Generic Sevco / Rangers meltdown thread

[CropleyWasGod]

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Never took it that way - like most posters in this thread, I am punching in the dark!

The bit about the property proceeds, though, is just not likely is it, since the planning restrictions on both properties in Govan and Milngavie are likely to deter any potential bidder. AFAIK no potential bidder has suggested that he would buy the assets on that basis.

Yeah, I have to admit to being in the dark about the property values.

So, going back to your original thoughts, you reckon that it would have been in our (as in the taxpayers) interests to have the Ticketus deal set aside?

Interesting moral dilemma there, grasshopper.....

[Sylar]

So, seeing as they're now tied to the Ticketus deal, if the administrators take the decision to liquidate the club, would a Phoenix Rangers then be tied to the deal, or would it legally be null and void? Would the administrators consider this avenue as a potentially "worthwhile risk"?

Apologies if this has been addressed earlier.

[ancient hibee]

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Because, Mr Headmaster Sir, I was following the line put out by Paul Murray that the size of RFC's debt was immaterial - it would simply change the pence in the pound to the creditors.

So, today's ruling would suggest that the ST sales are NOT going to be clawed back into the ultimate available pool of reddies. So, even less than thought for a creditor distribution.

Us, as taxpayers, via the HMRC therefore take the biggest hit?

Ain't that the case, BigBossMan?

A slight confusion I feel -Ticketus will continue to get the season ticket money.This will be a better deal for tax payers as Ticketus will not rank for a divi from a CVA and as the season ticket money is future income it would not have been available to bolster the CVA funds anyway.I think

[jgl07]

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So, seeing as they're now tied to the Ticketus deal, if the administrators take the decision to liquidate the club, would a Phoenix Rangers then be tied to the deal, or would it legally be null and void? Would the administrators consider this avenue as a potentially "worthwhile risk"?

Apologies if this has been addressed earlier.

If Rangers are liquidated, they not longer exist. They cease to be.

A new club is formed and maybe buys some assets from the liquidators (Ibrox, Club Crest, etc) and somehow wangle their way back into the League (SFL3).

Ticketus get nothing except what they can chase Craig Whyte for. Best of luck with that one!

[ancienthibby]

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Yeah, I have to admit to being in the dark about the property values.

So, going back to your original thoughts, you reckon that it would have been in our (as in the taxpayers) interests to have the Ticketus deal set aside?

Interesting moral dilemma there, grasshopper.....

Humble grasshopper thinks that it would be absolute anathema to find that the T deal was set aside and that Lloyds/HBOS (who were the most profligate lender to SDM) would still benefit with their loans repaid.

Most especially if HMRC were to be stuffed.

Pins and doll are to hand.

[ballengeich]

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If Rangers are liquidated, they not longer exist. They cease to be.

A new club is formed and maybe buys some assets from the liquidators (Ibrox, Club Crest, etc) and somehow wangle their way back into the League (SFL3).

Ticketus get nothing except what they can chase Craig Whyte for. Best of luck with that one!

I read a claim on another forum that legislation comes into force on 6th April which makes it more difficult for a newco to set up and ignore the debts of its predecessor. The writer suggested that it could therefore be to Rangers' advantage to go into liquidation before the end of the current tax year. Does anyone know whether that is based on fact?

[ballengeich]

http://www.rangers.co.uk/news/footba...rticle/2690528

Is this the administrators claiming that the judgment means they can tear the Ticketus deal up?

[BarneyK]

If anyone can make sense of it. Here's the report from Lord Whatsit -

http://www.scotcourts.gov.uk/opinions/2012CSOH55.html

[RyeSloan]

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http://www.rangers.co.uk/news/footba...rticle/2690528

Is this the administrators claiming that the judgment means they can tear the Ticketus deal up?

I think it means that they still have that as an option...the implicaitons of them doing so are not clarified though!

Interesting this part though:

Lord Hodge has stated Ticketus has what are known as contractual rights, essentially a contract between the Club and themselves.

