Blue Knights lay it on the line: Newco will fail, too late for CVA


This afternoon the Blue Knights (plural!) held a media conference as Paul Murray and Brian Kennedy explained their “credible plan” to rescue Rangers.  The quantum of their bid was:

£5.5m cash on delivery of a CVA, £500k of which is for delivery of Craig Whyte’s shares.
£2m dependent on European earnings in the coming years.
£3.5m the company will collect from those who currently owe Rangers money.

Uefa have confirmed that they regard UK companies who dispose of debts via a CVA to have breached their insolvency rules and therefore be ineligible for European competition for 3 years.

It is likely that the administrators or any liquidator would be able to collect much or all of the £3.5m earnings from Rangers debtors.

Mr Kennedy said “the tax case is irrelevant to this CVA”.  Mr Murray was a director of Rangers during their controversial EBT period which led to the big tax case.  The tax authorities may consider the “the tax case” more relevant than Mr Kennedy.

Mr Murray and Mr Kennedy were both clearly exasperated that Duff and Phelps felt unable to accept their offer to take the club through a CVA.  Mr Kennedy could not have been clearer that attempts to establish a Newco would fail, that only a CVA would enable Rangers to survive and it was now too late for this.  On Radio Scotland last week Mr Murray explained that, in his view, a CVA was necessary as a Newco could not survive without European income for three years.

Throughout the media conference it occurred to me that perhaps they don’t know Uefa’s rule on a CVA.  Unfortunately the question was not put to either man by the media.  When asked if they knew if the other bidder had put more money on the table Mr Kennedy said, “I don’t care if [ours is]the largest bid”.  Perhaps, but creditors will, and under an enormous amount of scrutiny, Duff and Phelps are likely to car a great deal.

It will be interesting to hear how Duff and Phelps respond but in summary, my two key questions are:

Would HMRC accept a CVA from a director of Rangers during the operation of their EBT scheme?*

How deliverable is the £2m dependent on European income considering a CVA would exclude Rangers from European football for three years?

The plan was flush full of irrelevant details they had clearly spent a lot of time on, such as the non-exec support of former managers, and a Rangers FC Constitution, forbidding the club from spending more than it earned, but sounded light on how it would convince HMRC to accept a few pennies in the pound from a company with such a chequered tax history, and was potentially slapdash on the European income element.

*Mr Murray suggested he would withdraw from the consortium if Craig Whyte objected to his participation but the lack of attention to HMRC’s view on him appeared to be an obvious oversight.

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  1. brimmer on 11 May, 2012 at 16:59 said:



    I swear that was like that character Klunk in Stop the Pigeon.



    Just needed ol DD to say ‘what’d he say muttley?’




  2. Neil canamalar Lennon hunskelper extrordinaire on



    anything on the lloyds staff ???

  3. I would like to thank the blue knights and brian kennedy for helping


    me get my first ever first,you lot must all have been peeing yourselves laughing


    at their press conference that you couldnae post





    BOBBY MURDOCH’S CURLED-UP WINKLEPICKERS on 11 May, 2012 at 17:02 said:





    Did Neil ask if he could serve his touchline ban in your armchair since you obviously won’t need it?

  5. Repost



    I found this press conference somewhat sinister, the BK surreptitiously feeding the bears that if the huns are liquidated then it’s all the fault of the administrators. If I were Clark and Whitehouse I would seriously be thinking about hiring some heavies, just add it to the bill, to follow me around.


    These are bullying tactics by Kennedy, basically putting pressure on Bluff and Bluffer.


    I hope the irrelevant HMRC decides to have a in depth look at Kennedy’s companies, that’ll put the wind up him.


    You’d have thought that they would have given the questioners some decent microphones, couldn’t hear half the questions. Roll on 9 am tomorrow morning then.

  6. Tax-man.



    We don’t need no tax-man.



    We don’t need to speak about no stinkin tax man.

  7. looked to me as if they were trying to get rangers fans to pressurise the administrators in to a sale to the BK

  8. O.G.Rafferty on 11 May, 2012 at 16:22 said:


    ”Alex Thomson’s latest



    As the tribunal which punished Rangers FC for bringing the game into disrepute recently, publishes the reasons for its findings, we gain an astounding insight into a major UK football club completely out of control.”



    I don’t know if you have Alex Thomson’s ear, but if you do, could I suggest that if he wants a historical perspective on how thems have always done business he should read Law, Life and Laughter by Irvine Smith QC. In particular the chapter dealing with the Ibrox Disaster.



    Irvine Smith was the Sheriff who heard the test case raised by one of the victims of the disaster. He found against Rangers. The judgement was never published and Smith takes the opportunity in his book to make it clear exactly how Rangers negligence lead to the loss of sixty six lives and how they tried to cover up their negligence and failings. His criticisms are devastating and give the lie to the claim that Whyte, and maybe even Murray, were aberrant figures in the otherwise distinguished panoply of owners of the club. They weren’t.



    A couple of quotes give a flavour of what Sheriff Smith thought of the conduct of the club in the era of John Lawrence.



    ”I found the evidence in support of the Rangers version unimpressive in the extreme. Mr Hope, in evidence, vacillated among his being unable to recollect such a meting, his denying any such meeting, his possibility of having the dates wrong, being mistaken, admitting that he could have forgotten, stating that if he had attended such a meeting he would certainly have recalled it, and so on. There was hardly any variation on the theme of equivocation- and on that theme there are many variations-to which he did not resort. The evidence here is such that it had to be read to be believed.”



