Quantcast

Insolvency, how they got here, what next

1099

I’ve been trying to think if there are circumstances where a company has appointed an administrator when they have been paying all debts when due.  Newco Rangers are, to the best of our knowledge, paying creditors when due and have enough cash to continue to do so until the anticipated arrival of cash receipts from new season ticket sales.  They are, therefore, also able to fulfil obligations to current season ticket holders to stage football games.

It may be advantageous to the club to call in the administrators, because we all know how this story ends, but before you ask an administrator to ‘do his thing’, you need to give him a job to do.  Right now a Newco Rangers administrator would be able to pay all creditors when due – and would have money left over.

Under these circumstances, an admin would have difficulty breaking the contracts necessary to reduce costs for next season.  Before a court would agree to appoint an administrator appropriate justification would need to be found, and I don’t see it, yet.  There may be as-yet unpublicised justification, but I suspect it would require a thoroughly creative, creative accountant, to produce it.

Season ticket sales for next season imposes an obligation to stage games all the way through to May 2015.  If the club have little or no chance of meeting obligations between now and then, the directors must recognise this fact when it formally becomes apparent, stop accepting season ticket money, and appoint an administrator to protect creditors’ interests, before they start to consume this cash to pay for day-to-day expenses.

This is the point administration would normally be considered.

There has also been a great deal of hot air about trading insolently and illegally.  Companies are allowed to trade while insolvent if they have a reasonable belief that they will be able to generate enough cash to pay creditors when due.  Right now, for Newco, this means they can continue to trade while season tickets are on sale.  Doing so beyond the renewal deadline, even in the face of terrible sales, is legally justifiable.

The same goes for claims of foul play over Graham Wallace’ pronouncements in December that his club had enough money to get to the end of the season.  It was simply wrong that Newco had enough money to get to the end of the season, but projections – any projections – are so caveat-dependent there is no way the police will do anything more than take a cursory look at the issue.  Whoever reported Wallace either doesn’t know the mechanics of projections or is simply trying to pee in the Bovril.  If you’re visiting Ibrox soon, avoid the Bovril.

Flying a kite, in the form of a proposed share issue in the autumn, will legally allow the directors to gobble up season ticket money between now and then.  If/when investigated following an insolvency event, directors can point to the £22m share issue in 2012 as an example of what they planned to do once the season ticket cash was gone.  In short, they can trade throughout the summer, until whatever money they bring in is spent, without fear of personal rebuke or liability.

I was reminded in an article in The Herald this morning of the critical move, made back in 2012, which brought the club to its knees today.  “The Rangers Supporters Trust urges fans not to renew season tickets”.

This stance was adopted in an attempt to force Charles Green to sell out to the Blue Knights group.  Green was forced to ditch his sustainable business plan, promise to spend big, reward his manager with a contract worth circa four times as much as the one on offer and slash season ticket prices.  The original plan was to pay players no more than £50k p.a., retain the manager on £200k p.a. and ask fans to back the future by buying tickets at full price.

Notwithstanding the limitations of the manager, Newco should have reached the Premiership with money in the bank from the IPO, while the original investors in the club, including Green, could have taken the long view, and avoided the unseemly haste to get their cash out.

They would have been a significant force to be reckoned with, Celtic’s guaranteed ticket to the Champions League qualifiers would have been competed for, for at least a season.  If you see Paul Murray, any other Blue Knights, or their performing puppets, thank them for all their work.

Big Picture: Find the lady

Keep an eye on the property assets.  The Rangers FC Ltd’s major creditor is also their only shareholder, Rangers International PLC.  After an insolvency event RIFC would be entitled to acquire property assets to compensate for their satisfied debt.  Once this happens they can jettison TRFC Ltd to its fate.  They can sit as landlords for as long as TRFC can pay rent, or use their assets for a mixture of landfill (Ibrox) and housing (Murray Park).

