Generic Sevco / Rangers meltdown thread

[PaulSmith]

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To be honest there are so many holes in the scheme that it can only go through with extreme corruption from the authorities.

There isn't a chance in hell of getting a CVA approved before the end of the season if at all. I will be surprised if Craig Whyte can be totally overlooked as Miller is arguing.

That leaves the Oldco facing liquidation which means that all the players contracts revert to the SPL and effectively all become free agents if they so wish.

So the Newco will be there without any history or any players. Miller has argued that he will curb excessive spending so they are going to be hard pressed to put together a competitive team even assuming that the SFA transfer embargo is not applied to the Newco.

My suspicion is that the whole 'incubator' company thing is a ploy to try and keep the fans on board and convince them that their history will be retained.

He will buy the assets from the admins for a knock down price and be looking to sell the Newco on as soon as possible.

It would appear from the most recent comments from D&P's that both HMRC and Ticketus are agreeable to the CVA proposed by Bill Miller.

So no sanctions from SPL, £130m debt disappears and I'm sure that the SFA will find in Rangers favour in regards the transfer ban. Start of next season with 40k ST's and no debt. Why the F bother anymore with Scottish Football?

[BarneyK]

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It is liquidation/asset stripping by any other name, which was not on the agenda (of the prospective buyers, at least) until relatively recently. At the outset, the admins and buyers were more confident about a CVA and trade-out situation, and the L word was never mentioned. I think a healthy dose of reality, and a ticking clock, have concentrated minds somewhat.

This kind of thing?

What is asset stripping?

Asset stripping is taking company funds or assets of value while leaving behind the debts.

Company directors transfer only the assets of one company to another and not the liabilities. The result is a dormant company with large liabilities that cannot be met and it has to be put into liquidation

Stripping of company assets is normally done for two main reasons:

•The fraudsters deliberately target a company or companies to take ownership, move the assets and then put the stripped entity into liquidation
•"Phoenixing" - directors move assets from one limited company to another to 'secure' the benefits of their business and avoid the liabilities. Most or all the directors will usually be the same in both companies. This usually arises as a way of 'rescuing' the assets of a failing business rather than targeting a company


http://www.sfo.gov.uk/fraud/what-is-...stripping.aspx

Actually, how does this differ from what is being proposed? Looks well dodgy...

[CropleyWasGod]

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It would appear from the most recent comments from D&P's that both HMRC and Ticketus are agreeable to the CVA proposed by Bill Miller.

?

Where are you getting this from, Paul?

[Spike Mandela]

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Where are you getting this from, Paul?

BBC journalists twitter.

[BarneyK]

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Where are you getting this from, Paul?

Alastair Lamont on Twitter, I believe.

[CropleyWasGod]

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This kind of thing?

What is asset stripping?

Asset stripping is taking company funds or assets of value while leaving behind the debts.

Company directors transfer only the assets of one company to another and not the liabilities. The result is a dormant company with large liabilities that cannot be met and it has to be put into liquidation

Stripping of company assets is normally done for two main reasons:

•The fraudsters deliberately target a company or companies to take ownership, move the assets and then put the stripped entity into liquidation
•"Phoenixing" - directors move assets from one limited company to another to 'secure' the benefits of their business and avoid the liabilities. Most or all the directors will usually be the same in both companies. This usually arises as a way of 'rescuing' the assets of a failing business rather than targeting a company


http://www.sfo.gov.uk/fraud/what-is-...stripping.aspx

Something like that.

It's the following extract from D&P's statement that I find most interesting:-

"In recent weeks there has been much debate about Rangers exiting from administration through a stand-alone CVA. However, the barriers to a proposed stand-alone CVA are now too high.

"These barriers include, in particular, the absence of any bidder proposing unconditionally sufficient funds to enable a stand-alone CVA to take place.

"Crucially a stand-alone CVA would take so long now to effect, the Club could not survive in administration.

As a consequence, no party has been able to submit an unconditional bid in a stand-alone CVA scenario.