So this is quite clear in stating the club have a contract with Ticketus...the club of course at the time being owned by SDM. The same SDM who seems to be claiming he knew nothing much about anything.

[hibs0666]

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I think it means that they still have that as an option...the implicaitons of them doing so are not clarified though!

Interesting this part though:

Lord Hodge has stated Ticketus has what are known as contractual rights, essentially a contract between the Club and themselves.

So this is quite clear in stating the club have a contract with Ticketus...the club of course at the time being owned by SDM. The same SDM who seems to be claiming he knew nothing much about anything.

I think the judge dude is saying that the administrator's have the right to breach that contract. I dinnae have a sccoby what that means if Ticketus were to sue for such a breach.

The shambles continues!

[NGH]

If Ticketus are just a creditor like HMRC etc would they not now be the largest single creditor (until the outcome of the 'big' tax case at least). If the debt owed is larger than 25% they can block a CVA if they think they would get more from liquidation. It all makes a deal with the Blue knights more likely I would think.

[green glory]

Super A*sehole's looking a bit blotchy on BBC Scotland news. Must be all the excitement.

[Spike Mandela]

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I think the judge dude is saying that the administrator's have the right to breach that contract. I dinnae have a sccoby what that means if Ticketus were to sue for such a breach.

The shambles continues!

Administrators will tell prospective buyers they have the right to breach the contract. The highly paid judge has basically spent days deliberating and then sat on the fence with a giant fence post up his erchie.

[BarneyK]

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If Ticketus are just a creditor like HMRC etc would they not now be the largest single creditor (until the outcome of the 'big' tax case at least). If the debt owed is larger than 25% they can block a CVA if they think they would get more from liquidation. It all makes a deal with the Blue knights more likely I would think.

Surely Ticketus are not actually a creditor? Instead they own a shedload of tickets which the Huns are obliged to sell on their behalf before forwarding on the cash. In which case they are owed nowt but future sales. Nothing now anyway. Well, certainly not the full 25 million.

[ehf]

The decision is a major victory for the Administrators. It's all here at the end:

[62] I therefore summarise my views as follows: (i) an administrator must perform his functions in the interests of the company's creditors as a whole (subject to the qualification in paragraph 3(4) of Schedule B 1 which is not relevant in this case); (ii) where the company in administration is insolvent, an administrator may have to decline to perform a contractual obligation of the company in pursuit of the statutory objective or objectives in his proposals if that is in the interests of the company's creditors as a whole; (iii) should he do so, the court would not, absent exceptional circumstances, force the company to perform those contractual obligations to the detriment of the creditors as a whole; (iv) the court has power to interfere under paragraph 74 of Schedule B1 if the administrator's decision is conspicuously unfair to a particular contractor or creditor; but (v) treating unsecured creditors in accordance with their legal rights in an insolvency would not of itself involve such unfairness.

Conclusion

[63] I conclude that the legal nature of the rights which Ticketus has in the Ibrox stadium, the season tickets for that stadium and the proceeds of future sales of the season tickets are purely personal contractual rights. In relation to the second alternative direction I refer the administrators to my discussion in paragraphs [38] to [62] above.

Lord Hodge's refusal to give directions is merely a technicality. In essence he is saying:

- Ticketus have no security (they argued they had a trust over the future income but that is not possible in Scots law)

- the Administrators can break the contract and the Court will let them.

So it's £24 million back into RFC at the expense of Ticketus. They should have taken Scots law advice on the deal and got security over the stadium.

[greenginger]

Lord Hodge judgment is too much info for a Friday night or any other time for that matter, but one Clause seems to jump out of the text.


Clause 36 states Ticketus rights would " prevail a CVA or a winding up order "


I think Duff and Duffer are ,in football terminology, trying to take some positives out of a 6 - nil home defeat.

