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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772 Comments

  1. ....PFayr supports WeeOscar on

    Tommy Gemmell is a true CFC great

     

     

    No DR rubbish will have any influence on that

  2. I met one of the millionaires who is behind Bomber Brown’s public utterances last Saturday night in The Dakota Hotel in Edinburgh.

     

     

    I had a quick drink with him and his dinner guest.

     

    His dinner guest was none other than Willie Johnstone.

     

     

    They were both towards the end of their meal and well on with the bevy .

     

     

    The millionaire guy was going on about how it’s not the same. Rangers as he lost £180k in shares when they were liquidated.

     

     

    He stated that they had to smoke out the current board etc.

     

     

    Willie Johnstones one question to me was ” What do you make about Big Yogi’s revelations about Jock Stein.”

     

     

    I never got into it.

     

     

    Jock Stein has been the subject of a despicable campaign to slur his name.

     

    Anyone adding fuel to that fire in any way shape or form has let themselves down .

     

    They are doing it for 40 pieces of silver and are soiling my view of them.

     

     

    They are entitled to sell stories to provide for their loved ones,but they should know that many who once idolised them ,will have a change of opinion.

     

     

    TT

  3. The Battered Bunnet on

    Winning Captains

     

     

    I appreciate the dilemma. The book venture is commercial at heart, not historical. The point is to make some money and the story is the vehicle, not the central purpose.

     

     

    The Daily Record’s money is as good as anyone else’s in that respect.

     

     

    Over two days, we’ve had a Lisbon Lion describe the current Scotland and former Celtic Manager Gordon Strachan being drunk and incapable with the greatest ever Celtic player.

     

     

    And we’ve had Scotland’s greatest ever football man headlined as a liar.

     

     

    But the money’s good, isn’t it. And that’s what it’s all about.

     

     

    Hokey Cokey Publishing.

  4. Pedrocaravanachio & stringer bell pfayr

     

     

    I agree totally with the uncomfortable feeling serialising a cqn book in the rekkkord gives me.this blog was set up in part to correct the lies the meeja here punt as truths.disappointed to say the least.

     

     

    Rwe the longest second lol, and to carry on your analogy I would gladly offer my size12s to punt wherever on request :-))

     

     

    HH

  5. A wee track and it is all about how the Good things are so important.

     

     

    I clicked on a link from acgr last night, scarey at all times, edge of the seat stuff. I ended up watching a 4 minute advert of David Beckham prior to the Zappa track, where David revisited his olde primary school, it was so obvious he was hiding every tattoo he could, it was also obvious he is a good person.

     

     

    The Zappa track frae the mad man, and he is sane compared to moi, something about peeing.

     

     

    Anyways what a nice track this is.

     

     

    Wonderful World

  6. ....PFayr supports WeeOscar on

    TBB

     

     

    Hokey Cokey

     

     

    Hey you that’s sectarian so it is :-))

  7. blantyretim is praying for the Knox family on

    Hi -diddle-de-de

     

     

    Aye he was a clown, hasties rolls where great , u old enough to remeber Mickies.?.

     

    older brother used to ask whowas the priest to come assist at communion, it would cost him a snowball and icecream..

  8. TinyTim

     

     

    11:56 on 16 May, 2014

     

     

    That’s rubbish.

     

     

    Jock Stein was a great figure in Celtic’s history. Posssibly the greatest. Certainly in the top three.

     

     

    Going by the sanitised, hagiographic accounts we’re left with he wasn’t a human being. He had no faults. No darkside. Such a version isn’t credible. It’s childish.

     

     

    I’m an adult. I want to know about the rounded figure of the man. I want a realistic account. A truthful account. I doubt the unvarnished truth will diminish my admiration of the man.

     

     

    Those who knew him knew his faults and it didn’t diminish the respect they had for him.

  9. CQN does a deal with the devil who in turn runs a snippet focussing on throwing more mud at our greatest boss.

     

     

    The war is over and the tabloids have won it seems.

  10. leftclicktic We are all Neil Lennon on

    Tommy Gemmell smiled at me as he got up to leave the Kano foundation night,

     

     

    I melted like a child ,it was only a smile but I will remember that moment till my last day.

     

     

    So today take your chance to speak with a Legend they dont come round very often,

     

     

    In case I dont get a chance later

     

    Tommy it is a simple THANK YOU from me for giving me more memories that will last a lifetime and beyond.

     

    Hail Hail & Y.N.W.A

  11. Ernie Lynch

     

     

    I agree that if we are reading someone’s biography, we want the full story, warts’n’all.

     

    The story about WGS getting blootered with Jinky is old old news, as are the stories about Big Jock using the old contract system to hold onto, and even discipline certain players. None of these “revelations” diminish JS as a football manager or as a man; nor do they lessen my admiration for WGS and Jinky.

     

    We know the DR will put the worst possible slant on any Celtic story.

     

    Tommy Gemmell is a legend for me and if he is making a few bob from the DR, so what?

  12. NatKnow

     

    11:33 on

     

    16 May, 2014

     

     

    Delivering the Catholic Observer was my first “job”. Unpaid of course – it was a vocational post! Got some good tips though from the generous people of Coatbridge. The other benefit was getting to see the lassies from my school answer the door in their nighties! :-)

     

     

    What’sTheStoryCSC

     

     

    _________________________________________________________

     

     

    Strange place to have a door!

