Generic Sevco / Rangers meltdown thread

[CropleyWasGod]

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I was under the impression they have been due this fine since the five way agreement. The time delay has been caused by the SPFL failure to insist on payment surely CWG. It is why I surmise it to be suspicious the Law Lords have only now ruled on it whence the title is all but sewn up.

That's not correct.

The LNS enquiry imposed the fine in February 2013. The 5 way agreement was set the previous summer.

As for the delay, initially CG's regime put the bill in a drawer and didn't (wouldn't? couldn't?) pay it. The SPFL then wanted to deduct the fine from what was due to RFC. Dave King's regime didn't accept that it was due, and appealed to the Courts; at that point the SPFL weren't allowed to deduct it as it was subject to legal process.

[doddsy]

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That's not correct.

The LNS enquiry imposed the fine in February 2013. The 5 way agreement was set the previous summer.

As for the delay, initially CG's regime put the bill in a drawer and didn't (couldn't?) pay it. The SPFL then wanted to deduct the fine from what was due to RFC. Dave King's regime didn't accept that it was due, and appealed to the Courts; at that point the SPFL weren't allowed to deduct it as it was subject to legal process.

Thank you for clearing up the finer details CWG. Co-incidental then that the Law Lords decision fell just a few weeks prior to RIFC winning the league. If their decision had fallen a few months ago it would have meant RIFC being due readies with the Billy King addition being highly controversial, it is why I said it looked at first glance to be suspicious. Mere co-incidence.

[Brunswickbill]

Extract from RIFC Annual Report 2015

EBT Fine
In 2012, the SPL raised proceedings against The Rangers Football Club plc (Oldco) in relation to the use of EBTs and
following a hearing in February 2013 a fine of £250,000 and costs of £150,000 were levied against Oldco. As part
the agreement to allow Rangers to participate in Scottish Football, there was a clause inserted where it was agreed
that Rangers would become liable and responsible for the imposition of any sanctions by the SPL for any breach of
SPL Rules and or articles by Oldco/Rangers FC (i.e. the £250,000 fine). The Club believes that the SPFL has, through
documents and actions, waived all and any right it may have had to insist upon payment under the clause, thereby
holding the Club harmless in relation to the sanctions. This is disputed by the SPFL.

Within the current SPFL rules there is a provision (known as the offset rule) whereby if any amounts are due to
the SPFL, the Board of the SPFL are entitled to withhold amounts due to the Club up to the value of the amount
outstanding. The Board of the SPFL have determined that it shall use the offset rule to recover the £250,000 fine
from the Club.

As a result of this decision, the Club has invoked Article 99 of the SFA Articles seeking a determination by an Arbitral
Tribunal appointed by the SFA that the sum is not due to the SPFL. The matter will proceed to full hearing on 29th
and 30th October.

Whilst the Board of Directors based on legal advice are confident that the case will be settled in its favour, should the
Club lose the case, then the Club will be liable for the £250,000 fine plus interest and associated costs.

The above extract gives an outline of what has gone on from RIFC point of view. It would be most interesting to get details of RIFC’s case in support of their statement that “the SPFL has, through documents and actions, waived all and any right it may have had to insist upon payment under the clause, thereby holding the Club harmless in relation to the sanctions.” I wonder who /what was done by the SPFL to give RIFC grounds to support this argument. Or was it just a glib and shamless falsehood? No doubt the SMSM will be beavering away to uncover what went on.

[doddsy]

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Extract from RIFC Annual Report 2015

EBT Fine
In 2012, the SPL raised proceedings against The Rangers Football Club plc (Oldco) in relation to the use of EBTs and
following a hearing in February 2013 a fine of £250,000 and costs of £150,000 were levied against Oldco. As part
the agreement to allow Rangers to participate in Scottish Football, there was a clause inserted where it was agreed
that Rangers would become liable and responsible for the imposition of any sanctions by the SPL for any breach of
SPL Rules and or articles by Oldco/Rangers FC (i.e. the £250,000 fine). The Club believes that the SPFL has, through
documents and actions, waived all and any right it may have had to insist upon payment under the clause, thereby
holding the Club harmless in relation to the sanctions. This is disputed by the SPFL.