[BarneyK]

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The decision is a major victory for the Administrators. It's all here at the end:

[62] I therefore summarise my views as follows: (i) an administrator must perform his functions in the interests of the company's creditors as a whole (subject to the qualification in paragraph 3(4) of Schedule B 1 which is not relevant in this case); (ii) where the company in administration is insolvent, an administrator may have to decline to perform a contractual obligation of the company in pursuit of the statutory objective or objectives in his proposals if that is in the interests of the company's creditors as a whole; (iii) should he do so, the court would not, absent exceptional circumstances, force the company to perform those contractual obligations to the detriment of the creditors as a whole; (iv) the court has power to interfere under paragraph 74 of Schedule B1 if the administrator's decision is conspicuously unfair to a particular contractor or creditor; but (v) treating unsecured creditors in accordance with their legal rights in an insolvency would not of itself involve such unfairness.
I conclude that the legal nature of the rights which Ticketus has in the Ibrox stadium, the season tickets for that stadium and the pro.

Aren't Rangers only insolvent inasmuch as they choose to be. What if they were to reduce their playing squad and operate within a 2k a week wage cap, would they then not be able to break even? This is of course assuming a CVA had dealt with their outstanding debt. All I know is that they would [I]choose[I] not to, as that would mean they would have to compete on a level playing field with the rest of us. And they would never ever consider doing that. As the media keep telling us...we NEED a strong Rangers. Aye right.

[blackpoolhibs]

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Aren't Rangers only insolvent inasmuch as they choose to be. What if they were to reduce their playing squad and operate within a 2k a week wage cap, would they then not be able to break even? This is of course assuming a CVA had dealt with their outstanding debt. All I know is that they would [I]choose[I] not to, as that would mean they would have to compete on a level playing field with the rest of us. And they would never ever consider doing that. As the media keep telling us...we NEED a strong Rangers. Aye right.

Thats a question no media person seems prepared to ask, and one rangers dont want to do. They'd rather pump the taxman and anyone else for that matter, start again with no debt and continue on their merry way.

Thats why it must not be allowed to happen.

[matty_f]

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Aren't Rangers only insolvent inasmuch as they choose to be. What if they were to reduce their playing squad and operate within a 2k a week wage cap, would they then not be able to break even? This is of course assuming a CVA had dealt with their outstanding debt. All I know is that they would [I]choose[I] not to, as that would mean they would have to compete on a level playing field with the rest of us. And they would never ever consider doing that. As the media keep telling us...we NEED a strong Rangers. Aye right.

That's a great point

I said it as soon as the administrators went in and never sacked a load of folk straight away as other clubs seem to do.

There is a point about 'maximising revenue' by keeping a strong squad, but at the end of the day if I was a creditor I'd be asking why they need players on however many grand a week when most of the other SPL clubs put out teams on a fraction of that budget.

Rangers' status etc should not come into it. The administrators should not even think about a 'speculate to accumulate' strategy of hoping they get good prize money through a high league position, that's absurd. They should budget to the worst case scenario and fit the wages etc around that.

[hughio]

I read it as saying the administrators can renege on the Ticketus deal if its in the best interests of the creditors.
So its a sort of victory for Ticketus but they can still be shafted for their £24M investment unless they pull off the winning bid.

[CropleyWasGod]

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Aren't Rangers only insolvent inasmuch as they choose to be. What if they were to reduce their playing squad and operate within a 2k a week wage cap, would they then not be able to break even? This is of course assuming a CVA had dealt with their outstanding debt. All I know is that they would [I]choose[I] not to, as that would mean they would have to compete on a level playing field with the rest of us. And they would never ever consider doing that. As the media keep telling us...we NEED a strong Rangers. Aye right.

Rangers are insolvent, whether they like it or not. They can't pay their debts as they fall due, which is one of the definitions of insolvency. Even if they reduced their wage bill as you suggest, it would be a long time before they paid off even the current HMRC debt of £15m.

[CropleyWasGod]

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That's a great point

I said it as soon as the administrators went in and never sacked a load of folk straight away as other clubs seem to do.

