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Prognosis for trading with criminally acquired assets

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By on CQN BLOG & Comments

So you buy a business and then find that the entire structure and assets of company are subject to a police investigation, where it is alleged that the assets were criminal acquired. That’s a serious problem, but one which will take several years to manifest. Let’s call that Problem A.

Problem B is that you have also established that the business needs to raise cash. This is an acute problem which will manifest in a matter of months.

What’s the prognosis?

It could be 2018 before a verdict on Problem A, the criminal trial, is reached. If it’s not guilty, there are no consequences. If it’s guilty, the rightful owners of the criminally acquired assets can apply to the court to recover them. This doesn’t mean they will apply, but if they do, it’s highly likely that the court will make the award in favour of the rightful owners.

For our example, the rightful owners are creditors of a failed business, represented by a liquidator. It’s the liquidators job to get as much money for the creditors as possible, and in this instance, HMRC is the creditor with overwhelming influence.

There’s an added complexity. Although none of your directors are contaminated by the criminal investigation, there’s a concern that some of the accused are beneficiaries of shares in the company, or commercial contracts which the company has entered into. In short, the accused have left the stage, but they could still have a considerable financial interest in the success of the business, which may steel the resolve of the most influential creditor, HMRC. HMRC know such tactics well and would be reluctant to allow a convicted criminal to profit from their enterprises.

As far as Problem A is concerned, you have to allow the law to take its course and hope for a not guilty verdict. Should a guilty verdict transpire, you then have to hope to cut a deal with the liquidator (representing HMRC et al) to allow you to continue to retain title to the assets.

If the creditor was malleable, willing to come and go with you, this would be possible. Especially as the liquidator may have the opportunity of pursuing the professional indemnity (PI) insurance of some of the accused, who provided professional services relating to the transaction. Grab the PI money for the creditors and allow you, your shareholders, and the beneficiaries of your commercial contracts, to continue to benefit from ownership of the assets.

A great deal of uncertainty surrounds this, however. You would make it your business to get as close as possible to the liquidator. Make sure there’s no limit to the hospitality on offer, but ultimately, HMRC will decide how matters proceed. It may even be the case that PI money is pursued, and the assets are recovered and put on the market. There will, after all, be an eye-watering level of professional fees to cover.

Problem B is, as I said, more acute. Raising money for a business which is losing money and burning cash is difficult enough, but if there is a possibility the business has been built upon criminally acquired assets, the challenge is herculean.

The criminal trial may not conclude until 2018 (or later), and it could take a couple of years thereafter for the liquidator to petition the court for the assets and then dispose of them. In short, the assets could come back onto the market around 2020.

Problem B is for you to fund a trading deficit until 2018, then hibernate for a couple of years, and bid enough to buy the assets at auction in 2020.

In the short term all you can do is try to convince as many people as possible to become co-investors. Or put the money in yourself, of course (sorry, I know how you feel about that prospect). Then you could shower the liquidator with the kind of corporate hospitality illustrated in The Wolf of Wall St, and hope you’ve got enough credit with them to have them batting for you at the creditors’ meeting.

The prognosis? It’s not the fact that you are possibly trading with criminally acquired assets, or that your entire enterprise could be shut down with the drop of a sheriff’s gavel, that would worry me. There’s nothing you can do about that, so ignore it. The big worry is how raise the £25m to keep the lights on until you discover if you’re business’s founding fathers acted within the law.

Good luck with that.

This is an absolute minefield. No one is in control. Three years ago I suggested the best thing to do was to start from scratch at another location, this is the only way to proceed with certainty.

Share premises in Paisley, or Cowdenbeath or wherever will take you. Hope that you can carry some brand affinity (although clearly you’ll not be able to use any disputed IP, including brand names). Appoint reputable people to your board and get back to doing what you really want to do.

Behold to no one contaminated by the decades of misrule. Cut loose those who hold the onerous contracts. Allow the assets to come back onto the market in due course, knowing that by then you have all the customer goodwill you need to ensure there is no point in anyone bidding against you at auction.

The future will be nothing like the past, but at least you’ll have a future.

Celtic are the first UK club to react to the refugee crisis

“This is absolutely the right thing for us to do. Our club was formed by immigrants, many of whom had escaped the devastation of the great famine.” Tony Hamilton, Celtic FC Foundation CEO.

Proceeds from Sunday’s Jock Stein 30th Anniversary game will go to alleviating suffering of the refugees. The club will appoint a charity with expertise to ensure the assistance is productive.

I know we go on about the Foundation a lot, but it’s the most important part of our club, today and every day.  Never let this change.

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  4. What is the Stars on

    Sips

     

    In Ireland all bookies are” best odds guaranteed”

     

    So if you back a horse and take the current price ( let’s save 5 / 1) and the horse wins at 7 / 1 you will get paid the better price ( 7 / 1 )

     

    However in the good old UK I believe not all bookies operate that system. You would need to check with the relevant bookie as to whether they give best odds guaranteed before betting

  5. RWE on

    Not fussed about Scotland, which kind of makes me feel awkward and conflicted.