Within the current SPFL rules there is a provision (known as the offset rule) whereby if any amounts are due to
the SPFL, the Board of the SPFL are entitled to withhold amounts due to the Club up to the value of the amount
outstanding. The Board of the SPFL have determined that it shall use the offset rule to recover the £250,000 fine
from the Club.

As a result of this decision, the Club has invoked Article 99 of the SFA Articles seeking a determination by an Arbitral
Tribunal appointed by the SFA that the sum is not due to the SPFL. The matter will proceed to full hearing on 29th
and 30th October.

Whilst the Board of Directors based on legal advice are confident that the case will be settled in its favour, should the
Club lose the case, then the Club will be liable for the £250,000 fine plus interest and associated costs.

The above extract gives an outline of what has gone on from RIFC point of view. It would be most interesting to get details of RIFC’s case in support of their statement that “the SPFL has, through documents and actions, waived all and any right it may have had to insist upon payment under the clause, thereby holding the Club harmless in relation to the sanctions.” I wonder who /what was done by the SPFL to give RIFC grounds to support this argument. Or was it just a glib and shamless falsehood? No doubt the SMSM will be beavering away to uncover what went on.

Think it was the transition from SPL to SPFL that RIFC were purporting anomalies which nullified the liability. I could be wrong.

[doddsy]

In any case the biggest anomaly was the fine imposed on Newco for Oldco's actions. No legal foundation whatsoever.

[CropleyWasGod]

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In any case the biggest anomaly was the fine imposed on Newco for Oldco's actions. No legal foundation whatsoever.

... .. the Courts have just disagreed with you, however. Are they wrong?

[Spike Mandela]

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In any case the biggest anomaly was the fine imposed on Newco for Oldco's actions. No legal foundation whatsoever.

The biggest anomaly was Lord Nimmo Smith's assertion that no sporting advantage was gained by the use of EBT's...........Que??????

[CropleyWasGod]

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The biggest anomaly was Lord Nimmoo Smith's assertion that no sporting advantage was gained by the use of EBT's...........Que??????

Agreed

[Ozyhibby]

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The biggest anomaly was Lord Nimmo Smith's assertion that no sporting advantage was gained by the use of EBT's...........Que??????

That's when you knew we were playing a rigged game. Our football authorities (incl our own R. Petrie) are only concerned with one thing, a successful Rangers back in the top flight. Shameful.

[doddsy]

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... .. the Courts have just disagreed with you, however. Are they wrong?

I don't think the Law Lords ruled on whether or not Newco is liable for Oldco's debts/actions/liabilities. They ruled on the fact Newco had agreed to shoulder the fine imposed by the then SPL in relation to Oldco's usage of sideletters. It was the agreement issue they ruled on not whether or not the bigger question of should Newco have agreed in the first place to be liable for an Oldco action.

It is one of the many legal anomalies that lie therein which will never be investigated.

It is however unenforcable under the bankruptcy/liquadation rules for a Newco to be held liable for any actions/liabilities by Oldco. Usage of EBT side letters were Oldco actions. If Newco were insistent and appealed it would be found Newco are not liable for Oldco's actions.

It is a red herring issue.

[CropleyWasGod]

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I don't think the Law Lords ruled on whether or not Newco is liable for Oldco's debts/actions/liabilities. They ruled on the fact Newco had agreed to shoulder the fine imposed by the then SPL in relation to Oldco's usage of sideletters. It was the agreement issue they ruled on not whether or not the bigger question of should Newco have agreed in the first place to be liable for an Oldco action.

.