    ”If the verbal testimony of the defenders’ witnesses, however, revealed little, their written records, produced in court,revealed even less. And if the extracts from the records produced in this case were what they purported to be, rarely can an organisation of the size and significance of Rangers Football Club have succeeded in conducting their business with records so sparse, so carelessly kept, so inaccurately written up- if indeed ‘inaccuracy’ is not too mild a word to describe one particular minute- and so indifferently stored.”



    Sound familiar?

  9. !!Bada Bing!! on

    TBK Song ” and we promised you Graeme Souness and Walter Smith……..”



  10. O.G.Rafferty on

    Neil canamalar, 2012


    Well, funny you should ask. Let’s just say next week could be very interesting…

  11. Apart from making complete fools of themselves what are the Blue Knights (Who say No Money) trying to do?



    Is this all about positioning themselves to be at the forefront of a new club?



    These are educated people, I hesitate to say intelligent, yet their thinking puts me in mind of a plan a P7 pupil who loves Rangers might come up with to save them only to be given a patronising pat on the head and told to run along by the teacher……..



    Pathetic stuff.



    Who are they trying to kid? The fans? Themselves?



    I am no longer laughing but I am cringing. Cringe, cringe, cringe. Stupid stupid peepul





    Sounds as though you were none too impressed by the utterings of the blue knights.



    Do you feel like spilling the beans on those utterings which HAVE made an impression on you in the last few months?


    GORDYBHOY64 1703



    What were the odds on that?

  14. Uncle Fester on

    Oh the weather outside is frightful, but admin is so delightful,


    And since they’ve no place to go,


    Let Them Go! Let Them Go! Let Them Go!



    Good riddance. . . . .

  15. hoopeddreams on

    Deliasmith @ 16.16



    Many thanks for your highlighting of certain comments made by the tribunal.


    It just goes to show how contemptible McCoist’s comments were to the media. Utterly premeditated and calculated to expose the individuals who made the decision to personal danger.



    He disgusts me.



    On a brighter note, I was heartened to read AT’s comments earlier in the day concerning the appeal tribunal. I was not aware – although I had hoped this would be the case – that the appeal tribunal had the power to increase the penalty. This is a power which the Court of Criminal Appeal has when dealing with appeals in criminal cases in Scotland. The danger is that anyone seeking to appeal their sentence runs the risk that they will recive a stronger penalty than the original one.



    It used to be the case in Scotland that an advocate who presented an appeal where the client had their sentence increased became a member of the “hole in the head” club. The name derived from the notion that you needed a hole in the head to have instructed your client to go ahead. Worse still was the fact that the appeal could not be withdrawn once commenced except with leave of the court. This sometimes led to embarrassing scenes where advocates realised halfway through an appeal hearing that they would be unsuccessful but could do nothing to stop the client from going away for far longer than the original sentence.



    The findings at first instance against Rangers are completely damning. The panel members have explicitly drawn the attention of the appeal tribunal to the fact that they considered expulsion from the league but decided not to impose that penalty. To have even considered it is a sign that this was an extremely serious set of offences. Not that you would have had that impression from the MSM. It is also a signal to the appeal tribunal that expulsion may yet be on the cards.



    I would not be entirely surprised if the appeal is withdrawn at the last moment. Of course, other events may overtake this process in the meantime. However, if the appeal goes ahead, there is a real risk that expulsion may yet be considered, Futhermore, even if the appeal tribunal decides not to impose that sanction, it may lay down a marker for any future decisions about the conduct of the club. This is in turn could make the SPL’s task in attempting to keep Rangers in that division a lot harder if the Harper Mcleod enquiry uncovers significant wrongdoing by the club in the regard to double payments.



    So, Rangers’ lawyers will have this question for their clients prior to Wednesday:



    “Do you feel lucky, punk? Well, DO YA???????

  16. Did I hear this correctly? I thought Kennedy said that because the administrators had been appointed by the court they were legally bound to keep the fans happy? I thought they were legally bound to get as much for the creditors as they possibly could!




  17. ernie lynch on 11 May, 2012 at 17:10 said:



    O.G.Rafferty on 11 May, 2012 at 16:22 said:


    ”Alex Thomson’s latest



    As the tribunal which punished Rangers FC for bringing the game into disrepute recently, publishes the reasons for its findings, we gain an astounding insight into a major UK football club completely out of control.”



    I don’t know if you have Alex Thomson’s ear, but if you do, could I suggest that if he wants a historical perspective on how thems have always done business he should read Law, Life and Laughter by Irvine Smith QC




    I ordered the Irvine Smith book from Amazon some time ago and they can’t get me one for love nor money. Though they did take my PayPal on order.



    Could someone be buying them all up?



    Media House perhaps?

  18. BMCUW,


    must have been a 100 to 1 shot,not sure if this gets me an


    invitation to the poster of the year awards,gonna buy a tux just in case ;-)))

  19. sparkleghirl on

    Re the appeal. Are they appealing the verdict, or the sentence?



    In either case, what chance of success can they have? That catalogue of crimes is damning and going by the rulebook the penalties should have been much greater.

  20. BOBBY MURDOCH’S, it was high on irrelevance but huge questions unanswered. If that’s it, I can see why it was rejected. More time clarifying rules and concentrating on creditors, less time worrying about a Constitution.

  21. leftclicktic on

    philhoopyloguewantsthebighouseofpainclosedasap on 11 May, 2012 at 13:42 said:


    Never mind newco. At 1.05am this very morning on way to hospital a new member of the Celtic Family, Eirinn Christina Logue was born in my car at the side of the road in Corofin, Co Clare. I can’t believe i delivered a baby! Mom and baby ghirl doing well. I’m away for a wee sleep.


    Congratulations to the proud parents, and welcome to the celtic family Eirinn Christina Logue



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