Look the other way: fixed and floating charges


Yesterday Graham Wallace, Norman Crighton and Sandy Easdale offered to giving a legal undertaking be security would not be given over Ibrox and Murray Park in return for a loan.

Security over a property asset is only one way for lenders securing that asset, it is not the most popular, or even necessary, for the lender to control assets.  More commonly, a lender will require a floating charge over the assets of the company.

A floating charge ‘floats’ over all assets of a company until it is discharged by full payment, or it converts into a fixed charge over whatever assets the company has at that point in time.  This is usually due to a payment default, but can also be triggered by a weakening in one of the company’s trading indicators (say, poor season ticket sales).  A company can only issue one floating charge over all their assets at a time.

If you get a bank loan for a value which is significant to your size, you’re almost certain to sign over a floating charge over the assets of your company, no matter how good a trading record you have.  This is true for Celtic and Manchester United, and would absolutely be true for Newco Rangers.  Stakeholders at Celtic and Manchester United would not bat an eye at this, as there is zero chance of them defaulting.

It would simply not be possible for Newco to secure a significant amount of conventional borrowing without granting a floating charge.

With the floating charge in place, no other creditor can step forward and make a claim on the assets until the secured creditor is satisfied.  In many circumstances, lenders will prefer a fixed charge, as it prevents the borrower from selling key assets before an insolvency event.  With a floating charge, Newco could still sell Ibrox under the nose of the lender and fans alike.

In the event of an insolvency event, the floating charge becomes a fixed charge over whatever assets the sheriff officers can find.  In terms of Newco Rangers this would mean the stadium, training ground, the bike, loving cup, a hundred weight of marble, balls and stripes.  Ebay would be interesting when that lot was uploaded.

Perhaps this is why Celtic have hidden Lennoxtown up a country lane.  “No training ground here, mister, it’s just a field.  I wouldn’t take that car across those potholes.”  Peter’s not daft, you know.

For Newco, giving a legal obligation that the company will not provide a fixed charge over property assets is, quite literally, not worth the paper it is written on, without also committing not to provide a floating charge over all the company’s assets.  It would be “We promise not to give security over only some of our assets, if we give security, it’ll be for everything”.

Legally prohibiting your company from providing a lender with a floating charge also prohibits you from accessing conventional lending.  It would be ludicrous, and could only be considered if the alternative would bring the wolf to the door immediately, in other words, it might bring in season ticket money, but it would ensure an almighty crash as soon as the ticket money is consumed.

For well over a decade the various episodes at Ibrox have been an exercise in making people look the other way while dirty deeds are done. Still, the world’s Gullible Champions show no sign of figuring out what’s going on.  After season ticket money is banked, keep your eye on the floating charge.

The fate of whatever football team plays at Ibrox was set in a firm direction when Rangers incurred unsustainable debts.  As a consequence of this, their majority owner sold his shares to a liquidation expert.  The train was in motion long before May 2011.

Instead of asking Rangers International for a meaningless commitment, an acknowledgement of the situation should be made.  Reality is:

Key assets cannot legally be put beyond the reach of creditors.

The directors must legally look after the interests of shareholders – or be liable for their losses.

The club has a massive trading deficit to fill next year, the year after, and probably in many subsequent years.  Estimates of this being between £30m and £50m only acknowledge the next few years deficit.

There are no good choices now, only less bad ones.  It would cut ‘Rangers’ fans to the core to become tenants paying a high rent for the use of Ibrox, but flogging this asset might secure them enough cash to reach top flight football – and there is nothing whatsoever fans can do to blackmail the club into retaining this asset.

Whether they consider Newco to be the same club or not, future ‘Rangers’ branded teams will be nothing like those of the past.  There is a possibility they will have a team to support, but it will not be a Champions League team, and Ibrox might not even be the best place for it, a St Mirren Park-type venue, packed out every week, would at least allow them to pay their bills.

The Sevilla keeper moved.  Three referees watching.  Three referees!  Two on the line, whose only job was to check if he moved!  Last night I considered corruption was at play but there is another possibility.  Calling out the keeper was a huge moment for the assistants, each of whom may have preferred one of the other two referees make the call.  It would have been a huge call for the main referee, too, but he could have deferred to his assistants, who were in prime position.

Without clear responsibility, all three were frozen in silence.