... which is what i have been trying to tell you for the last day or so

[JeMeSouviens]

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In any case the biggest anomaly was the fine imposed on Newco for Oldco's actions. No legal foundation whatsoever.

The fine wasn't imposed on Newco, it was imposed on Oldco.

Newco agreed to take on Oldco's liabilities in respect of football debts in exchange for the transfer of SFA membership from Old to New, ie. they get to pretend to be the same club.

[doddsy]

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The fine wasn't imposed on Newco, it was imposed on Oldco.

Newco agreed to take on Oldco's liabilities in respect of football debts in exchange for the transfer of SFA membership from Old to New, ie. they get to pretend to be the same club.

Agreed is the key word. They were not liable for any of Oldco's actions/debts/liabllities. Is'nt it nice Newco were able to choose to pay SPL fines whilst stiffing all others.

It is a legal anomaly.

[doddsy]

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... which is what i have been trying to tell you for the last day or so

[CropleyWasGod]

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Agreed is the key word. They were not liable for any of Oldco's actions/debts/liabllities. Is'nt it nice Newco were able to choose to pay SPL fines whilst stiffing all others.

It is a legal anomaly.

It's not a legal anomaly when one signs a contract, undertaking to pay certain money. A contract which has just been upheld by the Court.

And they didn't "choose" to pay it. They were forced to agree to pay any possible sanction to get their SFA licence.

[Brunswickbill]

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It's not a legal anomaly when one signs a contract, undertaking to pay certain money. A contract which has just been upheld by the Court.

And they didn't "choose" to pay it. They were forced to agree to pay any possible sanction to get their SFA licence.

Exactly. They were forced to accept it and then chose to contest it.

[Seveno]

I hope the costs that they are due to pay are well into six figures.

[CropleyWasGod]

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I hope the costs that they are due to pay are well into six figures.

IIRC, the costs of the original hearing were £150k.

However, that will double (or even triple) with the latest hearing.

It's the only bit of this that might cause them some angst. Whilst I expect that they will defer payment for a month or so until ST sales kick in, one can only hope that an anxious lawyer (keen to put the deposit down on that villa in Tuscany for the summer) might slap them with a writ. (Preferably before the end of March, please.)

[Brunswickbill]

SPFL Rule I40

The Board may require interest to be paid to the Company and/or to such other Club by such a Club in default on such a sum or sums so due and the balance or balances from time to time outstanding until paid in full, at the rate of 2% above the base lending rate of the Bank of England as same may vary from time to time compounded on the first day of each calendar month and the Board shall be entitled to apply any sums which, under these Rules, would otherwise be payable to the defaulting Club by the Company in discharge of any interest so payable by such Club in default to the Company and/or such other Club in such manner as the Board shall determine.

I'm sure that one of our accountancy experts can give us a quick estimate of interest charges to be levied on top of costs. £££££££££££££££££££££££££££££££££££££

[CropleyWasGod]

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SPFL Rule I40

The Board may require interest to be paid to the Company and/or to such other Club by such a Club in default on such a sum or sums so due and the balance or balances from time to time outstanding until paid in full, at the rate of 2% above the base lending rate of the Bank of England as same may vary from time to time compounded on the first day of each calendar month and the Board shall be entitled to apply any sums which, under these Rules, would otherwise be payable to the defaulting Club by the Company in discharge of any interest so payable by such Club in default to the Company and/or such other Club in such manner as the Board shall determine.

I'm sure that one of our accountancy experts can give us a quick estimate of interest charges to be levied on top of costs. £££££££££££££££££££££££££££££££££££££

Good spot.

Just over £20k I reckon.

At Budge-rates, it would have been about £55k

[doddsy]

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It's not a legal anomaly when one signs a contract, undertaking to pay certain money. A contract which has just been upheld by the Court.

And they didn't "choose" to pay it. They were forced to agree to pay any possible sanction to get their SFA licence.

