Generic Sevco / Rangers meltdown thread

[CropleyWasGod]

Okay, back of a fag packet calculations here:-

£15m for the period since CW took over.

According to the BBC, £4m for the Ticketus VAT has been paid.

£4m for the wee tax case

I have roughtly estimated £2.5m for the VAT on walk-ups and away supporters. (calculations available on request )

Which leaves £8.5m for PAYE & NI.

Approx £1m per month!!

[Golden Bear]

Gordon Smith to leave Rangers according to Radio Scotland. No other details at this stage.

[GordonR]

Sacked by the administrators, says my source at BBC Scotland. Him and Director of Operations Ali Russell.

[ancienthibby]

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Gordon Smith to leave Rangers according to Radio Scotland. No other details at this stage.

Someone else called Ali Russell also leaving!

The axe is swinging

[Andy74]

Smith's statement is great. Was never allowed to do any of the things in his remit.

I reckon this Whyte thing might just save Rangers actually. It's going to be presented that they've been the victim of a scammer.

[Spike Mandela]

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Smith's statement is great. Was never allowed to do any of the things in his remit.

I reckon this Whyte thing might just save Rangers actually. It's going to be presented that they've been the victim of a scammer.

Certainly the angle I believe Alistair Johnstone is trying to push.

[Spike Mandela]

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Gordon Smith to leave Rangers according to Radio Scotland. No other details at this stage.

How long before he turns up as a bbc pundit. Default job of those on the merry go round.

[CropleyWasGod]

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Smith's statement is great. Was never allowed to do any of the things in his remit.

I reckon this Whyte thing might just save Rangers actually. It's going to be presented that they've been the victim of a scammer.

Even so, Andy, with £15m of current tax debt, and £49m potential.... not to mention £24m down on income.... sentiment isn't going to help them trade out of it.

[Andy74]

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Even so, Andy, with £15m of current tax debt, and £49m potential.... not to mention £24m down on income.... sentiment isn't going to help them trade out of it.

Good.

[steakbake]

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How long before he turns up as a bbc pundit. Default job of those on the merry go round.

I usually go through life with a bit of grudging tolerance of my fellow man.

Not him though. He's a welt. He's like a jobbie that won't flush.

[TornadoHibby]

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Don't agree

RFC Group owe RFC £24m... the Ticketus money that wasn't passed on. RFC owe RFCG £18m...... what they paid Lloyds. Net effect is that RFC are owed £6m.

There is no creditor IMO.

That will depend upon the terms of the documentation for each advance and it is perfectly possible that "set off" may not be permissable as a result!

If he was following and implementing advice from the army of corporate finance and legal advisors he had appointed pre acquisition of RFC from Murray then you would imagine that this would have been done to protect their client, CW?

That may well be why there is a feeling that CW is the largest creditor!

[Seveno]

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That will depend upon the terms of the documentation for each advance and it is perfectly possible that "set off" may not be permissable as a result!

If he was following and implementing advice from the army of corporate finance and legal advisors he had appointed pre acquisition of RFC from Murray then you would imagine that this would have been done to protect their client, CW?

That may well be why there is a feeling that CW is the largest creditor!

Do we have any evidence host he had all these experts behind him though ? All Delboy had was Rodney.

[stokesmessiah]

http://www.bbc.co.uk/news/uk-scotland-17146506

[CropleyWasGod]

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That will depend upon the terms of the documentation for each advance and it is perfectly possible that "set off" may not be permissable as a result!

If he was following and implementing advice from the army of corporate finance and legal advisors he had appointed pre acquisition of RFC from Murray then you would imagine that this would have been done to protect their client, CW?

That may well be why there is a feeling that CW is the largest creditor! Which

What advances are these ?

RFCG paid off LBG

Ticketus bought season tickets

[stokesmessiah]

And the plot thickens even further (is that even possible now).

http://news.stv.tv/scotland/west-cen...dministrators/

[TornadoHibby]

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What advances are these ?

