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. Re the 9-3 game, there is an amusing wee story


    The English were sly and played with an orange ball.


    Callow and Shearer wouldn’t kick it and


    Half fey wouldn’t touch it.

  2. jude2005 is Neil Lennon \o/ on





    Now thats what I call info. Mrs TSOAL got the dooffer??

  3. twentyfirstofmaynineteenseventynine on

    jimmci, have to agree with you there but I thought (and still think) theres a chance he’ll give it another year, get 4 in a Row, enhance his cv further and go before the prospect of the other mob, in whatever shape or form, rear their ugly heads again.Dont think going to a Championship side with the worst goals tally in the english league is a forward move. I genuinely hope he stays

  4. Evening all.



    Living wage:



    I would rather £600,ooo was used to help contribute to a player who could bring joy to hundreds of thousands of Celtic men; rather than it being used.for a gimmick.



    Such a gimmick could affect the benefits of those who would receive it anyway. We aren’t in a dictatorship. Not happy with Celtic’s pay? Leave. Ihhaven’t heard any Celtic employee complaining though.


    Most Celtic supporters aren’t interested in this. It is a CT gimmick. They are about as popular as a St Johnstone season book, which is a shame as they do have some fair points.

  5. EddieinKirkmicheal






    I don’t doubt you mate, Neil’s profile is becoming bigger down south, just a matter of time.









    Your right Neil has had a lot to put up with just for playing forays managing Celtic, he deserves all our good wishes if he does leave Celtic, he is a legend at our club.



    Peace be with you

  6. traditionalist88



    18:47 on 15 May, 2014




    18:18 on


    15 May, 2014





    Not before time with the media…



    Ref SSB I wonder if the old way was just so embarrassing that they had to change the editorial stance on some things Newco…








    Some of their panelists are so naive(Roger Hannah) that you’re almost embarassed for them. Its the Keevins/Delahunts I’ve mainly noticed the change from – one recent show there was call after call about ‘Rangers’ squad for next season and how it could be strengthened – every time they brought it back to the financial question. Was surprised to say the least.








    Not that strange.



    Think they are now following the PR being peddled by Jabba for king/gough and putting pressure on the current Sevco board.



    Talk of no money and newco/oldco by the MSM will lead to increased resentment of the current board incumbents, thus more support for the diddymen, therefore not a great surprise to see a change of tact.

  7. tonydonnelly67



    16:47 on 15 May, 2014






    Yes it would be a tough sell I agree, I did got to two world serious wins,







    Two? For the Blue Jays?



    When, and what was it like?



    I only ask because I follow baseball as my second sport – very time-consuming and tiring (U.S times are a killer) but fills the footy close-season brilliantly.



    Would love to catch a World Series game. Agree that from the outsider’s point of view it may seem ‘boring’ but once you actually understand what’s going on, the importance of the starting pitcher’s, the opposition sluggers, etc it becomes fascinating. I got hooked a few years ago.



    Only other sport I’ve watched live that can carry similar tension to a penalty shoot-out at crucial points in the game.

  8. jude2005 is Neil Lennon \o/ on

    Scotland coaching squad did the Huddle after the final whistle,

  9. weet weet weet(GBWO) on

    During the game last there was a close up of the Benfica support,I said to the Mrs that wee girl is the image of Madeleine McCann,today on her Facebook page there hundred saying the same thing.


    Anybody on here notice it



  10. John O’Neil



    So the Living Wage is a CT gimmick? You really don’t get it, do you?


    If it hadn’t been for the actions of trades unionists fighting for decent wages and conditions in the recent past, YOU wouldn’t have had the education and employment opportunities which you now enjoy. You are pulling up the ladder after you have scaled the heights.


    Take your Daily Mail poison elsewhere please. Your attitude gives me the boak.

  11. Forgive me if this has already been covered, but I remained at a loss to understand what the Union of People’s Assembly Loyal Association etc actually want from the spivs.



    I keep reading they want “security” over Ibrox and Murray Park (including conveyor belt).



    Why? Are they lending them money? I always thought security was attached to a loan? Are they actually just asking for the deeds to the Sevco property assets? And do they expect the coven of hedge funds and Arab fast-food magnates who own the Zombie club just to hand them over..?



    At times like this I just wish John Brown would come out and clear things up…

  12. ger57



    I buy the Daily Mail and The Mail on Sunday………oh……..and The Times….but not The Sunday Times…..I hate broadsheets……..what kind of person am I?

  13. jude2005 is Neil Lennon \o/ on




    Laft at ur “there must be another spider” the other night. Was still chucklin in bed 10 mins later.

  14. the spirit of arthur lee



    20:57 on 15 May, 2014





    Someone who likes Origami







    I like all kinds of sport but sadly I’m getting to old for it now……I was once a white belt in Origami….

  15. St Patricks day 1956 on

    Best wishes to one of the most consistent Celtic players I ever saw.


    Danny McGrain, a great man.


    My prayers are with you for a speedy recovery.



    SPD 1956.

  16. Marrakesh Express on

    Those Union Jack loving Germans Hamburg (city flattened by Union Jack loving bombers in ww2), struggling at home to Gruether Furth in relegation play-off first leg.


    0-0 after 75.

  17. West Wales Celt on

    Jimci, 20:10:


    Great post.


    Agree with every word.


    I was a self-confessed NFL doubter in those difficult weeks and he proved me well and truly wrong.


    He would be a severe loss…

  18. West Wales Celt on




    “west wales celt



    Printers strike?….. When was that then?”



    My point exactly comrade…

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