     

     

    ChicMurrayCSC

  13. Guys

     

     

    With regards to the nags just got a touch for these:

     

     

    Mezogiorno 7-15 Dundalk,Westpieser 8-15 Dundalk worth a few quid.

     

     

     

    Cheers,

     

    BJM

  14. CQN Saturday Naps Competition : Week 39/10th May results & standings

     

     

    voguepunter (Gabrials Lad @12/1) was the solitary winner this week.

     

    As we enter the final furlong, it’s neck and neck at the top, can PF Ayr hold on ?

     

     

    +£13.60 PF Ayr (11)

     

    +£12.88 Rockon Neil Lennon (9)

     

    +£12.38 BMCUWP (7)

     

    +£11.50 tommytwiststommyturns (4)

     

    +£ 6.50 valentinesday (8)

     

    +£ 1.00 leftclicktic (7)

     

    -£ 1.63 Som mes que un club (6)

     

    -£ 3.50 Bada Bing (5)

     

    -£ 3.75 16 roads (4)

     

    -£ 6.75 green T (7)

     

    -£11.50 Cathal (4)

     

    -£13.00 What is the Stars (3)

     

    -£13.20 unionbearBhind (4)

     

    -£13.80 voguepunter (3)

     

    -£14.75 El Madrigal (4)

     

    -£15.00 BULL67 (4)

     

    -£15.00 fleagle1888 (4)

     

    -£18.20 Sponsored by Cheetah (4)

     

    -£21.75 Kilbowie Kelt (4)

     

    -£25.50 twists n turns (2)

     

    -£29.25 Che (2)

     

    -£31.75 MHARK67 (2)

     

    -£33.94 Burgas Hoops (2)

     

     

    *No selections (wk 39) : Burgas Hoops, Che, El Madrigal, Sponsored by Cheetah, twists n turns, What is the Stars.

     

    *Non-Runners : (wk ) :

     

     

    Cheers, fleagle1888

  15. BOBBY MURDOCH'S CURLED-UP WINKLEPICKERS .........Praying for our WEE HERO! on

    FLEAGLE1888

     

     

    Grateful thanks for all yer efforts,bud.

     

     

    And especially for acceding to my request last week.

     

     

    PF AYR may be in bother as he is abroad. If the moby signal is down,I’m going for a 1-4 shot to pip him,haha!

  16. tommytwiststommyturns on

    Fleagle – many thanks for all your efforts yet again.

     

    I need to get mine in early as I’m going to my mate’s boy’s Holy Communion.

     

    A big chance is taken on Monsieur Chevalier in the 2:40 at Newbury!

     

     

    Good luck all.

     

    TTTT

  17. Thanks for all your efforts Fleagle.

     

     

    Front Page News 1.45 Newmarket.

     

     

    Good luck everyone, and early congratulations to the winner.

  18. Oscar positive thoughts unionbearBhind on

    Dorothy B 14:55 Newmarket

     

     

    thank you fleagle

     

     

    good luck all

     

     

    HH

  19. leftclicktic We are all Neil Lennon on

    FLEAGLE1888

     

    Thank you for all your efforts which are greatly appreciated, so haste ye back :)))

     

     

    Now I am away to pick a nice wee 14/1 winner to put pressure on they dodgy wans ahead of me :))))))

     

     

    14/1 naebothercsc

  20. ....PFayr supports WeeOscar on

    BMCUWP

     

     

    Internet access ….thanks for your help …anyway :-))

  21. Alexandrakollontai (easy for me to type) 8.05 Doncaster 33/1 Looking forward to

     

    lauding over the lot of ye when it stoats :O)

     

     

    Fleags ,cheers mhate ..good luck to all.hh

  22. valentinesday on

    Ambitious Icarus 3:25 Thirsk.

     

     

    fleagle….thanks for all your hard work,it’s been

     

    great fun,well done to the winner,and give yerself

     

    a pat on the back if you’ve finished in profit.

  23. BOBBY MURDOCH'S CURLED-UP WINKLEPICKERS .........Praying for our WEE HERO! on

    SATELLITE 305 NEWBURY

     

     

    Great fun had by one and all,thanks for the craic,lads.

  24. Thanks for the fun over the season fleagle!

     

     

    hail mary shot on Gracchus 3.40 bangor

     

     

    best of luck to all

  25. Kilbowie Kelt will vote YES on

    FLEAGLE1888,

     

     

    Thanks for the efforts that you have made for us over the season.

     

    Much appreciated.

     

    Loved every second despite my laughable selections.

     

    Big WELL DONE to the guys who made it look easy with some fantastic winners.

     

    Take a bow.

     

     

    Final Kilbowie Kurse goes to MOOHAARIB… 1.30 Newbury.

     

     

    Good Luck, Everybody.

  26. Thanks to all but especially fleagle for keeping things going, its been good fun. My Hail Mary play is on on Enderby Spirit in the 8.05 at Donny, be lucky all

  27. ....PFayr supports WeeOscar on

    Fleagle thanks for your efforts

     

     

    I’m prepared to get beat by a nose on the line ….it’s what I do :-)))

     

     

     

    Cheers pal