"We confirm that discussions with the two final bidding parties for the Club included the possibility, as part of the proposals, the formation of a new company in addition to the preservation of the Rangers Football Club plc.

"Mr Miller's proposal involves the use of a specially created newco in addition to the retention of the Rangers Football Club plc. The business and assets he proposes to purchase will be sheltered in a newco and returned to the plc once the plc has been 'cleaned up'.

That begs a number of questions:-

1. what is the time-scale for the whole thing? Is that important?

2. what happens if the OldCo is not "cleaned up"?

3. what value is being put on the assets that are being sold? Is that value challengable?

I will have more.

[BarneyK]

Alasdair Lamont ‏ @BBCAlLamont

David Whitehouse: "We've already been in consultation with largest creditor, HMRC and they're fully aware of and are supportive of the bid.

DW: HMRC & Ticketus are both creditors of the company and the creditors have voted in favour of the proposals which enable us to do deal

DW: They will receive the benefit pro rata with other creditors of the pool of funds which have been created for the creditors generally.

DW: That pool of funds will come from the proceeds of the litigation that have been brought..

.. the existing assets such as they are and the proceeds of the sale and purchase agreement which we are commencing now with Bill Miller."

[Andy74]

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That's up there with "its the fans' fault that we're mince". I'm not sure about the rest of the 'majority of Hibs.net' but I wasn't invited to vote on the proposals.

There was a poll on here, so you were.

I said then that the current situation was that they could get voted back in with no sanctions and so couldn't get the objections to sanctions being voted in.

The proposals did not make it any more likely than we have now that a newco would be voted in, but they did at least have some decent sanctions if it happened.

[matty_f]

Just trying to get my head around this at the moment, but so far as I can see Miller wants to seperate the bad bit of Rangers (with the debt) from the good bit (the name/history etc), while getting an agreement through CVA to repay the creditors whoever much it is that they'll agree to in the pound.

I think a few football clubs have done that. In fact, didn't STF shuffle around debt and create companies (or at least another company) when he came into Hibs. The difference being that we didn't need to put a CVA in place.

The CVA is between Rangers and the creditors, and so really it's up to them what's agreeable and that doesn't then become a sporting issue per se, more a business one, (other than the football related debts, of course).

I don't understand what the SPL or SFA can do here. If Miller creates the newco and transfers the liabilities to that, while keeping the oldco intact, then there's probably nothing that the SPL can do about it.

Am I totally on the wrong track here, and if so, what have I got wrong?

[Paisley Hibby]

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Where are you getting this from, Paul?

It was on Radio Scotland. They also quoted SPL as saying they had given no assurances re a Newco Rangers. That is almost certainly disingenuous of SPL - Miller is saying that his plan is not a Newco so any assurances given by SPL would not be about a Newco. However, Radio Scotland also had guy from Ernest & Young on who said that "incubator" is just another word for newco.

[BarneyK]

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It was on Radio Scotland. They also quoted SPL as saying they had given no assurances re a Newco Rangers. That is almost certainly disingenuous of SPL - Miller is saying that his plan is not a Newco so any assurances given by SPL would not be about a Newco. However, Radio Scotland also had guy from Ernest & Young on who said that "incubator" is just another word for newco.

That's cleared it up then

[BarneyK]

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Just trying to get my head around this at the moment, but so far as I can see Miller wants to seperate the bad bit of Rangers (with the debt) from the good bit (the name/history etc), while getting an agreement through CVA to repay the creditors whoever much it is that they'll agree to in the pound.

I think a few football clubs have done that. In fact, didn't STF shuffle around debt and create companies (or at least another company) when he came into Hibs. The difference being that we didn't need to put a CVA in place.

The CVA is between Rangers and the creditors, and so really it's up to them what's agreeable and that doesn't then become a sporting issue per se, more a business one, (other than the football related debts, of course).

I don't understand what the SPL or SFA can do here. If Miller creates the newco and transfers the liabilities to that, while keeping the oldco intact, then there's probably nothing that the SPL can do about it.

