Generic Sevco / Rangers meltdown thread

[CropleyWasGod]

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Links to the video and text of The King’s speech are given below

https://www.youtube.com/watch?v=dHwtfrsN_f4

Link to text

http://rangers.co.uk/news/headlines/...gs-agm-speech/

I particularly like this bit in the text, “There were individuals on previous Boards who actively contributed to the problems that continue to impact negatively on the business. Thankfully it now appears that justice will be done and those responsible called to account.” He must empathise.

The written statement has no reference to the repayment of the SD loan. The statement by DK s on this issue starts in the video about 8:30. He says:-
“With the ongoing circumstances with Sports Direct the decision was made at the board meeting last night that we should, in fact, endeavour to pay the loan as long as we could raise the funds to do so and I am delighted to say once again the commitment that investors are giving this club it just took me one hour this morning to make phone calls and myself, Douglas Park, George Letham, George Taylor, Paul Murray, and a new investor, John Bennett. It just took me one hour, we’ve got the commitment to the £5M and we’ll be advising SD today that we will repay the loan and start to take control of the retail operations.” Cue applause

The points that spring to my mind are:-
1. The loan from SD and its repayment is one of the biggest issues facing Sevco and has hung over the Sevco board and club for most of this year. It’s an issue that one would have expected to have been considered in detail for some time and for a considered statement to be made at the AGM. Instead we get the written text of King’s speech which contains no reference whatsoever and have King presenting the decision to repay the SD loan in a low key way as if it was a minor peripheral matter. It seems a bit strange that from King’s account the Board would have a chat about this matter on the previous evening and make a total U turn. Also the fact that King had to phone around on the morning of the AGM to get “commitment” to fund the repayment from board members and major shareholders with whom he must surely be in regular touch. Cast in another light one might construe this last minute change of mind and phone calling as a panic measure.

2. I note there is a “commitment” to the payment, we still have to see the cash and the conditions attached. If King has the money that he claims to have why doesn’t he just stump up the cash.

3. Is the last minute decision to repay the loan in any way linked to the impending court case on 9 December, Ashley V King - Contempt of Court for breaching gagging order which is to be heard in the Chancery Court London. I can hear a line of defence “M’lud this is all water under the bridge, the loan has been repaid and the conditions attached to it are therefore a matter of history.”

Interesting. I share your cynicism about the "commitment".

Here's another theory for the about-face. No evidence for it, but it's worth a thought.

I go back to what I said about DK's demeanour when he left Hampden the other day. He was, as they say, chastened. Was that because he'd been told "pay your fine, or we'll go for a winding-up order". If that did happen, DK would know what the implications would be:-

1. administration
2. MASH, as secured creditor, get the assets.

The prospect of that would concentrate minds, and wallets.

So, by ridding themselves of the security, they give themselves a better chance of survival if admin happens.

[Barney McGrew]

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Interesting. I share your cynicism about the "commitment".

Here's another theory for the about-face. No evidence for it, but it's worth a thought.

I go back to what I said about DK's demeanour when he left Hampden the other day. He was, as they say, chastened. Was that because he'd been told "pay your fine, or we'll go for a winding-up order". If that did happen, DK would know what the implications would be:-

1. administration
2. MASH, as secured creditor, get the assets.

The prospect of that would concentrate minds, and wallets.

So, by ridding themselves of the security, they give themselves a better chance of survival if admin happens.

So would that then mean the guys putting up the £5m to repay the loan could do so on the same terms i.e. become a secured creditor instead? If that is the case then it would make sense for them to own the security if they were intending on heading for admin in the near future....

[grunt]

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Was that because he'd been told "pay your fine, or we'll go for a winding-up order".

Have they paid the fine as well as the loan?

[CropleyWasGod]

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So would that then mean the guys putting up the £5m to repay the loan could do so on the same terms i.e. become a secured creditor instead? If that is the case then it would make sense for them to own the security if they were intending on heading for admin in the near future....

Yeah, that would make sense.

The 3 Bears already have (?) £3.5m in loans, so by rolling them all up, it would be a nice wee insurance policy against the ravages of admin.

(It might even allow them to pick up the assets and start again. After all, Green bought them for £5.5m. )

[CropleyWasGod]

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Have they paid the fine as well as the loan?

They've paid nowt so far.

The fine hasn't been mentioned. I just raised it to posit a scenario whereby the fine might be the catalyst for some hard thinking.

[Brunswickbill]

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Interesting. I share your cynicism about the "commitment".

Here's another theory for the about-face. No evidence for it, but it's worth a thought.

