen to put the deposit down on that villa in Tuscany for the summer) might slap them with a writ. (Preferably before the end of March, please.)

SPFL Rule I40

The Board may require interest to be paid to the Company and/or to such other Club by such a Club in default on such a sum or sums so due and the balance or balances from time to time outstanding until paid in full, at the rate of 2% above the base lending rate of the Bank of England as same may vary from time to time compounded on the first day of each calendar month and the Board shall be entitled to apply any sums which, under these Rules, would otherwise be payable to the defaulting Club by the Company in discharge of any interest so payable by such Club in default to the Company and/or such other Club in such manner as the Board shall determine.

I'm sure that one of our accountancy experts can give us a quick estimate of interest charges to be levied on top of costs. £££££££££££££££££££££££££££££££££££££

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Originally Posted by Brunswickbill

SPFL Rule I40

The Board may require interest to be paid to the Company and/or to such other Club by such a Club in default on such a sum or sums so due and the balance or balances from time to time outstanding until paid in full, at the rate of 2% above the base lending rate of the Bank of England as same may vary from time to time compounded on the first day of each calendar month and the Board shall be entitled to apply any sums which, under these Rules, would otherwise be payable to the defaulting Club by the Company in discharge of any interest so payable by such Club in default to the Company and/or such other Club in such manner as the Board shall determine.

I'm sure that one of our accountancy experts can give us a quick estimate of interest charges to be levied on top of costs. £££££££££££££££££££££££££££££££££££££

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Good spot.

Just over £20k I reckon.

At Budge-rates, it would have been about £55k :cb

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Originally Posted by CropleyWasGod

It's not a legal anomaly when one signs a contract, undertaking to pay certain money. A contract which has just been upheld by the Court.

And they didn't "choose" to pay it. They were forced to agree to pay any possible sanction to get their SFA licence.

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The legal anomaly is of course the overriding factor that Newco agreed to pay Oldco's fine. The anomaly being if Newco is held accountable for one of Oldco's debts/sanctions regardless of it being a 'football' debt is laughable. Why would a Court of Law differentiate between a so called 'football debt' or any other debt.

The legal anamoly remains the same in that Newco is not liable for Oldco. The rest of the argument is a lawyer would put it 'irrelevant'.

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Originally Posted by doddsy

The legal anomaly is of course the overriding factor that Newco agreed to pay Oldco's fine. The anomaly being if Newco is held accountable for one of Oldco's debts/sanctions regardless of it being a 'football' debt is laughable. Why would a Court of Law differentiate between a so called 'football debt' or any other debt.

The legal anamoly remains the same in that Newco is not liable for Oldco. The rest of the argument is a lawyer would put it 'irrelevant'.

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As ever, in situations like this, I revert to what the law says:-

"A contract is an agreement between two or more parties which creates or intends to create legally binding obligations between the parties to it."


That's what happened in this case. And that contract was upheld by the Courts.

I'm not a lawyer, so I'll leave it at that. However, if you have an alternative opinion to the Law of Contract, and the learned m'luds.... Dave King might want to hear from you. :greengrin

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Originally Posted by doddsy

The legal anomaly is of course the overriding factor that Newco agreed to pay Oldco's fine. The anomaly being if Newco is held accountable for one of Oldco's debts/sanctions regardless of it being a 'football' debt is laughable. Why would a Court of Law differentiate between a so called 'football debt' or any other debt.

The legal anamoly remains the same in that Newco is not liable for Oldco. The rest of the argument is a lawyer would put it 'irrelevant'.

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Can I point out that the decision that Newco has to pay the Oldco fine was not made in a court of law. It was the decision of an SFA tribunal which happens to consist of three judges. That doesn't affect the main point however.

The tribunal did not rule that Newco is legally liable for any or all of Oldco's debts. It ruled that Newco had voluntarily signed a contract to pay for Oldco's football debts and had to honour that contract. There's no legal anomaly in requiring someone to stick to the details of a contract they've agreed to. The only legal anomaly that could be introduced would occur if a company could weasel out of a contract at a later date because a company official didn't like terms agreed to by his predecessor.