The legal anomaly is of course the overriding factor that Newco agreed to pay Oldco's fine. The anomaly being if Newco is held accountable for one of Oldco's debts/sanctions regardless of it being a 'football' debt is laughable. Why would a Court of Law differentiate between a so called 'football debt' or any other debt.

The legal anamoly remains the same in that Newco is not liable for Oldco. The rest of the argument is a lawyer would put it 'irrelevant'.

[CropleyWasGod]

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The legal anomaly is of course the overriding factor that Newco agreed to pay Oldco's fine. The anomaly being if Newco is held accountable for one of Oldco's debts/sanctions regardless of it being a 'football' debt is laughable. Why would a Court of Law differentiate between a so called 'football debt' or any other debt.

The legal anamoly remains the same in that Newco is not liable for Oldco. The rest of the argument is a lawyer would put it 'irrelevant'.

As ever, in situations like this, I revert to what the law says:-

"A contract is an agreement between two or more parties which creates or intends to create legally binding obligations between the parties to it."


That's what happened in this case. And that contract was upheld by the Courts.

I'm not a lawyer, so I'll leave it at that. However, if you have an alternative opinion to the Law of Contract, and the learned m'luds.... Dave King might want to hear from you.

[ballengeich]

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The legal anomaly is of course the overriding factor that Newco agreed to pay Oldco's fine. The anomaly being if Newco is held accountable for one of Oldco's debts/sanctions regardless of it being a 'football' debt is laughable. Why would a Court of Law differentiate between a so called 'football debt' or any other debt.

The legal anamoly remains the same in that Newco is not liable for Oldco. The rest of the argument is a lawyer would put it 'irrelevant'.

Can I point out that the decision that Newco has to pay the Oldco fine was not made in a court of law. It was the decision of an SFA tribunal which happens to consist of three judges. That doesn't affect the main point however.

The tribunal did not rule that Newco is legally liable for any or all of Oldco's debts. It ruled that Newco had voluntarily signed a contract to pay for Oldco's football debts and had to honour that contract. There's no legal anomaly in requiring someone to stick to the details of a contract they've agreed to. The only legal anomaly that could be introduced would occur if a company could weasel out of a contract at a later date because a company official didn't like terms agreed to by his predecessor.

Do you think that Rangers supporters repaying some of Oldco's debts to small creditors was also an anomaly? That looks to me like one of the few honourable actions by anyone involved in the saga.

[lapsedhibee]

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Do you think that Rangers supporters repaying some of Oldco's debts to small creditors was also an anomaly?

Hardly an anomaly - Hearts fans did exactly the same thing, didn't they?

[doddsy]

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Can I point out that the decision that Newco has to pay the Oldco fine was not made in a court of law. It was the decision of an SFA tribunal which happens to consist of three judges. That doesn't affect the main point however.

The tribunal did not rule that Newco is legally liable for any or all of Oldco's debts. It ruled that Newco had voluntarily signed a contract to pay for Oldco's football debts and had to honour that contract. There's no legal anomaly in requiring someone to stick to the details of a contract they've agreed to. The only legal anomaly that could be introduced would occur if a company could weasel out of a contract at a later date because a company official didn't like terms agreed to by his predecessor.

Do you think that Rangers supporters repaying some of Oldco's debts to small creditors was also an anomaly? That looks to me like one of the few honourable actions by anyone involved in the saga.

Is it fair to the stiffed creditors of Oldco that Newco can sign a contract arranging to pay debts attached to Oldco whether football related debt or not?

Any footballing or any debt for that matter owed by Oldco should of course be nothing whatsoever to do with Newco. It is a definite anomaly created by the SPL/SPFL and Newco to be seen paying off specific debt owed by Oldco. I think we can all agree it is an anomaly created by the footballing authorities in order to suggest a linkage of Old/New Club.

[doddsy]

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Hardly an anomaly - Hearts fans did exactly the same thing, didn't they?