I go back to what I said about DK's demeanour when he left Hampden the other day. He was, as they say, chastened. Was that because he'd been told "pay your fine, or we'll go for a winding-up order". If that did happen, DK would know what the implications would be:-

1. administration
2. MASH, as secured creditor, get the assets.

The prospect of that would concentrate minds, and wallets.

So, by ridding themselves of the security, they give themselves a better chance of survival if admin happens.

Another possibility is that the decision on Green's case made the important peepul willing to put up some cash which would go to get MA of their backs rather than paying for Green's lawyers. Which could have led to a late decision being reached. Also maybe SFA/SPFL have panicked at being halued into court and want MA pacified by giving him his cash and that was what was laid out to King at their meeting. Dunno.

[grunt]

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The 3 Bears already have (?) £3.5m in loans, so by rolling them all up, it would be a nice wee insurance policy against the ravages of admin.

Is that allowed?

The timing, as to when the security is taken by the lender, is crucial.
Should the loan have already been advanced and then the security subsequently taken, this leaves such security potentially open to attack by any subsequent liquidator under the Insolvency Act 1985. The basis of attack is that the granting of security may be considered to be a preference. It is therefore vital to ensure that the security is taken before or at the same time as the loan is provided to the company.

http://www.foxwilliams.com/news/882

[grunt]

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The fine hasn't been mentioned. I just raised it to posit a scenario whereby the fine might be the catalyst for some hard thinking.

[CropleyWasGod]

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Is that allowed?



http://www.foxwilliams.com/news/882

Bloody lawyers.

They could still secure the new £5m though, couldn't they?

And....repay the original £3.5m, and borrow a new £3.5m the following day.

[Hibby70]

Think we've found who's behind the JohnJames blog.

[CropleyWasGod]

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Another possibility is that the decision on Green's case made the important peepul willing to put up some cash which would go to get MA of their backs rather than paying for Green's lawyers. Which could have led to a late decision being reached. Also maybe SFA/SPFL have panicked at being halued into court and want MA pacified by giving him his cash and that was what was laid out to King at their meeting. Dunno.

That's all plausible. too.

We won't know until JJ comes along and posits (sorry, Grunt ) the real story.

[Ozyhibby]

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They've paid nowt so far.

The fine hasn't been mentioned. I just raised it to posit a scenario whereby the fine might be the catalyst for some hard thinking.

I'm with you. I can't see any way that the visit to Hampden and the decision to pay back the loan are unconnected.
When he left Hampden, Dave King looked like he had just been told about a death in the family.


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[CropleyWasGod]

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I'm with you. I can't see any way that the visit to Hampden and the decision to pay back the loan are unconnected.
When he left Hampden, Dave King looked like he had just been told about a death in the family.


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Keep at it on the Court diary.

If there's a winding up application in the name of the SPFL................

[Ozyhibby]

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Keep at it on the Court diary.

If there's a winding up application in the name of the SPFL................

Not exactly a court date but BDO or Murray group have to submit their appeal by Wednesday. If they don't then that process is finished and the call for a full investigation will grow a lot louder.


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[Colr]

http://www.scotsman.com/sport/footba...ions-1-3961070

Wel, not really. What he says is someone else might invest in the club in 12 months time but who and why is not certain. Say the £5m loan is being repaid, though but not when.

Do supporters really buy this snake oil?

[grunt]

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http://www.scotsman.com/sport/footba...ions-1-3961070

Wel, not really. What he says is someone else might invest in the club in 12 months time but who and why is not certain. Say the £5m loan is being repaid, though but not when.

Do supporters really buy this snake oil?

Newspapers eh?

How do they get from "... he still feels that £30 million may be needed to produce the quality of squad he desires" to "Warburton to get £30m to fund Rangers’ Euro ambitions"?

Every now and then King, possibly inadvertently, says something completely true, "promotion this season is essential".

I so hope we can do our bit to thwart that ambition.

[Brunswickbill]

https://johnjamessite.wordpress.com/2015/11/27/more-thoughts-on-agm/

[Liberal Hibby]

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http://www.scotsman.com/sport/footba...ions-1-3961070

Wel, not really. What he says is someone else might invest in the club in 12 months time but who and why is not certain. Say the £5m loan is being repaid, though but not when.

Do supporters really buy this snake oil?

That article slso suggests (for the first time?) That they have also raised the £2.5m needed to make the end of the season.

The fact the soft loans are going to be converted to equity also suggests they're planning a share issue. So no new white knights just the unwashed hoarded digging into their Christmas funds or giro cheques...