Do you think that Rangers supporters repaying some of Oldco's debts to small creditors was also an anomaly? That looks to me like one of the few honourable actions by anyone involved in the saga.

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Originally Posted by ballengeich

Do you think that Rangers supporters repaying some of Oldco's debts to small creditors was also an anomaly?

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Hardly an anomaly - Hearts fans did exactly the same thing, didn't they?

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Originally Posted by ballengeich

Can I point out that the decision that Newco has to pay the Oldco fine was not made in a court of law. It was the decision of an SFA tribunal which happens to consist of three judges. That doesn't affect the main point however.

The tribunal did not rule that Newco is legally liable for any or all of Oldco's debts. It ruled that Newco had voluntarily signed a contract to pay for Oldco's football debts and had to honour that contract. There's no legal anomaly in requiring someone to stick to the details of a contract they've agreed to. The only legal anomaly that could be introduced would occur if a company could weasel out of a contract at a later date because a company official didn't like terms agreed to by his predecessor.

Do you think that Rangers supporters repaying some of Oldco's debts to small creditors was also an anomaly? That looks to me like one of the few honourable actions by anyone involved in the saga.

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Is it fair to the stiffed creditors of Oldco that Newco can sign a contract arranging to pay debts attached to Oldco whether football related debt or not?

Any footballing or any debt for that matter owed by Oldco should of course be nothing whatsoever to do with Newco. It is a definite anomaly created by the SPL/SPFL and Newco to be seen paying off specific debt owed by Oldco. I think we can all agree it is an anomaly created by the footballing authorities in order to suggest a linkage of Old/New Club.

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Originally Posted by lapsedhibee

Hardly an anomaly - Hearts fans did exactly the same thing, didn't they?

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Surely credit is due to supporters of these clubs who were unhappy at the financial mess who tried to alleviate some of the creditors suffering caused by greedy barstewards like Romanov and David Murray.:aok:

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Originally Posted by doddsy

Is it fair to the stiffed creditors of Oldco that Newco can sign a contract arranging to pay debts attached to Oldco whether football related debt or not?

Any footballing or any debt for that matter owed by Oldco should of course be nothing whatsoever to do with Newco. It is a definite anomaly created by the SPL/SPFL and Newco to be seen paying off specific debt owed by Oldco. I think we can all agree it is an anomaly created by the footballing authorities in order to suggest a linkage of Old/New Club.

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As I have already said, it's in the interests of the "stiffed creditors" to have the football debts paid by someone else.

As for the "anomaly created by the SPL/SPFL and Newco", that's not correct. The FA and Premier League in England have had the "football creditors" provisions in place for 15 or so years. HMRC have tried to challenge them, but the Courts in England have rejected their case. The SFA and Insolvency Practitioners in Scotland have merely followed the FA's lead..... in this case, and that of Hearts too.

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Originally Posted by doddsy

Is it fair to the stiffed creditors of Oldco that Newco can sign a contract arranging to pay debts attached to Oldco whether football related debt or not?

It was extremely favourable to football debtors who got money they wouldn't otherwise have received. Other creditors didn't lose out as a result so no - it's not unfair.

Any footballing or any debt for that matter owed by Oldco should of course be nothing whatsoever to do with Newco. It is a definite anomaly created by the SPL/SPFL and Newco to be seen paying off specific debt owed by Oldco. I think we can all agree it is an anomaly created by the footballing authorities in order to suggest a linkage of Old/New Club.

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Here I agree with you. The suits at the SFA and SPFL believe that their only valuable marketing asset is the Old Firm. Their principal motivation was fear of the consequences for commercial deals (and their own salaries). The transfer of Rangers membership to the new company shouldn't have happened as it is only supposed to be allowed in the event of a solvent reconstruction of the business.