Tommy Gemmell is on CQN tomorrow from 13:00 – 16:00.  Tune in and have a ‘chat’.  You can order his autobiography, All the Best, due out next week, from the link below.

Select Maiing Destination

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  1. Dontbrattbakkinanger on

    Good article Paul, just like ole old stylee CQN. In other words I understood less than 5% of it.

  2. desertbhoy



    12:12 on 15 May, 2014





    11:23 on 15 May, 2014





    Ah, the Death Star!!



    Just waiting to see how ole Louis got on with his appraisal before I make my move.





    Philbhoy… I’m closer to 44, moves that is, and still short of you by a couple of years……



    Wouldn’t saddle my worst enemy with that poison chalice..




  3. GlassTwoThirdsFull on

    Yes, the keeper moved. But the stupid thing is the players taking the penalties were waiting for the keeper to move so they could put the shot the other way!


    The Sevilla players all took excellent penalties.

  4. Don’t care about the huns. The article from that Irish paper again shows just how much great work Celtic do outside of the media glare. Hail hail to the young man and his family. Irish Celts make so many efforts to supportthe club.

  5. Bill Struth:


    We welcome the chase. It is healthy for us. We will never hide from it. Never fear, inevitably we shall have our years of failure, and when they arrive, we must reveal tolerance and sanity.


    “No matter the days of anxiety that come our way, we shall emerge stronger because of the trials to be overcome. That has been the philosophy of the Rangers since the days of the gallant pioneers.”


    Read Bills’ wee story here: http://billmcmurdo.wordpress.com/blog-2/



    No matter the days of anxiety …………………………. you can say that again Bill.


    I love their hurt and pain, payback time for us Bhoys, and I’m loving it.

  6. Richie #TeamOscarForever on

    From previous:



    From the Belfast Telegraph:



    Ten year old Lurgan boy Jay Beatty is a true champion and he has the medal to prove it. The huge Celtic fan, who has Down’s Syndrome, received a very special memento from Celtic’s title winning party at Parkhead last Sunday from Hoops boss Neil Lennon.



    In emotional scenes after Celtic’s 3-1 victory over Dundee United, former Northern Ireland star Lennon spotted Jay and his dad Martin in the 50,000 strong crowd, walked over and handed his medal to the kid from county Armagh.



    It was a wonderful gesture and was quickly followed by Jay’s favourite player Georgios Samaras carrying the youngster around the ground on the team’s post match lap of honour to roars of appreciation from everyone in the stadium.



    Samaras was holding Jay in his arms when conducting a television interview in which he called the young lad ‘a friend and an inspiration’.



    The scenes at ‘Paradise’ have become a YouTube sensation.



    Proud dad Martin explained: “On Sunday we went to the game and sat in the front row of the North Stand.



    “After the match Celtic lifted the Scottish Premiership trophy and did a lap of honour.



    “I had Jay in my arms and suddenly Neil Lennon recognised Jay and waved.



    “He was coming towards us and we thought he was just going to say hello and then his championship medal came off his neck and he gave it to Jay.



    “We couldn’t believe it. It was an incredible gesture.



    “Then Samaras came across and lifted Jay out of my arms and walked him around the ground and said really kind things about Jay in a television interview when he was holding him.



    “Later on Kris Commons handed Jay his football boots. We went to watch a match and all this happened.



    “It was very humbling. Jay was just delighted. This week he was showing his school friends Neil’s medal.”



    The loving relationship between Jay and Celtic has been going on for some time.



    “Jay is 10 and has Down’s Syndrome. He is Celtic daft. For as long as he’s awake he will watch Celtic DVDs or look at Celtic magazines,” says Martin, married to Aine.



    They have another child, 15-year-old Olivia.



    He added: “We can only get over to games though when the Celtic Lurgan No 1 football team, who are in the division two of the mid-Ulster League, aren’t playing because Jay is mascot for them.



    “He gives the team talks and although I’m maybe biased being his dad I think his speeches are very good.



    “It’s amazing watching a boy of 10 in front of 15 men telling them what they need to do.



    “It has really brought his speech on and it’s great to see everyone in the team treat him with such respect.



    “Jay is besotted by Samaras and met him when Cliftonville played Celtic at Solitude in the Champions League last year.



    “The day before the game at Solitude Jay was invited down to watch the team train.