Big Picture: Fundamentals

While considering all these fast-moving events, don’t lose sight of the overarching fundamentals.  It costs circa £17m to operate Ibrox and Murray Park as football venues, before you employ a footballer or coach.  No one has suggested how any club in Scotland, with this level of infrastructure to support, is viable without regular Champions League income.

There is a working assumption in some places that a Rangers brand can phoenix indefinitely.  This is clearly not the case, a newco takes tens of millions of pounds and tens of thousands of people.  One of which will almost certainly not be available next time around, the other of which is in some doubt.  My money is on Sandy Easdale’s hunch, that this toxic bird will rise from the ashes only once.

Congratulations to Kris Commons on his enormously deserved Player of the Year award.  He and the magnificent Lisa Hague are a credit to the club, and to the values demonstrate so often.  As a player, Kris has been peerless; so valuable, so in tune with his surroundings, he could have been born wearing green and white hoops.

We have a few tickets available for the Supporters’ Association 70th Anniversary Dinner Dance this Friday at Celtic Park.  It’s always a great event, let me know if you would like to be there, celticquicknews@gmail.com

Signed copies of Yogo Bare available below:


Select Shipping Options




Click Here for Comments >
Share.

About Author

1,099 Comments
  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. ...
  10. 29

  1. pesky logging in malarkey.

     

    My bucket list of life remains incomplete.

     

    Congrats Bhoylo83 (thro gritted teeth!)

     

     

    any chance we could make today ‘World Peace on CQN Day’?

     

     

    If that’s us after a 6-0 WIN!!!…

     

     

    HH jamesgang

  2. macjay1 for Neil Lennon on

    macjay1 for Neil Lennon

     

    12:12 on

     

    28 April, 2014

     

    kitalba

     

    12:03 on

     

    28 April, 2014

     

     

    So the division is the fault of those who support the Green Brigade,

     

    ————————————————————————————————————————-

     

     

    The G.B. have divided the support.They take the blame. Those who support them support division.

     

    I don`t.

     

     

    What does Lenny have to say about their contribution? The Bobby Sands banner.The weekend `s offering.

     

    Does anybody care?

  3. ……cos when someone like Weefra comes on here last night and then goes straight off in despair then the whole CQN ‘family’ should stop to take a wee at itself….

     

     

    Only IMHO of course….

     

     

    HH jamesgang

  4. Dbbia

     

     

    I was on the PC at work. A wee voice to me to open that link on my (personal) iphone.

     

     

    Thank you, little voice in my head….!

     

     

    HH jamesgang

  5. Hamiltontim is praying for Oscar on

    Turkeybhoy

     

     

    I went to the trouble of finding my post in reply to your question last night, you know, the one where you claim that I replied yes to.

     

     

    Hamiltontim is praying for Oscar

     

    22:46 on

     

    27 April, 2014

     

    Turkeybhoy

     

     

    My opinion (not verdict as you refer to it) is that LG may have sung that song.

     

     

    I’m not sure what else you want me to say.

     

     

    ————–

     

     

    As I’m sure you’ll agree, the reply doesn’t back up your claim.

  6. macjay1 for Neil Lennon:

     

     

    So what you are saying is that those who oppose the inclusion of the Green Brigade are in the right, and those who support their inclusion are in the wrong.

     

     

    Have I got your interpretation correct?

  7. jamesgang

     

     

     

     

    12:19 on

     

     

    28 April, 2014

     

     

    ……cos when someone like Weefra comes on here last night and then goes straight off in despair then the whole CQN ‘family’ should stop to take a wee at itself….

     

     

    Only IMHO of course….

     

     

    HH jamesgang

     

     

    ***************************************

     

     

    Apols – should read “a wee look”….it’s wasn’t intended as a caption competition.

     

    Lord knows, that’s prob the last thing we need right now!

     

    Tears, snotters, handbags, the lot!

     

     

    HH JamesGang

  8. This place is like the World Wrestling Federation. Lots of feuds. Perhaps we need more spandex though.

  9. macjay1 for Neil Lennon on

    bourne

     

     

    Trivia time.

     

    Cucaracha…….cockroach.