The old/new club debate has gone on for so long because club has different meanings in different contexts. For football authorities it's the same club because the membership number still exists. (That introduces the notion that the current Airdrieonians is the same club as Clydebank, which neither set of supporters would accept).

At the recent hearing on Green's claim for defence expenses it was made quite clear by the law lords that the law only concerns itself with companies. The concept of a club which exists separately and somehow continues has no legal foundation - it's a metaphysical idea. In fact, companies which operate football businesses aren't clubs at all as a club is an unincorporated group of individuals.

For fans the metaphysical idea is the emotionally important one. I don't support Hibs as a company and don't care about the SFA membership number. Quite what the identity is that I can get so happy or upset about I can't actually define. Unfortunately, the only member of Edinburgh Uni's philosophy department whom I know isn't a football fan.

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Originally Posted by CropleyWasGod

As I have already said, it's in the interests of the "stiffed creditors" to have the football debts paid by someone else. As for the "anomaly created by the SPL/SPFL and Newco", that's not correct. The FA and Premier League in England have had the "football creditors" provisions in place for 15 or so years. HMRC have tried to challenge them, but the Courts in England have rejected their case. The SFA and Insolvency Practitioners in Scotland have merely followed the FA's lead.

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It would be helpful to have sight of the argument the FA and Premier League presented as to how Football Creditors should be treated differently from ordinary creditors. Seems a certain anomaly.

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Originally Posted by doddsy

It would be helpful to have sight of the argument the FA and Premier League presented as to how Football Creditors should be treated differently from ordinary creditors. Seems a certain anomaly.

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I'm sure you could find it online. There's certainly been plenty written about it.

IIRC, the Exeter City case was the one where HMRC challenged it.

From memory, it was accepted by the Courts that, without the FC Rule, clubs would fail as a result of other clubs being unable to pay them. A domino-effect would result, leaving the game in disarray. However, don't take my word of it.... the Court transcript will be out there.

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Originally Posted by CropleyWasGod

I'm sure you could find it online.

IIRC, the Exeter City case was the one where HMRC challenged it.

From memory, it was accepted by the Courts that, without the FC Rule, clubs would fail as a result of other clubs being unable to pay them. A domino-effect would result, leaving the game in disarray. However, don't take my word of it.... the Court transcript will be out there.

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Cheers. :aok:

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Originally Posted by doddsy

It would be helpful to have sight of the argument the FA and Premier League presented as to how Football Creditors should be treated differently from ordinary creditors. Seems a certain anomaly.

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They were not treated any differently in the insolvency event, it was afterwards.

There is nothing to stop a third party covering the losses of some parties after an insolvency event. Some been for reimbursed the cash that Hearts stole from the poppy people.

The SFA insisted on The Rangers paying oldco's football debts as a condition of them taking the vacant place in the SFL. The Rangers agreed to do this. This is a valid contract.

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Originally Posted by jgl07

They were not treated any differently in the insolvency event, it was afterwards.

There is nothing to stop a third party covering the losses of some parties after an insolvency event. Some been for reimbursed the cash that Hearts stole from the poppy people.

The SFA insisted on The Rangers paying oldco's football debts as a condition of them taking the vacant place in the SFL. The Rangers agreed to do this. This is a valid contract.

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The SFA knew for a fact Newco were not liable for any of Oldco's debts, football one's or otherwise. Ballengeich explains it very well in that it was merely the SFA seeking linkage of Old Club and New Club. It is simply that.

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Originally Posted by doddsy

The SFA knew for a fact Newco were not liable for any of Oldco's debts, football one's or otherwise. Ballengeich explains it very well in that it was merely the SFA seeking linkage of Old Club and New Club. It is simply that.

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Think you have misunderstood his post. Also don't think that you have researched the football creditors rules,as I suggested.

The SFA applied those rules in the Rangers case, as they did with Hearts, Dundee and Livi.

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Originally Posted by CropleyWasGod

Think you have misunderstood his post. Also don't think that you have researched the football creditors rules,as I suggested.