    “Neil Lennon came out and spotted Jay and allowed him to take the training session.



    “I have to say Neil Lennon, Samaras and indeed all the team have been amazing to our son.



    “We got a call one day to say that Neil was back home at his mum and dad’s house in Lurgan and that he wanted to meet Jay, so we took him there which was incredible.



    “He’s also been on the team coach singing Celtic songs which have been captured on YouTube.



    “He’s become a bit of an internet star and the number of people that recognise him is crazy. He doesn’t look at himself on the internet though… he’d prefer to watch Celtic v Ross County from five years ago!



    “There is a big rivalry between Rangers and Celtic but lots of Rangers fans have told us it is wonderful to see Jay doing all this, which I think is fantastic.



    “When Jay was born we didn’t know how he was going to be treated, but the people of Lurgan from both sides have been wonderful.



    “My wife runs a cross community charity called Downs and Proud for people in the Lurgan. Portadown and Craigavon areas and there is a great spirit around the place,” added Martin.

  7. time for change on

    Big day second child leaves school after her last exam………..just the wait for results to see if conditional offer is met.



    Great article Paul…………not something that will be printed in mainstream till it’s too late then they’ll say “we broke the news”….hard to feel any sympathy for them in any way.




  8. Dontbrattbakkinanger on

    ‘we must reveal tolerance and sanity’



    -no chance of the ole cognitive dissonance makin’ an appearance with that statement…

  9. Steinreignedsupreme on

    Paul 67 –



    This is obviously a victory for the Flat Earth Society over the Flatter Earth Society.

  10. benjybhoy mul, nail on the head.



    Dontbrattbakkinanger, when I read this season’s ruse emerge last night I thought it was worth a little effort.



    GlassTwoThirdsFull, yup.



    time for change, thanks.



    Steinreignedsupreme, indeed.

  11. Great article Paul, my waistline is still recovering from the last Jelly and Ice Cream event so best get working out ready for the next one!

  12. Billy Bhoy 05 on

    richie #teamoscarforever



    11:57 on 15 May, 2014


    From the Belfast Telegraph:



    What a beautiful story. Absolutely brilliant and made my day.


    Thanks for posting that richie

  13. Dontbrattbakkinanger on

    Paul67, yes; and no matter how baffled I am by what is goin’ on I am quietly confident I am more clued up than the likes of Chic Young and his buddies in the MSM.

  14. Phyllis Dietrichson on

    P67 – Legally prohibiting your company from providing a lender with a floating charge also prohibits you from accessing conventional lending – but I thought that’s where they were?



    So no big deal, so long as the security granted to the Spivs is short-term?

  15. Richie #TeamOscarForever @ 12.24hrs.



    I am very glad that you reposted.



    Great story that deserves as big an audience as possible.



    HH, always in Celtic.

  16. Paul67…..



    Any chance of the onion flans’ lawyers advising them of this??



    After all, they are the “peepul” and the “peepul” are revolting!




  17. Billy Bhoy 05 on




    Was there a contradiction in your article regarding the Floating Charge?



    It’s a registered charge yet you said the company could sell it without them knowing or the granting of permission.


    Would you please explain

  18. GlassTwoThirdsFull on

    dontbrattbakkinanger 12:36


    Chick and his MSM buddies will all have gleeful smiles on their faces thinking all is well and King has won.

  19. Richie #TeamOscarForever


    11:57 on


    15 May, 2014


    From the Belfast Telegraph:



    Ten year old Lurgan boy Jay Beatty is a true champion and he has the medal to prove it. The huge Celtic fan, who has Down’s Syndrome, received a very special memento from Celtic’s title winning party at Parkhead last Sunday from Hoops boss Neil Lennon.





    BSR posted video the other day,have watched more than a few times,I just love how the wee fhella is all exited getting Lenny’s medal for all of 10 seconds then spots big Georgios


    “There’s Sammi” and he goes hyper, Greek Ghod picks him up and Jay pats his back and scratches his beard…a lovely moment.




  20. leftclicktic We are all Neil Lennon on





    Ye olde “floating charge” :)))



    Two words that strike fear into the deluded .

  21. My friends in Celtic,



    It is not just Brian McClair that is clever.



    The way some of the podium seekers speed read the article, digest, then post is amazing.



    I’m in awe, and must applaud their teachers. :-)




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