RFCG paid off LBG

Ticketus bought season tickets

The two between RFC and RFCG that you noted in the post to which I commented?!

[CropleyWasGod]

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The two between RFC and RFCG that you noted in the post to which I commented?!

Neither of these are advances though. One wad paying off borrowings. The other was the sale of season tickets.

Whilst I accept that one might call the former an advance ....the second is definitely not.

[Brando7]

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And the plot thickens even further (is that even possible now).

http://news.stv.tv/scotland/west-cen...dministrators/

They have obviously found something that they feel is illegal

Lovin every minute of this

[Seveno]

Not even Vlad has ever given us this day by day, almost hour by hour, amusement. David Murray should hand his knighthood over to CW - for services to comedy.

[TornadoHibby]

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Neither of these are advances though. One wad paying off borrowings. The other was the sale of season tickets.

Whilst I accept that one might call the former an advance ....the second is definitely not.

Looks like we're back to double entry accounting then?!

The receipt of the Ticketus cash into the holding company creates a loan from RFC to the holding company!

The repayment of the LBG loan of £18million creates a loan to RFC from the holding company!

Now for CW (through the holding company) to be the largest creditor of RFC, the two loans would need to be specifically separated by appropriate documentation so that 'set off' of the creditor in RFC (the £18m) cannot be reduced to £nil by offsetting against the RFC debtor (amount due by the holding company - the Ticketus cash) I think!

Does that help to make my 'point' clearer?

[Viva_Palmeiras]

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How long before he turns up as a bbc pundit. Default job of those on the merry go round.

Total conflict of interest is he still not agent as is/was our fave "biscuits"

[IWasThere2016]

Having met Gordon Smith recently, I have to say he was a really nice guy.

[CropleyWasGod]

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Looks like we're back to double entry accounting then?!

The receipt of the Ticketus cash into the holding company creates a loan from RFC to the holding company!

The repayment of the LBG loan of £18million creates a loan to RFC from the holding company!

Now for CW (through the holding company) to be the largest creditor of RFC, the two loans would need to be specifically separated by appropriate documentation so that 'set off' of the creditor in RFC (the £18m) cannot be reduced to £nil by offsetting against the RFC debtor (amount due by the holding company - the Ticketus cash) I think!

Does that help to make my 'point' clearer?

The floating charge that RFCG have over the assets of RFC.... which is of course the important point in all of this.... is over all sums due by RFC to RFCG.

Even the most rudimentary of financial management would conclude that RFCG owe RFC £6m. Any attempt by the administrators or RFCG to enforce the charge (in favour of the £18m) would be resisted by HMRC and the other creditors, and rightly so IMO.

[TornadoHibby]

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The floating charge that RFCG have over the assets of RFC.... which is of course the important point in all of this.... is over all sums due by RFC to RFCG.

Even the most rudimentary of financial management would conclude that RFCG owe RFC £6m. Any attempt by the administrators or RFCG to enforce the charge (in favour of the £18m) would be resisted by HMRC and the other creditors, and rightly so IMO.

Not sure if you are correct in your assertion that 'any idiot would know ....' without knowing the precise terms under which these transactions took place!

The net effect on paper might be £6m but in legal terms in an insolvency situation it might not just be as straightforward!

Lawyers for and against might just have a field day over something like this!

[SteveHFC]

http://www.express.co.uk/posts/view/...o-save-Rangers

[blindsummit]

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http://www.express.co.uk/posts/view/...o-save-Rangers

That's a lot of benefit cheques.

[wazoo1875]

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http://www.express.co.uk/posts/view/...o-save-Rangers

“There is a clear view that anyone who comes into Rangers now must leave their giro at the door."

;-)

[CropleyWasGod]

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That's a lot of benefit cheques.

The phrase "throwing a sausage into the Clyde Tunnel" springs to mind.