Surely credit is due to supporters of these clubs who were unhappy at the financial mess who tried to alleviate some of the creditors suffering caused by greedy barstewards like Romanov and David Murray.

[CropleyWasGod]

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Is it fair to the stiffed creditors of Oldco that Newco can sign a contract arranging to pay debts attached to Oldco whether football related debt or not?

Any footballing or any debt for that matter owed by Oldco should of course be nothing whatsoever to do with Newco. It is a definite anomaly created by the SPL/SPFL and Newco to be seen paying off specific debt owed by Oldco. I think we can all agree it is an anomaly created by the footballing authorities in order to suggest a linkage of Old/New Club.

As I have already said, it's in the interests of the "stiffed creditors" to have the football debts paid by someone else.

As for the "anomaly created by the SPL/SPFL and Newco", that's not correct. The FA and Premier League in England have had the "football creditors" provisions in place for 15 or so years. HMRC have tried to challenge them, but the Courts in England have rejected their case. The SFA and Insolvency Practitioners in Scotland have merely followed the FA's lead..... in this case, and that of Hearts too.

[ballengeich]

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Is it fair to the stiffed creditors of Oldco that Newco can sign a contract arranging to pay debts attached to Oldco whether football related debt or not?

It was extremely favourable to football debtors who got money they wouldn't otherwise have received. Other creditors didn't lose out as a result so no - it's not unfair.

Any footballing or any debt for that matter owed by Oldco should of course be nothing whatsoever to do with Newco. It is a definite anomaly created by the SPL/SPFL and Newco to be seen paying off specific debt owed by Oldco. I think we can all agree it is an anomaly created by the footballing authorities in order to suggest a linkage of Old/New Club.

Here I agree with you. The suits at the SFA and SPFL believe that their only valuable marketing asset is the Old Firm. Their principal motivation was fear of the consequences for commercial deals (and their own salaries). The transfer of Rangers membership to the new company shouldn't have happened as it is only supposed to be allowed in the event of a solvent reconstruction of the business.

The old/new club debate has gone on for so long because club has different meanings in different contexts. For football authorities it's the same club because the membership number still exists. (That introduces the notion that the current Airdrieonians is the same club as Clydebank, which neither set of supporters would accept).

At the recent hearing on Green's claim for defence expenses it was made quite clear by the law lords that the law only concerns itself with companies. The concept of a club which exists separately and somehow continues has no legal foundation - it's a metaphysical idea. In fact, companies which operate football businesses aren't clubs at all as a club is an unincorporated group of individuals.

For fans the metaphysical idea is the emotionally important one. I don't support Hibs as a company and don't care about the SFA membership number. Quite what the identity is that I can get so happy or upset about I can't actually define. Unfortunately, the only member of Edinburgh Uni's philosophy department whom I know isn't a football fan.

[doddsy]

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As I have already said, it's in the interests of the "stiffed creditors" to have the football debts paid by someone else. As for the "anomaly created by the SPL/SPFL and Newco", that's not correct. The FA and Premier League in England have had the "football creditors" provisions in place for 15 or so years. HMRC have tried to challenge them, but the Courts in England have rejected their case. The SFA and Insolvency Practitioners in Scotland have merely followed the FA's lead.

It would be helpful to have sight of the argument the FA and Premier League presented as to how Football Creditors should be treated differently from ordinary creditors. Seems a certain anomaly.

[CropleyWasGod]

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It would be helpful to have sight of the argument the FA and Premier League presented as to how Football Creditors should be treated differently from ordinary creditors. Seems a certain anomaly.

I'm sure you could find it online. There's certainly been plenty written about it.

IIRC, the Exeter City case was the one where HMRC challenged it.

From memory, it was accepted by the Courts that, without the FC Rule, clubs would fail as a result of other clubs being unable to pay them. A domino-effect would result, leaving the game in disarray. However, don't take my word of it.... the Court transcript will be out there.