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Look the other way: fixed and floating charges

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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.


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  1. Morning all

     

     

    Tommy Gemmell on blog today I believe?

     

     

    In this second-part exclusive from his hard-hitting new autobiography, the Celtic legend tells of the heartache he felt after being lied to and missing out on his dream move to Spain.

     

     

     

    JOCK Stein lied to me almost every day for over two years and ditched me from the Celtic team two hours before a cup final.

     

     

    He dropped me into the reserves without warning and thought nothing of berating me in front of my colleagues.

     

     

    He booted me out of the club I adored and deprived me of the chance to say a last farewell to the fans I rate the best in the world.

     

     

    I loved that man – even though he cost me a move to Barcelona.

     

     

    Vic Buckingham was appointed manager of the Catalan giants in 1970 and was interested in yours truly after I had asked Big Jock for a transfer in October 1969.

     

     

    I was raging when I was dropped from the team to face St Johnstone in the League Cup Final that year.

     

     

    All this time later and I still don’t know why he acted the way he did, although perhaps Scotland’s 3-2 defeat to West Germany in a World Cup tie in Hamburg three days before the final was a factor.

     

     

    They were leading 3-2 and with a minute to go I got into a great position just outside the box, Sepp Maier’s goal in my sights.

     

     

    I pulled back my right boot but Helmut Haller clipped my heels from behind and the Austrian ref didn’t even award a foul.

     

     

    I’m not proud of what I did next. I booted the smirking Haller up the backside and the ref didn’t miss that. Off I went, seeing red in more ways than one, and 60 seconds later the final whistle blew.

     

     

    Big Jock was with the official SFA party on the flight home and didn’t say a word to me – and the silence continued when we went to Troon for our cup final preparations.

     

     

    I had no inkling I wouldn’t be playing. There wasn’t the merest suggestion that I would be left out, even as we arrived at Hampden. I was going through the dressing room door when I was handed two complimentary tickets.

     

     

    I looked over at the No.3 peg and Davie Hay was preparing to start at left back. Big Jock hadn’t even hinted I would be dumped. I was well and truly humiliated.

     

     

    The following day I got into my car and raced through to Celtic Park to meet him in his office and ask why I had been dropped.

     

     

    He said he didn’t have to give a reason, so I demanded to be put on the transfer list and it was after that my manager took to telling me porkies on a regular basis.

     

     

    Secretly, I’d been told Barcelona wanted me. Buckingham had been put in charge of them and told to restore them to their former glories. He wanted to build an attractive, attacking unit and wanted me to be part of the revolution.

     

     

    A reporter got in touch to see if I would be interested. I told him I would and waited for the next instalment. I was then told Barcelona had contacted Celtic about the possibility of a deal.

     

     

    I’d been tapped by the Catalan club. They had made an illegal approach through a third party and I would have been in serious trouble if Big Jock had ever discovered the truth.

     

     

    So, I had to act dumb. I would knock on his door every couple of days, look in and ask, ‘Anyone interested in me, boss?’ He rarely even looked in my direction as he waved his big paw and said: ‘Naw, I’ll keep you informed.’

     

     

    At the same time, I was being told by the press man that Buckingham had asked for a price. It was frustrating. Eventually, he couldn’t wait any longer and looked elsewhere for a new left-back.

     

     

    I was then told Leicester City and Spurs, both in the top flight, were interested. I would ask: ‘Any bids, boss?’ and he would again reply: ‘Naw, I’ll keep you informed.’

     

     

    I was on that bloody transfer list for just over two years and, according to my manager, no one was interested. I was a European Cup-winner, a regular international and, according to some, even Big Jock, the best left-back in the world. But still I wasn’t of any interest to any other club on the planet.

     

     

    Celtic had a midweek match at Aberdeen right after the 1969 League Cup Final. I wasn’t even on the bench as we won 3-2.

     

     

    But we had a home European Cup tie against Benfica looming and Jock knew I was a big-game player, which gave him a problem.

     

     

    He couldn’t just pitch me in against the Portuguese champions, depending on me to come up with all the answers in a crucial match. That wouldn’t look too clever.

     

     

    I got the nod to play in a league match against Hearts on the Saturday before the European tie which denied headline writers the chance to scream: ‘Gemmell Back Against Benfica”.

     

     

    Jock was a great psychologist. I played against Benfica and scored in the second minute. I ran to the Jungle to take the applause and then sneaked a wee look over at him in the dugout.

     

     

    I am sure I detected a smile on his lips. He probably expected me to come up with such an answer. Points even, I think.

     

     

    I finally did get my move from Celtic when I left for Nottingham Forest some two years after that Benfica game.

     

     

    Unfortunately my last game for the club was far from Parkhead – and the fans – in a low-key

     

     

    European Cup tie in Malta against Sliema Wanderers, a game we won 2-1 for a 7-1 aggregate victory.

  2. justafan –

     

     

    No apology necessary.

     

     

    Thanks for taking the time to respond as you did. You have certainly put me right on a couple of things.

     

     

    My heart just sank when I saw the Record headline and read the article and the quotes from big Tam.

     

     

    Hail Hail

  3. Gold Coast Tom

     

     

    05:57 on 16 May, 2014

     

     

    petec –

     

     

    The Secret History is one of my favourite books.

     

     

    Donna Tartt’s first novel.

     

     

    Superb stuff.

     

    ~~~~~~~~~~~~

     

     

    olde Bobby wanted to make the Moonhowling thing a big thing, fair palya to him. It just isnae my thing. I sweat and get anxious in big groups, 2 or 3 people, I’m likable, much mair than that, I just crumble, unless Im de Runk. I love the hootenanny and all the participants.