Am I totally on the wrong track here, and if so, what have I got wrong?

I think the problem arises when the CVA is found to be unworkable and they decide to liquidate. The opinion seems to be that they will be able to do so without any real penalties.

[Spike Mandela]

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Just trying to get my head around this at the moment, but so far as I can see Miller wants to seperate the bad bit of Rangers (with the debt) from the good bit (the name/history etc), while getting an agreement through CVA to repay the creditors whoever much it is that they'll agree to in the pound.

I think a few football clubs have done that. In fact, didn't STF shuffle around debt and create companies (or at least another company) when he came into Hibs. The difference being that we didn't need to put a CVA in place.

The CVA is between Rangers and the creditors, and so really it's up to them what's agreeable and that doesn't then become a sporting issue per se, more a business one, (other than the football related debts, of course).

I don't understand what the SPL or SFA can do here. If Miller creates the newco and transfers the liabilities to that, while keeping the oldco intact, then there's probably nothing that the SPL can do about it.

Am I totally on the wrong track here, and if so, what have I got wrong?

What about the sporting issue of other clubs paying their full tax for the last 15 years?

Why don't we all just go for reckless financial spending and then set up a newco. Surely this is THE business model for a modern football club.

[Paisley Hibby]

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That's cleared it up then

Just read it again and I see what you mean

[BarneyK]

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What about the sporting issue of other clubs paying their full tax for the last 15 years?

Why don't we all just go for reckless financial spending and then set up a newco. Surely this is THE business model for a modern football club.

I think Matty means as things stand. If the end game is liquidation and they are unable to be held accountable for that, well that's another matter. If they agree a CVA, I don't think we have much to complain about. Won't stop me, mind.

[CropleyWasGod]

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Just trying to get my head around this at the moment, but so far as I can see Miller wants to seperate the bad bit of Rangers (with the debt) from the good bit (the name/history etc), while getting an agreement through CVA to repay the creditors whoever much it is that they'll agree to in the pound.

I think a few football clubs have done that. In fact, didn't STF shuffle around debt and create companies (or at least another company) when he came into Hibs. The difference being that we didn't need to put a CVA in place.

The CVA is between Rangers and the creditors, and so really it's up to them what's agreeable and that doesn't then become a sporting issue per se, more a business one, (other than the football related debts, of course).

I don't understand what the SPL or SFA can do here. If Miller creates the newco and transfers the liabilities to that, while keeping the oldco intact, then there's probably nothing that the SPL can do about it.

Am I totally on the wrong track here, and if so, what have I got wrong?

It's the other way about.

[matty_f]

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I think the problem arises when the CVA is found to be unworkable and they decide to liquidate. The opinion seems to be that they will be able to do so without any real penalties.

Yep, that's a big issue but nobody can do anything about that until it happens, if it happens.

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What about the sporting issue of other clubs paying their full tax for the last 15 years?

Why don't we all just go for reckless financial spending and then set up a newco. Surely this is THE business model for a modern football club.

I agree, but playing devil's advocate here, if HMRC agree the CVA and Rangers repay whatever in the pound, that's the same as many businesses who find themselves in the position of having to agree structured and partial debt repayments. That's between HMRC and Rangers, rather than the SPL (though IIRC, the SPL want to make being on time and up to date with tax payments part something that's punishable if it's not adhered to - it was in the proposals that are being delayed as far as I remember).

[TheEastTerrace]

Surely not the end of the saga by any stretch but I feel dejected, depressed and cheated by the possibility of Rangers coming out of this relatively unscathed. This is not the game I fell in love with and it's an absolute outrage that the authorities could even consider facilitating it. Money has ruined any sporting integrity if there really was any in this parochial footballing nation of ours. Time to logout.

