Generic Sevco / Rangers meltdown thread

[Just Alf]

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But surely that we now approach the summer, they have zero income, their outgoings are about to shoot up, will there not be pressure from the courts to pull the plug after this week?

And the Huns can't sell players until the transfer window opens on the 1st of July.

So from end of the month they'll be on maximum outgoings and zero revenue, It’s highly unlikely that there is sufficient cash to fund this, together with the usual expenses of running a club in the close season and Duff & Duffers fees as well...... they're gonna have to either quickly release players from their contracts (making them free agents), start selling stuff or liquidate?

[jgl07]

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One bit i'm less clear on is Ticketus - surely they will either want their cash back...or to goto court for the right to sell the seats as agreed for coming seasons. Its crucial not only to them but all the clubs that regularly use his type of finance from them and others that this kind of contract is clarified by law...otherwise who will fund this arrangement in future if they are regarded as 'ordinary' creditors...and how will clubs survive the 2/3 months prior to ST's being sold without it

Wonga.com?

This may explain why season ticket renewals appear to come earlier and a earlier. At this rate you will be asked to renew for 2013-14 before the start of the 2012-13 season.

It really is a crazy situation especially where there is relegation in the air.

[silverhibee]

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No.

David Hillier said on the radio this morning three weeks. An Insolvency Practitioner on the telly a few weeks back said five.

I think they probably have cash flow until the end of the month.

And what happens after that CWG, there next game is away so no more income for them from any football games as it is end of the season at the weekend, how will they be able to pay/keep players over the summer if they have no money, every player with a contract will want to leave as soon as the transfer window opens in July, they will be left with a bunch of kids,(don't tell the yams), this has to be THE END for them surley.

I would say, last man out please turn the lights of, but they have probably had it disconnected by there suppliers.

[CropleyWasGod]

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And what happens after that CWG, there next game is away so no more income for them from any football games as it is end of the season at the weekend, how will they be able to pay/keep players over the summer if they have no money, every player with a contract will want to leave as soon as the transfer window opens in July, they will be left with a bunch of kids,(don't tell the yams), this has to be THE END for them surley.

I would say, last man out please turn the lights of, but they have probably had it disconnected by there suppliers.

There is still the Court case they have against Collyer Bristow.

I am jesting... if that was actually heard this month, AND they won it, then they would be in clover.

No. When the money runs out, that's it. Done. Enter the Liquidator.

[RyeSloan]

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I think each player did their own negotiations, and there wasn't uniformity in what each agreed.

It was certainly sold in the media, though, as a wage-cut.

Even if it was actually a deferral, I am not sure I agree about the "negligence" charge. The whole point of the exercise was to buy time, and it was successful in that.

To buy time by adding significantly to the debt pile harldy seems to be in the interest of the exisiting creditors.

They could and should have made permanent cuts to the salary costs, that would have reduced the loss the club was making without adding to the debt that had already pushed the club into admin.

Maybe not negligence but throughout this process they have seemed much more focussed on maintaining as close to the status quo as possible, I know their argument is that is in the interest of creditors as this would give them the best hope fo seeing their money but the fact is, which was clear from the start, that anything like the status quo was unsustainable and untenable. Hence why they should have taken a hatchet to existing contracts where possible and looked to create a situation where the playing staff that were worth money in the transfer market could be retained long enough for the club to receive market rates for them....as it stands it now looks like the clubs main saleable assets will be walking away for nothing, how does that help the creditors in any way shape or form?

[PatHead]

Radio Scotland mentioned on the lunchtime programme that all "bidders" were being made aware that a loss of £2-3m per month would take place over the close season. They would need to budget for that in there plans. So the next 2 moonths running costs look like they are higher than the value of the club at this time.


Bet Rangers wish they hadn't voted to hold back the start of the season unlike last year

[Spike Mandela]

Doncaster states that the SPL needs clarity on the Rangers situation before making any decisions and they have to be reactive and not proactive. Surely this is the tail wagging the dog.

If the SPL would just agree some newco rules then show some leadership then perhaps it would provide some clarity for any bidders in Rangers and this whole sorry mess would reach a conclusion.

Sitting back twiddling their thumbs waiting to see what Rangers do so they can tailor any new rules to ensure they are back in tha SPL at all costs is surely humiliating and demeaning for the SPL.

http://sport.stv.tv/football/clubs/r...ers-situation/

[Jack]

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Without the prospect of a CVA surely it becomes a liquidation and the bidders are bidding for the assets only. They may wish to use those assets to start up a new club and they may wish to call that club Rangers, but the conceit that Newco=Oldco-tidyed-up-a-bit must be dead. It seems increasingly doubtful that the players contracts can be transferred across, so we're looking at the prospect of a brand new club, with new owners, new directors and new players playing in a stadium that was abandoned by a now-defunct old club. There should be no prospect of that club getting anywhere near the SPL.