The SFA applied those rules in the Rangers case, as they did with Hearts, Dundee and Livi.

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As they say back of the net !

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Originally Posted by CropleyWasGod

Think you have misunderstood his post. Also don't think that you have researched the football creditors rules,as I suggested.

The SFA applied those rules in the Rangers case, as they did with Hearts, Dundee and Livi.

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The key word is 'liability'.

It is a fact of law that Newco is not, never will be, never was, 'liable', for any of Oldco's debts/fines/actions.

The contract agreed with Charles Green and the SPL would'nt stand up on appeal if DK had been serious in challenging it.

It is a spurious contract as it was as you say a 'Voluntary' one not a 'Liability'.

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Originally Posted by doddsy

The key word is 'liability'.

It is a fact of law that Newco is not, never will be, never was, 'liable', for any of Oldco's debts/fines/actions.

The contract agreed with Charles Green and the SPL would'nt stand up on appeal if DK had been serious in challenging it.

It is a spurious contract as it was as you say a 'Voluntary' one not a 'Liability'.

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A fact of law? Which law? The one that was established by the case that HMRC raised against the FA, and lost? Or another one?

And...DK did appeal against the tribunal decision. He lost.

I don't think that you want to take me on on the meaning of the word "liability ".[emoji6]
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Originally Posted by CropleyWasGod

A fact of law? Which law? The one that was established by the case that HMRC raised against the FA, and lost? Or another one?

And...DK did appeal against the tribunal decision. He lost.

I don't think that you want to take me on on the meaning of the word "liability ".[emoji6]
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Newco is not, never will be, never was, 'liable', for a single debt/fine/action by Oldco. That is a fact of 'Company Law'.

Just for the record, I am not 'taking anyone on' CWG,

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Originally Posted by doddsy

Newco is not, never will be, never was, 'liable', for a single debt/fine/action by Oldco. That is a fact of 'Company Law'.

Just for the record, I am not 'taking anyone on' CWG,

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What part of Company Law?



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Originally Posted by doddsy

Surely credit is due to supporters of these clubs who were unhappy at the financial mess who tried to alleviate some of the creditors suffering caused by greedy barstewards like Romanov and David Murray.:aok:

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I would be more inclined to offer credit if I suspected that honour and dignity were the reasons that some debts were paid. Sadly I remain convinced that it is more total and utter embarrassment that was the driving force for invoices like the one from the poppy fund to be settled.

I’m with CWG.

SPFL Rule I38 states

“If any Club defaults in making payment of any sum or sums due to the Company and/or to another Club the Board shall be entitled to apply any sums which, including in terms of Rules and/ or the Articles, would otherwise be payable to the defaulting Club by the Company in discharge of any debt due by such Club in default to the Company and/or such other Club in such manner as the Board shall determine.”

This has been applied to clubs that went into administration but remained as the same entity, Hearts, Dundee, Dunfermline for example. It seems to me perfectly reasonable for the SPFL to have said to SEVCO that, if they wanted to be readmitted as RIFC, then they would have to accept that this rule would apply to them. They agreed to this condition in the 5 way agreement. If they hadn’t agreed to the terms of the 5 Way Agreement they might not exist as a football club in the SPFL. They have contested it through the appeal process of the SPFL and have been found to be liable for payment of the fine.

However they still have the option of appealing to The Court of Arbitration for Sport so if RIFC think that they have a case they can take it further let’s wait and see. FIFA likes to keep fitba business out of the national courts (I wonder why) but in the final event GASL could take it even further, he clearly has experience of such legal institutions.

Don’t see the point of Hibs netters falling out over this.

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Originally Posted by Brunswickbill

I’m with CWG.

SPFL Rule I38 states

“If any Club defaults in making payment of any sum or sums due to the Company and/or to another Club the Board shall be entitled to apply any sums which, including in terms of Rules and/ or the Articles, would otherwise be payable to the defaulting Club by the Company in discharge of any debt due by such Club in default to the Company and/or such other Club in such manner as the Board shall determine.”