[Spike Mandela]

http://scotslawthoughts.wordpress.com/

These are not my comments but from the blogger above discussing Duff and Phelps statement...............


The D&P statement is in bold with my comments beneath in plain text.

DUFF*and Phelps, administrators of Rangers Football Club, today (Wednesday 22nd February) issued the following statement.

David Whitehouse, joint administrator said, “The Rangers fans have been absolutely tremendous over the last 10 days and it’s vital to the administration process that we continue to receive the support we have had thus far.

“Ibrox was sold out last Saturday and hopefully that can be the case for the rest of the season. The fans are clearly extremely loyal to Rangers and by coming to matches at Ibrox they are directly contributing to the Club’s future.

As I have pointed out before, in almost every administration of a football club I can recall, the administrators have not honoured the season tickets. Season ticket holders have paid for their seats “up front”. Legally therefore they are creditors of the insolvent company. The value of their remaining part of the season ticket falls to be a claim in the insolvency, should they choose to make it of course. It could be argued that an unfair preference is being given to the season ticket holders by the administrators. How many other suppliers are being paid for pre-administration debts?

If the interest is to have the fans “directly contributing” to the Club’s future, then surely the fans would understand why their season tickets were now void, and would not begrudge paying again at the door for tickets? Whilst the extra costs would undoubtedly be difficult for some fans to meet, it would be a test of loyalty to the team.

At Motherwell, Dundee and Livingston, for example, the buckets and collection tins were out, and the season ticket holders paid on the gate for entrance.

Rangers’ administrators therefore appear to have missed out on a great deal of money by (a) letting season ticket holders in “free” and (b) by promising the same rights to the end of the season.

It might be that the administrators want to keep the fans on-side so that next year’s season tickets will sell well, but I think there are many more matters at play than simply whether these tickets are honoured.

“We are hopeful that we can enhance revenue streams in the coming months through a variety of means and we have been very encouraged by the support of the business partners who have helped in that regard already.

“Enhance revenue streams in the coming months”? The job of an administrator is, as I have written before, (a) to rescue the business as a going concern; (b) failing which to secure as good a deal for all creditors as possible and (c) if neither a nor b can be done, to secure payment for any secured creditor.

In any distressed business it can (a) increase income and (b) reduce outgoings. The approach of D&P so far seems to have been, until the departure last night of Messrs Russell and Smith, to focus entirely on (a).

I should say though that the story broken by Gerry Braiden of the Herald last night – that despite D&P’s promises, Rangers have not paid for the policing of Saturday’s game, suggests that the cost reductions have started – but reneging, allegedly, on a deal with Strathclyde Police might have consequences for D&P, as they agreed to pay for it, and could, if not resolved, lead to Rangers closing the doors at Ibrox very soon indeed.

I’ll come back to that later.

In addition, what is this about “the coming months”? I had thought D&P were confident about a quick departure from administration. Could it be that their rosy view of the world has darkened the more they have looked into things?

How have “business partners” helped with the “income streams”? Who has given the administrators money to continue to run the club?

“The Club’s suppliers are also working with us to improve income flows where possible and the sponsors have also been tremendously supportive. We are in discussion with them to see if we can enhance the packages that we currently have in place.

Sponsors do not have a choice but to help, unless the contract specifically allows them to terminate on an Insolvency Event. Therefore, even though association with Rangers is just now less prestigious than at other times, the sponsors have to smile and go along with the ride.

However, if I was a sponsor of Rangers, indeed of any team in this situation, whilst D&P might ask me to “enhance” my package – ie pay more money – I would take a huge amount of convincing.

How can suppliers “help” with cash flow? Only by agreeing to supply Rangers (in administration) whilst waiting even longer for payment. In light of the alleged treatment of Strathclyde Police, would any supplier go along with that?

“This is obviously a very difficult period for the Club but those who come to the fore and support the Club will obtain tremendous publicity which is what sponsorship is all about.

