Football debts of Oldco, Newco and EBTs

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I see former Rangers player and EBT recipient, Nacho Novo, was speaking to the media over the weekend about the tax tsunami heading his way, which, apparently, has the potential to bankrupt him.

Over 50 players will be pursued for tax.  Each has a side contract, a condition of which is that in the event that tax is demanded from them in connection with their EBT payments, Rangers would pay up.  Under normal circumstances that would be the end of the story, Rangers, as it was, no longer exists to honour that commitment, but, as a condition of access to the SFA and Scottish Football League, Newco Rangers agreed to honour any football debts of Oldco.

The EBT recipients have been reluctant to rock the boat on the subject of their tax affairs, but that may be tested if the financial interests of former Oldco players and Newco diverge over this issue.

This is (another) one for the lawyers.

Given a choice, I would rather avoid playing a team on their first game with a new manager, as St Mirren will have on Friday when Celtic visit.  Oran Kearney joined the club last week after Alan Stubbs sacking, with Saints second bottom after a win and three defeats.

That win was achieved on the opening day of the season against Dundee, the only team below them, but they have scored once in four league and cup defeats since, conceding 12 in the process.  There is often a dead cat bounce when a new manager takes over.  You can expect bodies thrown into everything on Friday evening.

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  1. The Battered Bunnet on

    A little Monday mischief. Or is it?

     

     

    The notion that Sevco might be liable for the debts of Oldco seems a little fanciful at face value. After all, how could a new company be responsible for what a liquidated company did?

     

     

    However, Sevco obtained membership of the SFA and SFL, together with permission to play in Scottish Football, conditional upon a number of undertakings, all of which defined in the so-called 5 Way Agreement.

     

     

    As Paul notes, one of those undertakings was that Sevco would settle the football debts of Oldco. Although the final version of the agreement has never been officially released, in draft 6 – available to view on t’internet – these were defined as “RFC European football Creditors” and “RFC Scottish football Creditors”:

     

     

    RFC Scottish Football Creditors

     

    ” means [the SFA, the SPL, the SFL], The Dundee United Football Company Limited, Heart of Midlothian FC PLC, Aberdeen Football Club PLC and any other football club in membership of the SFA, which are owed or which may become owed any sum or sums by RFC”

     

     

    The lawyers doubtless are looking at this (or whatever the Final version details) rather closely. Is it conceivable at the legal level that RFC itself, formerly a member of the SFA, and now in liquidation, could qualify as a Creditor given the above definition?

     

     

    If so, clause 2.3.1 applies:

     

     

    “Sevco shall become liable to the RFC Scottish Football Creditors in the sums due to date or which may hereafter become due (but in respect of such sums to become due only in relation to (i) outstanding instalments of transfer fees and (ii) sell-on clauses in transfer contracts for which Sevco receives the full or any part of the transfer fee and is liable to account to the original club for any sell on entitlement arising) to the RFC Scottish Football Creditors by RFC as if Sevco had always been so liable and Sevco shall from and after Completion pay to each of the RFC Scottish Football Creditors such sums as are or may become due to the RFC Scottish Football Creditors in accordance with the subsisting contractual terms between RFC and each of the RFC Scottish Football Creditors (or such variation thereof as Sevco may hereafter agree with any of them) as if the relevant contractual terms had always been between Sevco and each of the RFC Scottish Football Creditors”

     

     

    The rider “but in respect of such sums to become due only in relation to (i) outstanding instalments of transfer fees and(ii) sell-on clauses in transfer contracts” would suggest that even were RFC to qualify as a RFC Creditor given the definition, and the Liquidators of RFC to pursue Sevco, Sevco don’t appear to have inherited debt unless it relates to transfer fees.

     

     

    Doubtless, anyone acting for an EBT recipient player will be keen to bottom this out, but I don’t think Glibby will be losing sleep.

  2. Silver City 1888 on

    Being liable for these debts doesn’t require them to be the same club. They are not. It only has to be regarded as a football debt. To not pay it would not be a breach of contract with the players. They couldn’t force Sevco to pay. It would be a breach of contract with the SFA and other signatories of the 5 way agreement. They would have to have the appetite to chuck Rangers out of Scottish football for this to have any impact.

  3. Rockets like wee Nono is a useful idiot for ither sleekit huns.

     

    The Cat In The Hat, should be where it’s at……

  4. Look out for sporadic but urgent cases of chronic amnesia and “bewilderment” to take hold among a specific demographic.

  5. Back to Basics - Glass Half Full on

    Amusing stuff Pablo. As TBB speculates – a bit of Monday mischief.

     

     

    On a more serious note, perhaps some of the CQN faithful might consider the following?

     

     

    1. Was the oldco liquidation an unprecedented event for the SFA to deal with?

     

     

    2. Were the SFA then (or now) particularly talented or strategically focussed?

     

     

    3. Were the SFA compelled to act urgently?

     

     

    4. Were the SFA under pressure from vested interests?

     

     

    5. Hypothetically, does an organisation dealing with 1-4 above, typically come up with a solution that stands the test of time?

     

     

    6. Most importantly, does anyone have any doubt that Celtic have pored all over the 5WA and have identified the fault lines?

     

     

    This one will run and run.

     

     

    Patience, rather than a pound of flesh for gratification, is required.

     

     

    Hail hail

  6. When Nacho was ill, having heart attacks and strokes etc. (I hope he’s better) did his treatment occur in private health facilities?

     

     

    Surely as a non tax payer he wouldn’t be fleecing us mug PAYE tax payers now, Would he?

     

     

    Surely he would not have the brass neck to avail himself of the NHS’s services?

     

     

    Just a thought.

  7. I assume all the club’s pay the in the SPFL pay the same equal subscriptions to the SFA. So they should all be treated equally shouldn’t they? No matter the size of their fan base.