     

    The name given to the car of one of the revolutionary leaders.

     

    Zapata?

     

    Wiki disagrees,but what would they know?

  10. Gee whizz Paul that must have taken you ages to write as I took me ages to read and digest -well done once again for keeping your finger on the pulse -let them away with nothing

  11. Well done to Kris Commons on his POTY award last night. He spoke well and managed to resist from lamping the host, Peter Martin, when he compared the size of Commons’ arse to that of Kenny Dalglish.

     

     

    Good turn out too from Celtic players and management at the bash. And 10/10 for effort to the player who tried punching significantly above his weight by attempting to give curler Eve Muirhead some chat.

     

     

    A big shout out too for Lee Wallace who was bursting with pride at being voted the best player in the 3rd tier of Scottish football. Bravo!

  12. bournesouprecipe on

    DBBIA

     

     

    Wee Christina could shade two midgets at high noon

     

     

    Fundamentals CSC

  13. John O’Neil

     

     

     

     

    12:25 on

     

     

    28 April, 2014

     

     

     

    This place is like the World Wrestling Federation. Lots of feuds. Perhaps we need more spandex though.

     

     

    Och away John…this place is festooooned in the stuff already!

     

    Tell me, does my bum look big in this leotard?

     

     

    ;-))

     

     

    HH jamesgang

  14. macjay1 for Neil Lennon on

    kitalba

     

    12:23 on

     

    28 April, 2014

     

     

    No,Kit.

     

    I do not support the division of our support.

     

    Whether it be leftist,rightist or centrist.

     

    Fascist,communist, Maoist,Pol Potist.

     

    All inclusive,irrespective of race ,creed ,colour or political affiliation.

     

    Just don`t stick your agenda on Celtic,because inevitably you will offend those who disagree with your agenda.

     

    And you will tempt those who disagree to start an opposition group.

     

    And why not?

  15. Apols all.

     

    Seems the image of me in a leotard broke the blog!

     

    I shall shuffle off in disgrace and leave you all to enjoy your lunch as best you can…

     

     

    meaculpaCSC

     

     

    HH jamesgang

  16. jude2005 is Neil Lennon \o/

     

    12:35 on

     

    28 April, 2014

     

    hoopy do

     

     

    Wd that be a 15 denier stocking ur on abt??

     

    ——————

     

     

    of course, only the best quality will do…

  17. BCW,

     

     

    No I do not see proof in that recording that LG was leading the song.Can you hear him singing,can you see him singing?.No.Does he sit down a couple of seconds after the song begins?.Yes.Not a shred of conclusive evidence.To get a conviction,you know as well as I do that,to prosecute,it has to be proved “Beyond reasonable doubt”.Anyone looking at that evidence,would find it impossible to convict.Anyone except a few on here with an LG agenda.And maybe an Edinburgh jury.

     

    I am saying nothing more on this subject.I will let the law and Celtic handle it.

  18. ‘It was simply wrong that Newco had enough money to get to the end of the season, but projections – any projections – are so caveat-dependent there is no way the police will do anything more than take a cursory look at the issue.’

     

     

     

    ####

     

     

    The fact that they don’t have, and never have had, access to a normal line of credit, perhaps makes the directories responsibilities more onerous than would otherwise be the case.

  19. Turkeybhoy

     

     

    12:43 on 28 April, 2014

     

     

    What’s the chances there might be other videos of the same event?

  20. “The G.B. have divided the support. They take the blame. Those who support them support division.”

     

     

    “And you will tempt those who disagree to start an opposition group.

     

    And why not?”

     

     

    Your words mate. Your words. You said I support division. No I don’t and I don’t think anybody else who supports the inclusion of the GB does either.

     

     

    So you believe in all inclusive, I’m glad of that, and if it is true, why don’t you support the Celtic Supporters – who through no fault of their own – are now barred from watching games at Parkhead?

     

     

    Or is it really just Jeanette Findlay you hate, even though she pays for a season ticket and is a share holder of the PLC?

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. ...
  10. 29