So a sponsor who steps us to the plate will be doing it for the publicity – Rangers are at probably the lowest point in its long and illustrious history now. Whilst the followers of the Ibrox team would appreciate any efforts to keep it alive, the opinion outside the loyal fan base, and not just among fans of other teams, is that we have an organisation which has grossly mismanaged itself, and owes huge sums by way of tax. As Mr Salmond saw from the reaction to his ill-advised comments, the tide of public opinion is not in Rangers’ favour just now.

If I ran a big commercial organisation, would I want to be perceived as helping a “tax dodging” company? How does that benefit my brand?

“Right now, it is quite simple – income now will help secure the future of Rangers.

How much income? Taking account of tax and other liabilities, Rangers debt is enormous. The owner has stated that they have a £10 million per year income shortfall. An extra £10 million income does not remove a penny of debt.

A cynic would say, wrongly of course, that D&P fears that there is not enough in the pot to pay its fees!

“Our focus is on generating income for the Club but there is also a focus on costs and the steps we are taking in terms of the cost base of the Club will evolve during the next week.

Good to see that the cost reductions are coming – but why has it taken so long? Portsmouth made over 30 people redundant in a couple of days. All other Scottish football teams who have entered administration have made job cuts (regrettably) immediately. But talking about these savings “evolving”?

“On a daily basis we are talking to department heads and seeing where there is capacity for cost savings but being very mindful of the need to both to preserve the performance on the pitch and retain the efficiency of the club off the pitch as well.

The need to preserve performance on the field is not an administrator’s responsibility.

The only justification for this would be that doing so would make the club more money. But Rangers is not going to win anything this season and will not be eligible for European football next, if it even exists.

Would Rangers fans refuse to turn out to see a team mainly of youth players, if paying at the gate could still save the club? Of course they would.

Therefore the only reason for “preserving the performance” on the field is for the increased prize money for finishing second, rather than lower down. Does that justify the huge salary bill that D&P would need to meet?

No, it does not.

“Overall, I would describe the situation as positive. Everybody recognises the plight that the club is in and have come to the table to help and assist where possible.

The situation is “positive”!!??

Remarkable.

I can only equate this to the captain of the Titanic saying that the news was good as the ship would not run out of ice cubes for drinks n the bar!

“We have also had very good support from the football authorities and have met with both the SFA and the SPL.

What support? Financial? Have the SPL and SFA discussed with their members, some of whom are owed money by Rangers, if they are happy for “support” to be provided?

Remember the SPL “prosecuted” Hearts for failure to act with the utmost good faith for paying its players what the League saw as one day late!

If I ran any of the teams owed money by Rangers, I would be demanding answers from Messrs Regan and Doncaster before a penny of “assistance” went to Rangers.

“For 140 years Rangers has been a key part of Scottish football. We hope that the influence and the support which the Club has given to the game over the years will carry some weight at these difficult times.

Well it’s worth hoping!

“Generally other clubs are sympathetic. I think clubs realise this is a difficult time for the football industry in general and Rangers isn’t unique in its financial position. They are very supportive of the survival of the Club which is critical to Scottish football.”

Rangers is unique in its financial position. No one else owes such huge sums to HMRC due to a failed tax reduction scheme. No one else boasted about spending twice what its nearest competitor did. No one else has been running up new tax debt at in excess of £1 million per month.

Can D&P show how Rangers survival is critical to Scottish football – no – because it is not.

*

Conclusion

I will come back to Rangers latest comments and developments tonight. As a story it continually develops faster than it can be written about. I hope to keep up with it for the sake of my reader – maybe I should suggest that D&P keep quiet for a day or two.

[ano hibby]

Very interesting post/blog.
In all the info flying around i hadnt picked up the point noted above that (presumably) if Rangers still in administartion they can't play in Europe..is this right or have i misinterpreted?