  8. I reckon that Rangers knew of the potential for things to go wrong. That’s why they ensured the SFA was loaded up with the right type of person, Campbell Ogilvie, Gordon Smith, George Peat and many more. Regan was also part of the scam. Remember Regan had to give Rangers rights to comment and control any statement issued by them. Remember Craig Whyte not approving a statement and demanding SFA don’t issue it. This was obviously not started under Whyte but a carry over from David Murray.

     

     

    Murray controlled not only the SFA but also the SPL with Doncaster and SFL with Ballantyne of Airdrie. All parties to the 5 way agreement were all controlled by Murray.

     

     

    Celtic and all the other teams were caught out by this and only Turnball Hutton and a few others decided to derail the immediate return to SPL by Newco.

     

     

    Whyte and Green were specialists at squeezing money out of distressed companies and that was what they were intended to do. I believe Murray expected to dump the debt blame Whyte and step back in as the sugar daddy and take over the Newco.

     

     

    Of course, Green shafted Whyte, Newco was dumped in the lowest division and Murray was in bigger trouble with Murray group. So Dave King became the RR man to take over the newco

     

     

    The scam worked in part and here we are Sevco pushing for second place and European Football.

     

     

    You cant tell me that the whole thing was not planned in advance. It might not of went according to plan but its worked and the Taxman was bumped

     

     

    I bet that none of the debts, fines and penalties have been paid

  9. GlassTwoThirdsFull on

    Ah, those pesky EBTs. The ones that gave Rangers no advantage because the players would have signed even without them! There was really no need to get involved with them at all!!!

     

    And the double whammy of realising that you weren’t even employed by Rangers Football Club, but some nondescript “holding company”, albeit a holding company that meant so much to the supporters of the club that they set up a fighting fund to try to save it.

     

    Surely the owners of the new company which owns the “same club” (some of whom were involved with the old company), who love to boast about the same club’s trophy haul, could see fit to help out the players who helped them win some of those trophies?

     

    Although the players were EMPLOYED by the “holding company” they must have PLAYED for the club (I’m sure the football authorities could explain how this works), as their medals would match the trophies won by the club during the period they were employed by the company.

     

    Only the right thing to do, surely?

  10. Back to Basics

     

     

    I think Celtic were caught out by the 5Way agreement and had been blindsided by all the placemen. After the event they will have examined these matters for fault lines but the stories which we learned from our Fathers about how the SFA and the Press were all Huns proved not to be paranoid enough.

  11. Paul67

     

     

    Its o.k. Its o.k…………………..they’ve all got assurances that if theres any future bother with HMRC

     

    Rangers will pay any outstanding monies.

     

     

    OH WAIIT CSC

  12. BOBBY MURDOCH'S CURLED-UP WINKLEPICKERS on

    BOURNESOUPRECIPE

     

     

    None of the players,apart from Watereus,raised a complaint at the time. Because none of their agents did.

     

     

    That’s why you employ agents,to ensure that everything is hunkydory,fine and dandy.

     

     

    Every player is bleating about how unfair it is,none have sued their agents.

     

     

    “There,sir,is your enemy!”

  13. Back to Basics - Glass Half Full on

    Bigbhoy – agree Celtic were caught out by the 5WA (It was cooked up and served while the Celtic rep was on holiday).

     

     

    Not convinced we were blind sided by the placemen. Celtic went to war with the SFA on the QT after Peat appointed Smith.

     

     

    BMCUW – joining up your point, Regan never had a rep. Serving tea to the ladies and counting the till receipts at the cricket club was his level. He was a patsy from day one.

     

     

    More widely re: the SFA – several ways to defeat an enemy

     

     

    – do it yourself

     

    – form a coalition

     

    – if you can’t do either of the above, let the enemy defeat themselves

     

     

    I think Celtic, having explored 1 and 2 have opted for 3.

     

     

    Hail hail

  14. BMCUWP @ 3:18

     

     

    A shocking post.

     

     

    As we all know, the old ‘what religion’ question was replaced by ‘what school did you go to?’ in employment interviews. But, we all knew what they meant …

     

     

    And, as we all know, most agents are lawyers. So, your post sounds like a veiled shot at the poor lawyers….

     

     

    On the scale of culpability, I think lawyers are well down the list on this one … Was DMurray a lawyer? How about PL? Campbell Ogilivie?

     

     

    PL is an accountant I think… but no one is saying blame the accountants.

     

     

    have the lawyers not suffered enough in all of this?

     

     

    :)

  15. BSR- Heard from a good source (Hi JM), Hearts have been trying to get rid of Lafferty for about 6 months, causing havoc off the park…

  16. BOBBY MURDOCH'S CURLED-UP WINKLEPICKERS on

    MIKEINTORONTO

     

     

    I would never disrespect an honourable profession like your own,my good sir. Many a friend I have in these islands ho have chosen that path,and sweated blood to achieve their status in life

     

     

    But I think that you are wrong by suggesting that most agents are,by profession,lawyers. But then,I didn’t know that chancer was a profession.

     

     

    You live and learn…

  17. Bada

     

     

    Raised a case of constructive dismissal from Rainjurz in 2012, ( how did that go?) bumped from every club he’s played at.

     

     

    Hertz have no revenue and massive debt to repay for the new stand, which is why his move to Sevco was inevitable.

     

     

    Scores the odd goal and appears to suffer from fainting fits, delighted he is the extent of Seethin Gerrard’s

     

    striking requirements.

  18. sorry tell me to feck off if you want, but BMCUW and MIKE IN TORONTO ,are good friends of mine and this blog, the fact that they are falling out over the club or what the club should have done is feckin atrocious, lets get together on this for gods sake.hh.

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