[CropleyWasGod]

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https://johnjamessite.wordpress.com/2015/11/27/more-thoughts-on-agm/

Also taking the view that the SPFL meeting was significant.

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[greenginger]

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Newspapers eh?

How do they get from "... he still feels that £30 million may be needed to produce the quality of squad he desires" to "Warburton to get £30m to fund Rangers’ Euro ambitions"?

Every now and then King, possibly inadvertently, says something completely true, "promotion this season is essential".

I so hope we can do our bit to thwart that ambition.

And no analysis of King's claim to have the strongest balance sheet of any club in the world.

Easy to have a strong balance sheet if your property assets are valued at £41 million ( purchase price £ 5 m. ) and Brand values of £16 million ( purchase price £ 1.00 ). Balance sheets don't pay the bills.

When I was looking back at their account I notice in post balance sheet events, " the group have contracted the purchase of 5 players. The sums payable including agents costs amount to £ 671,000. "

By saying " payable " rather than " paid " suggests to me the transfer fees were still due when the accounts were signed last month, although I stand to be corrected.

[Smartie]

So…….. the plan is to convert the soft loans they are going to receive to pay of the £5m for the SD loan and (presumably) the £2.5m needed to get to the end of the season into equity (i.e. shares in the club) at an unspecified later date.

Do I have that right?

So the ball is back in Ashley's court then?

Will he accept the repayment of the loan?

More importantly, presumably the conversion to equity will dilute his shareholding - will he be happy about that and is there anything he can do about it?

[brog]

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That article slso suggests (for the first time?) That they have also raised the £2.5m needed to make the end of the season.

The fact the soft loans are going to be converted to equity also suggests they're planning a share issue. So no new white knights just the unwashed hoarded digging into their Christmas funds or giro cheques...

I think John J mentioned they now had the soft loan a couple of weeks ago, he repeats it in his article today. IIRC I commented on it at the time but it seems to have slipped below the Hibs Net radar. FWIW I think JJ's blog today is spot on. Douglas Park etc are now in the position where in order to protect their investments they have to keep on providing & hope there's a profit to be made in the future. They also have to keep on propping King up because his downfall could result in the collapse of the whole house of cards. Short term this spoils our fun, long term the longer Glib & Shameless remains at the helm the better it is for us.

[Ozyhibby]

How did the votes go at the AGM yesterday? Not seen that anywhere yet?


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[greenginger]

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How did the votes go at the AGM yesterday? Not seen that anywhere yet?


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It was done by a card count rather than a show of hands.

Don't know who does the counting !

Announcement at a later date.

[jacomo]

The AGM is surely final proof that King won't be putting anything like £30m into the club.

His bragging about only needing an hour to raise £5m rather overlooks the fact that, if he was true to his word, such ringing round begging for loans wouldn't have been necessary.

Whether he ever had the £30m or not I don't know. But the 'over-investment' promise did its job and got him the top job.

[grunt]

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And no analysis of King's claim to have the strongest balance sheet of any club in the world. Easy to have a strong balance sheet if your property assets are valued at £41 million ( purchase price £ 5 m. ) and Brand values of £16 million ( purchase price £ 1.00 ). Balance sheets don't pay the bills..

Indeed. Someone called Peter Clark on Twitter this morning said, "The "no debt" line is peddled like a badge of honour, when it should be a source of deepest mortification, given the past." I concur.

[Jim44]

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It was done by a card count rather than a show of hands.

Don't know who does the counting !

Announcement at a later date.

[CropleyWasGod]

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I think John J mentioned they now had the soft loan a couple of weeks ago, he repeats it in his article today. IIRC I commented on it at the time but it seems to have slipped below the Hibs Net radar. FWIW I think JJ's blog today is spot on. Douglas Park etc are now in the position where in order to protect their investments they have to keep on providing & hope there's a profit to be made in the future. They also have to keep on propping King up because his downfall could result in the collapse of the whole house of cards. Short term this spoils our fun, long term the longer Glib & Shameless remains at the helm the better it is for us.

Can't help thinking that, if they did have the £2.5m, they would have been shouting about it.

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[brog]

There's a nag called "The Orange Rogue", honest, running at Newcastle, 1.30 today. I suspect King may be punting the £5m on it as its the only chance he'll have of getting £30m!

[grunt]

There's an article in the Record (I know) which claims to set out RIFC defence in the case brought by Ashley about them breaching the confidentiality agreement relating to the retail contract.

