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. traditionalist88 on

    Knackered but may live on as ‘Rangers’ 2.0…



    Next season will be interesting. You can’t help but feel a meeting will be manufactured ahead of their arrival in the Prem.



    Thought Hearts were certs to win the Championship after their strong end to the season but after releasing some decent players now not so sure…




  2. Great stuff, Paul



    Wonder if they could raise a few bob selling off ibroke so the billy goats could graze? Maybe too, a few fancy aprons might do the trick!




  3. Very sincere words from Mr Robinson. Good on him. Thanks again Ritchie.



    Jim Craig once wrote, in his CV column, about meeting a dying Irish Celtic fan. Unfortunately I have forgotten the precise words which were written but I still am moved by the overall sentiments expressed by both Mr Craig and that Tim.



    Off oot.

  4. leftclicktic We are all Neil Lennon on





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



    Two words LOVE & TRUST


    Till later all, nursery run

  5. traditionalist88,



    Agree, now that Craig Levin is back any remaining forwards may be surplus to requirements.



    HH, always in Celtic

  6. Vogue punter,



    Another thank you, this time to you. Sammi come back!



    Off oot now.

  7. Perhaps this is why Celtic have hidden Lennoxtown up a country lane.




    Yir no kiddin oor Paul67,my last hire 2.00am this morn ,road like a slalom course…time to extend motorway up to ole Bobby Lennoxtown. hh,

  8. traditionalist88 on




    I think the momentum from Hearts end to the season will continue – the fans will turn out and they may be able to strengthen again.



    The big huns are stepping up a level and we’ve seen how they’ve had to cancel Ramsden Cup parties – they should also have to do say some goodbyes as well to the higher earners:)








    Was that you getting Fraser Forster into work for his usual early start?

  10. bournesouprecipe on

    Take a bite out of every sandwich in the communal work fridge. Leave a post-it with a score out of 10 on each.



    @OfficeDares CSC

  11. Can’t get rid off me.



    Last point:



    Paul 67, how about getting one of my childhood heroes on the blog? This handsome chap put some Yugoslavs to the sword despite finding time to also lure some willing wenches to his abode. Yes, Jackie, ahem, Jackanovski. Get him on please.


    Off oot now.




    At the age of 41 years and 113 days, Alec McNair is Celtic’s all time oldest player.


    Who, holds the record as the oldest Celtic debutant?



    Clue: within the last 10 years



    Remember, don’t use Google (et al) as you’re only cheating yourself!



    Answer in 10 minutes

  13. McDowellcelt god bless wee oscar on

    Programme about wee oscar tonight on UTV @ 8.30. For those of you not living in ireland youll prob have to tune in that station to your sky box. HH

  14. Great article Paul67,



    I can’t help but feel that the Sevco Board are choosing their words wisely on the potentially legally binding document.



    i.e they won’t borrow against Ibrox as they can’t because the floating charge is already in place.



    Typical of these charlatans, they’ll tell the gulliblbe hordes anything as long as they keep making a donation.



    The latest piece from McMurdos blog is “on message” alluding to 30k season ticket sales by the end of the week and contrary to the teh DR who are predicting 13k.



    The most accurate part of his article was were he quoted frmo Hatelyes comments that “Celtic are not in the same leage as Rangers”



    Well done Bill, you get something right at last!



    Hail hail and keep at them!

  15. Doh!


    Knew that would happen.



    Lunchtime quiz question last comment on page 1 for those who missed it

  16. Steinreignedsupreme on

    Anyway, I went to see the Amazing Snakeheads last night. They were pretty, erm … amazing actually.



    Gallus Glaswegians.

  17. los_bhoy, better get working.



    Phyllis Dietrichson, no chance or offer of security being granted there.



    desertbhoy, depends on what question is asked and what the appetite is for the whole story.



    Richie, *!*!



    Billy Bhoy 05, if the club sells Ibrox, it has clearly lost Ibrox anyway. This is what the fans are trying to prevent.



    leftclicktic, indeed.



    KINGLuBO, raze it.



    John O’Neil, we’ll see.



    Lawrenzo, too true.

  18. At the age of 36 years and 296 days, Dion Dublin came on a sub in the 1-0 stuffing of our old foes Rangers at the slightly less decrepit Ibrox on 12 Feb 2006.




    Well done GlassTwoThirdsFull

  19. fanadpatriot on

    I see that the rumour mill has Denny Johnstone going to Dundee United.


    Get him on a decent contract Celtic then loan him out to Dundee United.This bhoy is a player.

  20. John O’Neil @ 13.02



    Good call allegedly , does your post insinuate any association to the type of nuts squirrels like.



    Also off oot.






    12:58 on


    15 May, 2014





    Was that you getting Fraser Forster into work for his usual early start?






    A foot an a half shorter and female…





    Never miss a chance to post a Boss vid :O)

  22. Yeah I noticed the Sevilla keeper was doing a “flying pig” impersonation.


    Gorman got away with this in Scotland and saved a few penaltys by rushing from the goal-line and cutting down the target.


    But last night with 3 officials present was ridiculous.


    Benfica should have had the cup won easily with the amount of chances they created. However as was said earlier the curse is obviously still working well.

  23. minx1888 praying to Wee Oscar on

    Bhoys and Ghirls there is a tribute tonight for Wee Oscar at 8.30 on UTV.



    Leona was telling us how fantastic UTV have been to them throughout the wee mans illness. You can get UTV on Sky + HD box by following the instructions below.



    Go to Services > Options > Add channels


    At frequency enter 10906, polarisation V, symbol rate 22, fec 5/6. Press yellow button to find channels.


    Highlight UTV and press yellow button, then select. Then exit menus.


    To view UTV go to Services>Options>Other channels. Press Select to View!

  24. googybhoy ♥ we are all Neil Lennon


    13:20 on


    15 May, 2014


    Vogue punter



    Bet you thought you were on a runner.



    Jobs to Murray Park. Money up front?!?




    Ole Spidey sense kicks in within 20 seconds ,followed by a pleasant ‘ GET OOT!’

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