There is a point about 'maximising revenue' by keeping a strong squad, but at the end of the day if I was a creditor I'd be asking why they need players on however many grand a week when most of the other SPL clubs put out teams on a fraction of that budget.

Rangers' status etc should not come into it. The administrators should not even think about a 'speculate to accumulate' strategy of hoping they get good prize money through a high league position, that's absurd. They should budget to the worst case scenario and fit the wages etc around that.

The answer would be just as the admins have been saying. Higher paid players increase the value of the business to be sold on. It's not about the future trading... they know they couldn't sustain that. It's about selling off a high-value asset for as high a price as possible, thereby maximising the return to current creditors.

[Hibernia&Alba]

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Rangers are insolvent, whether they like it or not. They can't pay their debts as they fall due, which is one of the definitions of insolvency. Even if they reduced their wage bill as you suggest, it would be a long time before they paid off even the current HMRC debt of £15m.

There is nobody sniffing glue at Ibrox

[hibs0666]

Looks like a carefully considered response to the Ticketus judgement from Parkhead...

Statement from Parkhead

[BarneyK]

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Rangers are insolvent, whether they like it or not. They can't pay their debts as they fall due, which is one of the definitions of insolvency. Even if they reduced their wage bill as you suggest, it would be a long time before they paid off even the current HMRC debt of £15m.

And yet they intend to push a CVA and come out the other end debt free and continuing to massively overspend. It is cheating plain and simple. They know it, we know it, the SPL and the SFA know it, and the media know it. I would like to see this wage cap implemented on them as a punishment, regardless of whether it pays their bills or not. And while we're about it, same thing applies to that other mob roond Gorgie way.

[CropleyWasGod]

My tuppence worth on the Ticketus result, having re-read the actual decision, rather than the BBC/STV interpretation.....

The "contractual rights" to which everyone is referring are, IMO, first dibs on the ST sales. At the moment, assuming ST's aren't on sale yet for next season, that's nowt. Once they go on sale, then RFC would be due Ticketus £6m. It's that part that I reckon they are talking about setting aside.

Also, RFC are already due £6m for this season. That part would rank as an ordinary creditor alongside everybody else.

What would happen to the deal if and when RFC come out of admin? I reckon it would have to stand... the Judge only said that the admins have the right to break it, not the company once it is out of admin.

So... £6m gets put in the CVA just now, maybe £6m to follow soon.... and the remaining £12m stands as already contracted.

That's my take.... Cav, where are you?

[BarneyK]

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thereby maximising the return to current creditors.

If we are assuming the Creditors are looking at a massively diluted CVA (by the time the BTC is foisted on them), what concern is it to the Creditors how much the players are getting paid? Fair play if these players were to entice a multi-billionaire in to donate a substantial fortune to the Huns, but I just don't get it if the end game is a CVA.

[CropleyWasGod]

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And yet they intend to push a CVA and come out the other end debt free and continuing to massively overspend. It is cheating plain and simple. They know it, we know it, the SPL and the SFA know it, and the media know it. I would like to see this wage cap implemented on them as a punishment, regardless of whether it pays their bills or not. And while we're about it, same thing applies to that other mob roond Gorgie way.

If they continue to overspend once they are out of administration, they will be insolvent again pretty quickly.

[BarneyK]

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If they continue to overspend once they are out of administration, they will be insolvent again pretty quickly.

Aye. I keep going back to Paul Murray's assertion that he doesn't want to have to buy a whole new squad come the summer, that he wants the current players to remain at Rangers. How does he intend managing that one without overspending again? Can they not just die already, my heed is burstin' wi it all

[CropleyWasGod]

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If we are assuming the Creditors are looking at a massively diluted CVA (by the time the BTC is foisted on them), what concern is it to the Creditors how much the players are getting paid? Fair play if these players were to entice a multi-billionaire in to donate a substantial fortune to the Huns, but I just don't get it if the end game is a CVA.

The amount of the wages isn't a concern, but the value of the squad is. If a buyer is going to pay more for a better squad, then of course that is better for the creditors.