This has been applied to clubs that went into administration but remained as the same entity, Hearts, Dundee, Dunfermline for example. It seems to me perfectly reasonable for the SPFL to have said to SEVCO that, if they wanted to be readmitted as RIFC, then they would have to accept that this rule would apply to them. They agreed to this condition in the 5 way agreement. If they hadn’t agreed to the terms of the 5 Way Agreement they might not exist as a football club in the SPFL. They have contested it through the appeal process of the SPFL and have been found to be liable for payment of the fine.

However they still have the option of appealing to The Court of Arbitration for Sport so if RIFC think that they have a case they can take it further let’s wait and see. FIFA likes to keep fitba business out of the national courts (I wonder why) but in the final event GASL could take it even further, he clearly has experience of such legal institutions.

Don’t see the point of Hibs netters falling out over this.

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I'm not falling out with fellow Hibs netters Brunswickbill. I still think I am entirely correct to say if it did appear before a Court of Law it would be dismissed as Newco is not liable for Oldco. However this particular opinion seems to be particularly controversial so I am going to leave it at that for now. It is still my opinion and it is not going to be changed so I hope others will respect that position.

:greengrin

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Originally Posted by doddsy

I'm not falling out with fellow Hibs netters Brunswickbill. I still think I am entirely correct to say if it did appear before a Court of Law it would be dismissed as Newco is not liable for Oldco. However this particular opinion seems to be particularly controversial so I am going to leave it at that for now. It is still my opinion and it is not going to be changed so I hope others will respect that position.

:greengrin

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I respect your opinion.

However :-

The English legal system
The Scottish legal system
The FA
The SFA
The administrators and liquidators of every insolvent Scottish and English club over the last 15 or so years.

..all have the opposite opinion to you.

I'm not a lawyer, but I know what would be more persuasive to me.

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Originally Posted by CropleyWasGod

I respect your opinion.

However :-

The English legal system
The Scottish legal system
The FA
The SFA
The administrators and liquidators of every insolvent Scottish and English club over the last 15 or so years.

..all have the opposite opinion to you.

I'm not a lawyer, but I know what would be more persuasive to me.

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Thank you CWG for respecting my position.

On the basis that the oldco company is in liquidation how is the newco company in any way responsible for the oldco companies debts/actions?

It would be nice to be enlightened please.

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Originally Posted by doddsy

Newco is not, never will be, never was, 'liable', for a single debt/fine/action by Oldco. That is a fact of 'Company Law'.

Just for the record, I am not 'taking anyone on' CWG,

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The SFA and SPFL are membership clubs, like a golf club.

If you want to be a member you abide by the rules.

I you want to be a member of the SFA and SPFL then you agree to be bound by, amongst others, the football debts rule.

No other rules or laws currently contradict this.

Not everyone agrees with this, as stated HMRC being one, but at present that's the way things are.

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Originally Posted by doddsy

Thank you CWG for respecting my position.

On the basis that the oldco company is in liquidation how is the newco company in any way responsible for the oldco companies debts/actions?

It would be nice to be enlightened please.

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It's responsible for the football debts, which has been established by case law (the HMRC case in the Exeter administration that I mentioned earlier).

Those have been paid AFAIK.

It's also responsible for the fine on Oldco. It's not clear to me whether that falls under the description of football debt. (The SFA doesn't define them. The FA does, but they're not clear). However, Newco did undertake to pay that fine. That undertaking has been found to be legal, and the fine payable, by the Court.

Other than those debts, Newco has no responsibility for the debts of Oldco.

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Originally Posted by CropleyWasGod

It's responsible for the football debts, which has been established by case law (the HMRC case in the Exeter administration that I mentioned earlier).

Those have been paid AFAIK.

It's also responsible for the fine on Oldco. It's not clear to me whether that falls under the description of football debt. (The SFA doesn't define them. The FA does, but they're not clear). However, Newco did undertake to pay that fine. That undertaking has been found to be legal, and the fine payable, by the Court.