Shame on you for assuming they'd have an old stadium to play in

[PatHead]

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To buy time by adding significantly to the debt pile harldy seems to be in the interest of the exisiting creditors.

They could and should have made permanent cuts to the salary costs, that would have reduced the loss the club was making without adding to the debt that had already pushed the club into admin.

Maybe not negligence but throughout this process they have seemed much more focussed on maintaining as close to the status quo as possible, I know their argument is that is in the interest of creditors as this would give them the best hope fo seeing their money but the fact is, which was clear from the start, that anything like the status quo was unsustainable and untenable. Hence why they should have taken a hatchet to existing contracts where possible and looked to create a situation where the playing staff that were worth money in the transfer market could be retained long enough for the club to receive market rates for them....as it stands it now looks like the clubs main saleable assets will be walking away for nothing, how does that help the creditors in any way shape or form?

Still can't understand why they didn't cut costs such as Marketing Dept, ticketing dept, groundstaff, fringe players etc. Even considering putting Murray Park up for sale to see if there were any bidders. (I know it wouldn't have made them solvent but it may make them a lot more attractive rather than the extra burden on the club.) Most other companies in admin lay off staff, reduce assets, and I still can't see logic in keeping Rangers as big as they were.

[Seveno]

The kindest thing that you could say about Duff & Duffer is that they might have just taken a gamble, big time.

It was always a losers bet though.

What confuses me though is why Miller spent 5 days, with the attendant costs, in doing his due diligence. He could have save time and money by coming to hibs.net.

[StevieC]

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Radio Scotland mentioned on the lunchtime programme that all "bidders" were being made aware that a loss of £2-3m per month would take place over the close season.

That's a pretty wild guesstimate from a company that should, by now, know exactly how much is going in and out of Rangers on a daily/weekly basis. To be unable to clarify exact losses over a 2 month period to within 50% of the actual loss is nothing short of criminal.

Are they actually doing any work at Ibrox or just "Twittering" all day?

[ehf]

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The fundamental problem is that Rangers in their current form are economically unviable. That is how they got into this situation in the first place.

They see themselves as a top European team but are competing with club who have far greater spending power. SPL TV revenue will not cut it in comparison with the big-five European Leagues or even in comparison to the Dutch League.

Yep, even if they could walk away from 100% of the current debt and start again in the SPL, even with the transfer embargo revoked and no other sanctions (apart from no European football for three years, which UEFA will enforce) it wouldn't be viable. So there would have to be a bidder that was prepared to subsidise the business to the tune of at least £10m per annum (per Bill Miller's estimate) for at least three seasons. And even if such a bidder came forward, it wouldn't be allowed due to the FIFA Financial Fair Play rules.

[CropleyWasGod]

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That's a pretty wild guesstimate from a company that should, by now, know exactly how much is going in and out of Rangers on a daily/weekly basis. To be unable to clarify exact losses over a 2 month period to within 50% of the actual loss is nothing short of criminal.

Are they actually doing any work at Ibrox or just "Twittering" all day?

To be fair, they don't know which players will be there in the close season.

[Gingertosser]

Does anyone really think Everton will just stump up the £1m after the last game of the season.
There finances aren't much better than Rangers, but then they will probably have more integrity.

Q) what happens if they go for a CVA and offer creditors 1p/£1, do debtors get to offer the same ?

Q) if they go into liquidation do Everton still have to stump up £1m ?

[lapsedhibee]

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Yep, even if they could walk away from 100% of the current debt and start again in the SPL, even with the transfer embargo revoked and no other sanctions (apart from no European football for three years, which UEFA will enforce) it wouldn't be viable. So there would have to be a bidder that was prepared to subsidise the business to the tune of at least £10m per annum (per Bill Miller's estimate) for at least three seasons. And even if such a bidder came forward, it wouldn't be allowed due to the FIFA Financial Fair Play rules.

Heartwarming, morally upifting post.

[CropleyWasGod]

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Does anyone really think Everton will just stump up the £1m after the last game of the season.
There finances aren't much better than Rangers, but then they will probably have more integrity.

Q) what happens if they go for a CVA and offer creditors 1p/£1, do debtors get to offer the same ?

Q) if they go into liquidation do Everton still have to stump up £1m ?

No and Yes.

[StevieC]

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To be fair, they don't know which players will be there in the close season.

They should do though, they've the power to decide and/or discuss with the players. Poor management on their behalf if they are letting the players dictate surely?

[CropleyWasGod]

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They should do though, they've the power to decide and/or discuss with the players. Poor management on their behalf if they are letting the players dictate surely?