[HibbyRod]

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Surely not the end of the saga by any stretch but I feel dejected, depressed and cheated by the possibility of Rangers coming out of this relatively unscathed. This is not the game I fell in love with and it's an absolute outrage that the authorities could even consider facilitating it. Money has ruined any sporting integrity if there really was any in this parochial footballing nation of ours. Time to logout.

Pretty much how I feel just now!

[stokesmessiah]

If it was as easy as this then why did the other bidders not come up with the same plan? Also, it has been clear from day 1 that Doncaster & the SPL were going to roll over like a puppy to have their bellies tickled by Rangers so how come it has taken so long for the Miller bid to be agreed?

I will be absolutely disgusted if they walk away from this, almost as disgusted as i am that the majority of Hun fans seem to be rejoicing at getting away with it. stupid B****** will still be singing god save the queen in weeks to come, god save her just dont bloody pay her the money you are due though eh?

SPL is dead if this happens.

[matty_f]

Are there not laws in place to stop companies from shafting creditors by starting newcos and moving the debt to them while keeping the assets safe?

[grunt]

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DW: That pool of funds will come from the proceeds of the litigation that have been brought..

Looks like they've told HMRC that they expect to win the case against Collyer Bristow and that will provide £25m which will be split among the creditors.
I'd be surprised if HMRC swallowed that one.

[CropleyWasGod]

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Are there not laws in place to stop companies from shafting creditors by starting newcos and moving the debt to them while keeping the assets safe?

They are not doing that, though. They are selling the assets to the NewCo, and keeping the liabilities in the OldCo. Those liabilities will be partly paid off by the proceeds from the sale of the assets.

[matty_f]

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Looks like they've told HMRC that they expect to win the case against Collyer Bristow and that will provide £25m which will be split among the creditors.
I'd be surprised if HMRC swallowed that one.

What about Craig Whyte's shares as well - was he not after £30m for them? Surely Miller can't buy the club without buying Whyte's shares?

[JeMeSouviens]

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Just trying to get my head around this at the moment, but so far as I can see Miller wants to seperate the bad bit of Rangers (with the debt) from the good bit (the name/history etc), while getting an agreement through CVA to repay the creditors whoever much it is that they'll agree to in the pound.

I think a few football clubs have done that. In fact, didn't STF shuffle around debt and create companies (or at least another company) when he came into Hibs. The difference being that we didn't need to put a CVA in place.

The CVA is between Rangers and the creditors, and so really it's up to them what's agreeable and that doesn't then become a sporting issue per se, more a business one, (other than the football related debts, of course).

I don't understand what the SPL or SFA can do here. If Miller creates the newco and transfers the liabilities to that, while keeping the oldco intact, then there's probably nothing that the SPL can do about it.

Am I totally on the wrong track here, and if so, what have I got wrong?

Firstly, you need to ignore all the pish you've read and heard from Scottish football pundits over the last weeks and months.

Professional football clubs in Scotland are companies. Rangers FC plc is Rangers, there is no legal entity other than that one. The club/company may be in turn owned by another company, eg. Hibernian Holdings owns 90% of HFC, Rangers FC Group owns 85% of RFC, but the simple fact is that the club and company are legally indistinguishable.

Now, as you say, if the company can satisfy its creditors and agree a CVA it can exit administration and go back to trading normally, nothing to see here for the SPL/SFA. This is what Motherwell did.

This is not what's being proposed for the Huns. Miller is proposing to start a new company, ie. a totally new club that has never played before. This club will buy the assets of RFC including stadium etc. and attempt to join the SPL in place of the existing club. It is up to the SFA and SPL to decide whether or not to allow this new club to take the place of the existing one. Whether or not the existing company is immediately liquidated or left to hang around as an empty shell for a while is completely irrelevant.

When Airdrieonians FC were liquidated, an attempt was made to form a newco to take their place. This was blocked and relegation from SFL Div 1 was cancelled. Gretna took the resulting free space in the league. Subsequently, an Airdrie supporting businessman bought Clydebank FC, moved them to Airdrie and changed their name, but legally Aidrie United FC is Clydebank FC, they are the same company.