     

     

    My first ever game of football was Scotland v England at Hampden.

     

     

    The SFA/Glasgow Corporation/Glasgow Schools Football/ etc sent 2 tickets for the boys enclosure to every school in the city.

     

     

    In St Dominics, Castlemik, someone decided that the tickets should go to two lads who had played for the school teams at some point. I had played a few times for the reserves, but knew nothing about any of this. I just got told to go to the headmaster’s office and was bricking myself.

     

     

    When I got there, another guy from my class was there, so my concern cooefficient increased, particularly when he had no idea either.

     

     

    Harry Tague and I were eventually invited in, and we waited while Mr Murphy footered with all the junk on his desk before looking up with an envelope in his hand.

     

     

    I think I had gone a white colour by now, and then Mr Murphy smiled, opened the envelope and said.

     

    “Well would you two boys like to go to Hampden tomorrow to see Scotland play?”

     

     

    It was 1962 and we won courtesy of Davie Wilson and Eric Caldow.

     

     

    Loved it and wish I still cared.

  8. gordybhoy64 on

    Seeing as I got no reply earlier,may as well ask again,

     

    does anyone know if there is anywhere in Vegas that

     

    will show the game against the sheep

  10. Celtic Mac on

    Paul67 et al

     

     

    Not one shot on target for Scotland if I remember rightly. Poor show all round and as many have mentioned not unlike Celtic’s performance in Malmo. Neither team has picked up where they were towards the end of last season. Will be tough now for Scotland especially if Ireland pick up momentum in beating Georgia on Monday. That said there are still nine points to play for starting with the er World Champions. Would have liked the game to have been played at Celtic Park for that fact alone. That and trying to remember the last time Scotland played a top game at Hampden.

  13. voguepunter on

    gordybhoy64

     

     

    Crown and Anchor on east tropicana used to show our games mate,need to check their website.hh

  16. RobertTressell on

    Roy croppie – that’s exactly it. Exactly. Whatever the lows we experience there are just those moments when it’s just pure…. I don’t know…. There isn’t a word for it….. Just pure Celtic……

     

     

    For all of us Tims Celtic is something that helps to define us.

     

     

    I know some great people. I have a small number of really good friends. Yet the people who are great and good friends and also Celtic people just have this connection that I can’t explain but it draws us that wee bit closer.

     

     

    And I love it. F###in love it…..

  21. sipsini on

    Thanks for the replies re top odds, I’ll be taking my da to the bookies to put his lines on tomorrow morning and tell him about the replies I got… He’ll just say they’re talking shite, just his way:)

     

     

    VP…

     

     

    For some reason they have crawled into a wee hole again, wonder why?

  22. Gordon64 on

    4231 is not football it’s a formation set up not to lose games. It is certainly not the Celtic way. If RD does not adapt its adios.

  26. jamesgang on

    ROBERTTRESSELL on 4TH SEPTEMBER 2015 10:52 PM

     

    Jobo thought no one else knew that song! What a tune. What a song writer. Greatly underapreciated talent

     

     

    –

     

     

    Brilliant choon. Exceptional musical talent.

     

     

    HH jamesgang

  29. Dallas Dallas where the heck is Dallas on

    RWE at 11.03, you mentioned the name , Harry Tague.

     

     

    There was a boy in my year at school called Timothy Tague.

     

     

    I don’t think he would have got a job in any of the shipyards or Barr and Stroud , for example, with a name like that.

  31. RobertTressell on

    Sipsini – when a man’s da doesn’t know better than everyone else it’s a sad day. Mine is,still, thank god, my go to guy for all manner of advice – except emotional stuff of course!!!

  35. Margaret McGill on

    Paul67

     

    the new site is a wonderful idea, however, with all things Celtic these days when it comes to practicalities it is shit. Maybe you should try some Celtic board logic and get rid of anything that requires too much memory.

  37. RobertTressell on

    Funny place is CQN – some time you get a window where there’s a bunch of good guys on who don’t want just to wind people up or get attention…. I’ll not name them but the last few pages are good stuff.

  40. macjay1 for Neil Lennon on

    RWE on 4th September 2015 11:03 pm

     

     

    Out of curiosity…….

     

    Was Mr.Murphy`s Christian name Jack?

  41. Hamiltontim on

    After a busy day and night I’m just on and saw this.

     

     

    THOMTHETHIM FOR OSCAR OK on 4TH SEPTEMBER 2015 1:40 PM

     

    TET

     

     

     

     

     

     

    THE EXILED TIM on 4TH SEPTEMBER 2015 11:56 AM

     

     

     

     

    “The ethos that our club was founded on is sadly lost on many these days.”

     

     

     

     

    ****

     

     

     

     

    ….but. thankfully. not the club.

     

     

    ———

     

     

    Thom, genuine question , do you think the support or the club are more in tune with the founding ethos of Celtic?

     

     

    If I’ve interrupted a heated debate I apologise :-)

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