The point I'm making, though, is that (as part of the re-negotiated contracts) some players may walk if there are decent offers... and, at this point, the admins don't know whether they will.

[PatHead]

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That's a pretty wild guesstimate from a company that should, by now, know exactly how much is going in and out of Rangers on a daily/weekly basis. To be unable to clarify exact losses over a 2 month period to within 50% of the actual loss is nothing short of criminal.

Are they actually doing any work at Ibrox or just "Twittering" all day?

They also don't know the costs of getting the stadium ready for the 3rd division next season

[Keith_M]

Is it just me that wants them to stumble on for a bit longer and finally go bust on the 12th of July?


How ironic that would be

[Jim44]

According to the BBC news, McCoist has had discussions with two of the new bidders, who will remain annonymous. Come on now, Sally, as a man who demands transparency, let your supporters know who they are.

[StevieC]

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The point I'm making, though, is that (as part of the re-negotiated contracts) some players may walk if there are decent offers... and, at this point, the admins don't know whether they will.

Ah got you, I think .. the players that negotiated deals will have their contracts jump back up again and may continue to take wages rather than leave (for free?)? And D&P may decide to let them do this if they view them as a "sellable" asset?

[Caversham Green]

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I think each player did their own negotiations, and there wasn't uniformity in what each agreed.

It was certainly sold in the media, though, as a wage-cut.

Even if it was actually a deferral, I am not sure I agree about the "negligence" charge. The whole point of the exercise was to buy time, and it was successful in that.

If the reports are true I think I agree with Hibs Class. The administrators have been running the club at an accounting loss but have disguised the fact by deferring cash outgoings and increasing creditors, thereby reducing the value of existing creditors claims. In fact they've barely reduced expenses (as opposed to cash outflow) at all. To my mind none of that complies with their duties as administrators.

[CropleyWasGod]

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Ah got you, I think .. the players that negotiated deals will have their contracts jump back up again and may continue to take wages rather than leave (for free?)? And D&P may decide to let them do this if they view them as a "sellable" asset?

The whole story of the re-negotiated contracts is not clear. It seems that each player negotiated their own deal. For example, some may be entitled to walk if there is a better offer elsewhere.

[CropleyWasGod]

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If the reports are true I think I agree with Hibs Class. The administrators have been running the club at an accounting loss but have disguised the fact by deferring cash outgoings and increasing creditors, thereby reducing the value of existing creditors claims. In fact they've barely reduced expenses (as opposed to cash outflow) at all. To my mind none of that complies with their duties as administrators.

But the whole point of the exercise was to buy time, to enable them to sell off RFC as an attractive going concern. Had they been able to do that, at a decent price within a decent time-frame, I don't know that the value to creditors would have been reduced.

In hindsight, of course, the whole approach seems to have failed. I am in two minds as to whether that is D&P'S fault (it would have been nice to be a fly on the wall), or whether they were always farting against thunder.

[green glory]

D+P are quoted as saying on the 3rd of May that a CVA was 'no longer possible'.

To still be talking about a possible CVA at this stage is ridiculous.

[Smidge]

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If the reports are true I think I agree with Hibs Class. The administrators have been running the club at an accounting loss but have disguised the fact by deferring cash outgoings and increasing creditors, thereby reducing the value of existing creditors claims. In fact they've barely reduced expenses (as opposed to cash outflow) at all. To my mind none of that complies with their duties as administrators.

If they've been happily accumulating more creditors that should be enough to get them kicked off the case. Once directors of a company are aware (or should have been) that they are trading insolvently, then any new debts are their personal liability. Not exactly sure if this is the case for administrators, and the situation wouldn't be exactly analogous, but they shouldn't be allowed to put themselves in such a position.

[Mikey]

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The whole story of the re-negotiated contracts is not clear. It seems that each player negotiated their own deal. For example, some may be entitled to walk if there is a better offer elsewhere.

Can we sign Steven Whittaker and play him in the final?

[HFC 0-7]

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Their strategy at the beginning was to cut costs to enable them to trade until "the end of the season". I am guessing that, in their minds, they meant the end of May.

(According to an earlier poster, they are due £1m (?) from Everton for Jelavic at the end of the season which may buy them more time, or may be nabbed by UEFA, or may pay D&P's hotel tab. )

It was me that said that jelavic money is due, but is there not a point where they need to stop money from debtors to enable them to keep trading and start thinking about using that money to pay creditors. If I was a creditor I would be starting to get worried that the pot is getting smaller and smaller.

[green glory]

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It was me that said that jelavic money is due, but is there not a point where they need to stop money from debtors to enable them to keep trading and start thinking about using that money to pay creditors. If I was a creditor I would be starting to get worried that the pot is getting smaller and smaller.

If I was a debtor I think I'd be sitting tight on my wad.