I'll link to it, but in case you don't want to read the link, I've also copied it below.

http://www.dailyrecord.co.uk/sport/f...iality-6915178

Rangers claim they knew nothing about confidentiality agreement until Mike Ashley produced it 10 days before general meeting

RANGERS have laid bare Mike Ashley’s iron grip on the club in their court defence against the Sports Direct boss.
The Ibrox side have asked the High Court in London to overturn a gagging order obtained by the Newcastle United owner almost six months ago. Ashley has accused Rangers chairman Dave King of breaching the order, which forbids the club revealing details of controversial contracts signed by the former board and his sports empire. Ashley is seeking damages over an interview with Sky Sports presenter Jim White in July. If found guilty of contempt of court, King could face prison. The case is expected to be heard on December 9 and Rangers are also expected to seek to strip Ashley of his gagging powers.

Papers lodged by Rangers secretary James Blair state the arguments for overturning the confidentiality agreement drawn up with Sports Direct, former Light Blues chairman David Somers and influential shareholder Sandy Easdale. The Record has accessed the papers, which reveal the club’s anger as King hosted yesterday’s AGM at the Clyde Auditorium.

Rangers claim:
● Records relating to the original confidentiality agreement signed by Somers and Easdale don’t exist
● Somers sought no legal advice from the club, no meetings were in his Rangers diary and he had no authority to sign a confidentiality agreement
● Easdale was acting as leader of a shareholding bloc and not a company representative when he agreed to the deal.
Central to the case is a Record article in May in which we revealed there is a seven-year notice period in retail contracts between Rangers and Sports Direct.

Rangers categorically deny leaking any such info and we would never reveal our sources.

But the Ibrox defence papers reveal that not only does the seven-year notice period exist, but it can only be activated once Rangers pay off a £5million loan from Ashley’s company MASH Limited. The loan was drawn down by the old board shortly before they lost control of the club earlier this year – to the disgust of fans who claimed there were other options. Allegations of failings by the old board will come as no surprise to Rangers supporters – and nor will Ashley’s attempts to keep his dealings with the club under wraps. Blair said: “The former board owed duties to Rangers including a duty to keep proper records of their business dealings. “Notwithstanding that duty, records of certain dealings relied upon by Sports Direct International do not exist and matters that might otherwise be admitted or denied are the subject of non-admissions.”

Blair said Rangers were unaware of a signed confidentiality agreement with Sports Direct until they were presented with it by Ashley’s solicitors on June 2 this year – 10 days before the club’s general meeting and nine months after it was drawn up. Blair added: “Rangers are unable to locate any document explaining why Mr Somers signed it and what was said on behalf of SDI to induce him to do so.
“If it was signed at any meeting on September 5, 2014, Rangers do not believe the attendees attended as company representatives.
“It was a meeting of key shareholders arranged to discuss issues impacting on them as shareholders and to review how, as shareholders, they would proceed. “There is no record of the meeting at Rangers and there was no reporting back from it to Rangers. Rangers’ chief executive and finance director were not present. “The meeting is not in Mr Somers’s diary. “Mr Easdale clearly attended in his capacity as leader of a shareholding bloc and signed the undertaking personally. “As far as Rangers are aware, Mr Somers did not take advice from in-house counsel or any lawyer retained by Rangers about whether it should be signed. “Nor do Rangers believe Mr Somers asked for or was given authority to sign the undertaking on behalf of Rangers.”

Ashley applied for gagging orders against the current Rangers board ahead of the club’s general meeting on June 12. He feared directors would lift the lid off controversial contracts agreed with Sports Direct by the former board. In their defence, Rangers insist the applications were unnecessary as King would only have discussed issues in the public domain such as annual accounts – including “how little revenue came to the club from Rangers Retail Limited”. Ashley also acted to gag the board in light of the Record story revealing the existence of the seven-year notice period to terminate his retail contracts. But the Rangers defence papers add: “While this was true until about January 2015, once Rangers had drawn down under the Facility Agreement they were unable to give notice at all without repaying the sums borrowed. Rangers consider that provision to be onerous and one that should not have been entered into. “Had they wanted to stoke up hostility for Mr Ashley, they could have provided this information to the Daily Record. “The fact this information is not in the article is evidence that Rangers were not responsible for any disclosure made.”

Rangers also insist the confidentiality clause has already been breached several times by sources close to Ashley – including Easdale – rendering it invalid. They list seven occasions when newspaper outlets and bloggers have quoted details of dealings and meetings between Sports Direct and Rangers which the club say couldn’t have come from them.

King is refusing to back down in his war with billionaire Ashley, who is also embroiled in action with the SFA after they granted King “fit and proper status” to lead Rangers.

And for completeness, here's JJ's take on it. https://johnjamessite.wordpress.com/...8/kings-bluff/