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Administration is not liquidation.

They may have agreed to pay it in order to satisfy the SPL however Newco was not initially liable.

Just pointing out some contentious points CWG.

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Originally Posted by doddsy

Administration is not liquidation.

They may have agreed to pay it in order to satisfy the SPL however Newco was not initially liable.

Just pointing out some contentious points CWG.

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It's irrelevant that it was administration. The case was pursued by HMRC to establish the legality of football debts. They lost.

The principle of football debt was therefore enshrined in case law. That will continue until such times as someone else puts up a better case and has that overturned.

As a result of that case law, Newco's football debt is due by Oldco.

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Originally Posted by Jack

The SFA and SPFL are membership clubs, like a golf club.

If you want to be a member you abide by the rules.

I you want to be a member of the SFA and SPFL then you agree to be bound by, amongst others, the football debts rule.

No other rules or laws currently contradict this.

Not everyone agrees with this, as stated HMRC being one, but at present that's the way things are.

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Fair enough, however the footall debts rules may be incompatible with bankruptcy/liquidation company law and are there to be challenged in a court of law if DK had been serious as to challenging them.

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Originally Posted by doddsy

Fair enough, however the footall debts rules may be incompatible with bankruptcy/liquidation company law and are there to be challenged in a court of law if DK had been serious as to challenging them.

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He did.

He lost.

Just as HMRC did.

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Originally Posted by CropleyWasGod

He did.

He lost.

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Fair enough, unfortunately I seem to have found myself defending DK's position on trying to get out of forking out readies. It is not something I am proud of so I will leave it now.

:flag:

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Originally Posted by CropleyWasGod

It's irrelevant that it was administration. The case was pursued by HMRC to establish the legality of football debts. They lost.

The principle of football debt was therefore enshrined in case law. That will continue until such times as someone else puts up a better case and has that overturned.

As a result of that case law, Newco's football debt is due by Oldco.

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I will over the next week or two when I have the time of course look over the aspects of the case you refer to CWG. Not with the aim of proving anyone wrong or I'm right or any bs. Just simply to have a look at the basis of this interesting matter.

Cheers Doddsy.:thumbsup:

Interesting as the discussion on legality may be, I think that it would be interesting to see a record of the appeal. What "documents and actions" from the SPFL would lead RIFC to claim "that the SPFL has waived all and any right it may have had to insist upon payment under the clause, thereby
holding the Club harmless in relation to the sanctions. This is disputed by the SPFL." If you are looking for a conspiracy then it seems to me that you have the makings of one here.

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Originally Posted by Brunswickbill

Interesting as the discussion on legality may be, I think that it would be interesting to see a record of the appeal. What "documents and actions" from the SPFL would lead RIFC to claim "that the SPFL has waived all and any right it may have had to insist upon payment under the clause, thereby
holding the Club harmless in relation to the sanctions. This is disputed by the SPFL." If you are looking for a conspiracy then it seems to me that you have the makings of one here.

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I'm sure there will be a Court transcript out there somewhere.

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Originally Posted by CropleyWasGod

I'm sure there will be a Court transcript out there somewhere.

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Isn't it an SFA Tribunal albeit comprising 3 High Court judges. So I doubt if the proceedings will be public. Hope I'm mistaken.

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Originally Posted by Brunswickbill

Isn't it an SFA Tribunal albeit comprising 3 High Court judges. So I doubt if the proceedings will be public. Hope I'm mistaken.

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Yeah, you're right. So many cases etc etc :greengrin

One would have hoped, though, in the interests of transparency....:rolleyes:

This is the worst John Grisham novel ever (and that's saying something).

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Originally Posted by doddsy

I will over the next week or two when I have the time of course look over the aspects of the case you refer to CWG. Not with the aim of proving anyone wrong or I'm right or any bs. Just simply to have a look at the basis of this interesting matter.