  4. FFM – I’m the only conspiracy theorist in the village)

     

     

    06:23 on 16 May, 2014

     

     

    GCT,

     

     

    Look forward to it Big Man. All my best.

     

     

    Wee song for all, from a fine Christian band, from an agnostic hater of devilism, which is how I now define myself :))

     

     

    If you listen, you won’t be disappointed.

     

     

    http://www.youtube.com/watch?v=lPOM0IUsd_0

     

    ______________________________________

     

     

    If it takes GCT coming home to finally go bach oot for a beer with you? The Clutha was just coincidences, unfortunately.

  5. There is no Devil.

     

     

    There is only bad people.

     

     

    We exonerate bad people by blaming their bad deeds on a fictitious entity.

     

     

    PS. This is not an attack on any person or ideology. It is merely my own opinion, for what it is worth.

  6. GTC

     

     

    Ah!

     

     

    Yes, well…but why are there bad people?

     

     

    PS. This is not an attack on existentialism.

     

    ;-)

  7. Gold Coast Tom

     

     

    06:39 on 16 May, 2014

     

     

    petec –

     

     

    You and FFM weren’t in the Clutha on that dreadful night were you?

     

    ——

     

     

    Last Time I was drinking in Glesga, I was in the Clutha with FFM, a wee outer place outwith the bar.

     

     

    I know nothing about Glasgow pubs, FFM knows where to go.

     

     

    FFM is a wonderful person Tom, you will realise this when you meet him.

  8. Gold Coast Tom

     

     

    06:45 on 16 May, 2014

     

     

    There is no Devil.

     

     

    There is only bad people.

     

     

    We exonerate bad people by blaming their bad deeds on a fictitious entity.

     

     

    PS. This is not an attack on any person or ideology. It is merely my own opinion, for what it is worth.

     

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

     

     

    You are entitled to hold such ludicrous views. :P

  9. Morning Celts and happy Friday muchachos!

     

     

    In work early for an early finish, makes sense to me :>)

     

     

    Good article by JF on Fields of Green which I read earlier this morning, will post the link in a few minutes.

     

    HH

  10. Frank Ryan's Whiskey on

    Bhoylo83

     

    22:30 on

     

    15 May, 2014

     

    Anyone else really really worried about the CL qualifiers?

     

    ==

     

    Perpetually.

  11. Petec

     

     

    Your links and related postings are not everyone’s cup of tea, so don’t be surprised at receiving some negativity.

     

     

    Keep on though it’s kinda interesting if a bit …… Out there pour le moi!

     

     

    KTF Petec!

     

     

    V

  12. Good morning friends and a Big Happy Friday from a dry and mild but entirely cloudy East Kilbride.

  13. Hamiltontim is praying for Oscar on

    DBBIA

     

     

    I got a dead leg at football last night and I’m having real difficulty moving, never mind walking. Do you have any suggestions Sir?

  14. TBJ says Wee Oscar Knox is in heaven with the angels on

    Big jock and tommy g are absolute Celtic legends

     

     

    But reading tgs story there … Big jock did his job and TG broke the rules more than once

     

     

    Funny how the same folk will say the board are driving players out but condemn jock for doing the opposite

  15. hamiltontim is praying for oscar

     

     

    07:39 on 16 May, 2014

     

    DBBIA

     

     

    I got a dead leg at football last night and I’m having real difficulty moving, never mind walking. Do you have any suggestions Sir?

     

    ……….

     

     

    The saw!

  16. TBJ says Wee Oscar Knox is in heaven with the angels on

    HT

     

     

    Cut it off right away .. A few minutes pain but after that you won’t ever feel any pain in that leg again ;)

     

     

    Only problem is It might reduce your chances of ever playing for Celtic

  17. Thunder Road on

    Sorry to read about Danny.

     

     

    Get well soon.

     

     

    Winning Captains………Have a blether with the man eh?! ;)

  18. Union of fanny’s have fallen out with the board again.

     

     

    Pre-season game in Bournmouth – cancelled

     

     

    Tick Tock

  19. Hamiltontim is praying for Oscar on

    Desertbhoy

     

     

    Just a tad extreme I’ll try painkillers first :-)

     

     

    TBJ

     

     

    No chance, that opportunity is still awaiting me!!!

  20. See that Charlie Stape on BBC news, he is always wearing a green tie :-) any reason ?

     

     

    HT, did your team win last night ?

     

    Or are you still on a roll, and not helping the pain :-)

     

    CRC said to ask

     

     

    Hail Hail

  21. HT, should have added,

     

    Stop a tesco on way to work, their own brand deep heat will help :-)

  22. blantyretim is praying for the Knox family on

    GCT

     

     

    I had a similar talk with paolosboots re their thoughts being misconstrued as sour grapes, remember in those days players had very little power and the club held all the acesm, tbh I think players have too much power now but haď clubs been honest with them Bosman etc may not have been needed.

     

     

    Facts are facts though…..

  23. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on

    Danny getting home after his minor heart attack is FANTASTIC news ….!!!!

  24. hamiltontim is praying for oscar

     

     

    07:59 on 16 May, 2014

     

    Desertbhoy

     

     

    Just a tad extreme I’ll try painkillers first :-)

     

     

    TBJ

     

     

    No chance, that opportunity is still awaiting me!!!

     

    …….

     

     

    Waste of money; cut your losses.

  25. blantyretim is praying for the Knox family on

    Painkillers, someone mention painkillers, 8-)

  26. What areas are we trying to strengthen this window, given that there are no “important” departures?

     

     

    Still looking for a striker, Cb and lb cover??

     

     

    Just wondering, like.