[CropleyWasGod]

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What about Craig Whyte's shares as well - was he not after £30m for them? Surely Miller can't buy the club without buying Whyte's shares?

He's not buying the club. He is buying the assets.

[matty_f]

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They are not doing that, though. They are selling the assets to the NewCo, and keeping the liabilities in the OldCo. Those liabilities will be partly paid off by the proceeds from the sale of the assets.

Same question applies though chief - can companies be brought to task for doing that?

[blindsummit]

It seems like the machinations are coming to their conclusion now and the result the cynics always expected is to come about. Rangers will escape with a single bound and continue as if nothing has happened. I always expected that SDM, CW, the SFA, SPL D*P ect al were corrupt from the start and had this fix lined up from the start.

My one hope was that HMRC would be the spanner in their works, particularly all their talk of making an example of tax dodgers, EBT abusers etc.

Now it seems that they too are in on the fix and are compliant cogs in the Ranger support machine.

Is this then the real nub of the conspiracy (which this whole 20 year scenario has been, make no mistake)? Why would the supposedly impartial agents of our elected government do this? What is their motivation? Who do they really serve? And who can have directed or influenced them to save Rangers and why are they compliant?

This is now where our conversation will move onto, as it seems the battle for sporting integrity and a level playing field is over. R.I.P. Scottish Football, I knew you well. But no more.

I'm lucky in that I moved to Canada a few years ago so my spending on Scottish Football is now restricted to buying Hibs TV, getting stuff sent from the Hibs shop and the odd game when I'm over. but even that will be no more. I am certainly glad that i don't pay any taxes to the corrupt HMRC that's for sure.

Thankfully I got into Hockey & the Detroit Red Wings in a big way and that's where my focus will lie. It's not institutionally corrupt that's for sure and anyone can and does win, witness the surprises in this year's Stanley Cup Playoffs so far.

So after this years SCF, if anyone called Rangers is in the SPL next year, that's it for me. Sorry to be so negative but I'm so disgusted with the brazen sham in front of our eyes right now, I can hardly think straight for the anger.

[JeMeSouviens]

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What about Craig Whyte's shares as well - was he not after £30m for them? Surely Miller can't buy the club without buying Whyte's shares?

He can buy the assets and his new club can use them. He can't fulfill his pie in the sky scheme to later resuscitate the old club and merge it with the new one but I don't imagine that would break his lil 'ol heart.

[matty_f]

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Firstly, you need to ignore all the pish you've read and heard from Scottish football pundits over the last weeks and months.

Professional football clubs in Scotland are companies. Rangers FC plc is Rangers, there is no legal entity other than that one. The club/company may be in turn owned by another company, eg. Hibernian Holdings owns 90% of HFC, Rangers FC Group owns 85% of RFC, but the simple fact is that the club and company are legally indistinguishable.

Now, as you say, if the company can satisfy its creditors and agree a CVA it can exit administration and go back to trading normally, nothing to see here for the SPL/SFA. This is what Motherwell did.

This is not what's being proposed for the Huns. Miller is proposing to start a new company, ie. a totally new club that has never played before. This club will buy the assets of RFC including stadium etc. and attempt to join the SPL in place of the existing club. It is up to the SFA and SPL to decide whether or not to allow this new club to take the place of the existing one. Whether or not the existing company is immediately liquidated or left to hang around as an empty shell for a while is completely irrelevant.

When Airdrieonians FC were liquidated, an attempt was made to form a newco to take their place. This was blocked and relegation from SFL Div 1 was cancelled. Gretna took the resulting free space in the league. Subsequently, an Airdrie supporting businessman bought Clydebank FC, moved them to Airdrie and changed their name, but legally Aidrie United FC is Clydebank FC, they are the same company.

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He's not buying the club. He is buying the assets.

Cheers chaps, that makes sense to me now.

In that case, how can Miller possibly think that they can retain the history etc?

The SPL surely can't just waive Miller's club in then. That's a complete nonsense!