Cheers Doddsy.:thumbsup:

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Really enjoyed this exchange but you're not like a dog with a bone rather like a dog that thinks it has a bone :greengrin

Conflating two things to give the King and Sevco an undeserved 'blow' job :wink:

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Originally Posted by malcolm

Really enjoyed this exchange but you're not like a dog with a bone rather like a dog that thinks it has a bone :greengrin

Conflating two things to give the King and Sevco an undeserved 'blow' job :wink:

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Sums up the last few pages rather well.

http://www.dailyrecord.co.uk/news/sc...cQmC1RZXrdG.97


According to the Weegie rag, Hector is going after tax on the EBT money.

I won't hold my breath for any results.

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Originally Posted by greenginger

http://www.dailyrecord.co.uk/news/sc...cQmC1RZXrdG.97


According to the Weegie rag, Hector is going after tax on the EBT money.

I won't hold my breath for any results.

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It's the only logical thing to do. There was never any intention of repayment so these sums aren't loans but lump sum payments and are therefore taxable.

If HMRC go after the players and the players have a letter from the club promising to cover any liability and Rangers don't then is that not a football debt and a remuneration default?
The players deal is with the club?


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My take on the latest headline.

When an employer is in default of PAYE regulations, it's the employer's responsibility to cough up the tax etc. That holds, even where the employee has gained. In RFC's case, the current position (albeit, to be challenged once more) is that they are liable for everything.

That said, if HMRC can prove that there was collusion between employer and employee, then the recipients have a problem.

IMO, though, the stuff about new regulations coming in is irrelevant. That can only apply to new cases, and not ones that existed previously.

If some of the EBT benefitting players are landed with a tax bill and they have a letter from the Club ( Oldco Rangers ) promising to cover their liabilities then , because of the football creditors rule and the 5-way agreement promising that Newco Rangers would cover the Oldco football creditors , it could just be that some bills arrive at the door of Rangers 2012 formerly known as Sevco Ltd.

We can but hope ! :agree:

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Originally Posted by greenginger

If some of the EBT benefitting players are landed with a tax bill and they have a letter from the Club ( Oldco Rangers ) promising to cover their liabilities then , because of the football creditors rule and the 5-way agreement promising that Newco Rangers would cover the Oldco football creditors , it could just be that some bills arrive at the door of Rangers 2012 formerly known as Sevco Ltd.

We can but hope ! :agree:

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There's so many "if's" in that scenario....:greengrin... it would take years to sort out, probably through the Courts. Again.

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Originally Posted by Ozyhibby

If HMRC go after the players and the players have a letter from the club promising to cover any liability and Rangers don't then is that not a football debt and a remuneration default?
The players deal is with the club?


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Be interesting to see all the leg ends of the now defunct Glasgow rangers running to the new team to get them to indemnify them and the new team to say we can't because we're not that team any more. [emoji1]

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Originally Posted by CropleyWasGod

There's so many "if's" in that scenario....:greengrin... it would take years to sort out, probably through the Courts. Again.

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Maybe, but could cause problems for the new entity in a shorter time scale.

Player gets notice of tax due from HMRC.

Player digs out letter of indemnity from Oldco and informs SFA/SPFL he considers himself a football creditor to be reimbursed by Newco Rangers.

Accountants have to put a note of contingent liability and Going Concern warning on end of year accounts.

This could result in refusal of UEFA License. Result, much nashing of teeth and burning of effigies of former heroes down Govan way.

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Originally Posted by greenginger

Maybe, but could cause problems for the new entity in a shorter time scale.

Player gets notice of tax due from HMRC.

Player digs out letter of indemnity from Oldco and informs SFA/SPFL he considers himself a football creditor to be reimbursed by Newco Rangers.

Accountants have to put a note of contingent liability and Going Concern warning on end of year accounts.

This could result in refusal of UEFA License. Result, much nashing of teeth and burning of effigies of former heroes down Govan way.

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Brilliant :greengrin

Someone mentioned John Grisham earlier. I think this saga is more Dostoevsky. Crime and (some) Punishment.