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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.


Select Maiing Destination




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  1. a wee musical worm is forming

     

    Oh the ol floating charge lol

     

     

    Woodencrosscsc

  2. jude2005 is neil lennon \o/

     

     

    13:34 on 15 May, 2014

     

    yorkbhoy

     

     

    66?

     

     

     

    That makes sense…

  3. Yorkbhoy

     

     

    Ian Wright was 4 days off fis 36th birthday when he made his scoring debut against Kilmarnock in a 5-1 win in October 99

  4. jude2005 is Neil Lennon \o/ on

    Is that thems took out another loan? Wish I still worked way the Provie id make a fortune!!

  5. I’m glad Paul67 didn’t forget the Loving Cup. I think Our Hero is entitled to it.

  6. GlassTwoThirdsFull on

    bamboo 13:22

     

    The one at CP (PVH) in November ’96 was an absolute disgrace. Surprised he didn’t catch his finger in Pierre’s bootlace!

  7. jude2005 is Neil Lennon \o/ on

    yorkbhoy

     

     

    Flattered to deceive he did. Was one of many Im afraid!!!

  8. I'm Neil Lennon (tamrabam) on

    am I understanding this right

     

     

    Is the easdale fullah denying that theres not already a big floater over ibrox

     

     

    YE CAN SMELL IT FROM HERE

  9. traditionalist88

     

     

     

     

    12:46 on

     

     

    15 May, 2014

     

     

     

    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…

     

     

    *I watched their youth cup final on you tube during the week and both sides failed to impress, had to laugh though when some zombies were complaining that the diet sevcos were fielding players with first team experience until it was pointed out that was their strategy when they went onto admin unlike them throwing (not their own) money about like a man with no erms.

  10. minx1888 praying to Wee Oscar on

    Celtic have confirmed Danny McGrain suffered a minor heart attack and is due to be released from hospital tomorrow

  11. minx1888……

     

     

    Has it been confirmed that Danny has had a heart attack?

     

     

    Saw some posts this morning but the ghuys seemed to think it was not true.

  12. Get well soon Danny, indeed.

     

     

    I’ll say a wee prayer for your speedy recovery.

  13. Richie #TeamOscarForever on

    By: Newsroom Staff on 15 May, 2014 13:45

     

     

    CELTIC Football Club confirmed today that Club Legend and current first-team coach Danny McGrain has experienced a minor heart attack.

     

     

    Danny is recovering well and is scheduled to be released from hospital tomorrow (Friday). Clearly, the thoughts and best wishes of everyone at the Club are very much with Danny as we wish him a full and speedy recovery.

  14. KevJungle:

     

     

    You’re not the fool so many rush to tell you you are.

     

     

    BillyBhoy whatever:

     

     

    Do you have children? Do you read history? Do you subscribe to… history repeats itself?

  15. From official site. Note it says MINOR heart attack.

     

     

    Club’s best wishes to Danny McGrain

     

    By: Newsroom Staff on 15 May, 2014 13:45

     

     

    CELTIC Football Club confirmed today that Club Legend and current first-team coach Danny McGrain has experienced a minor heart attack.

     

    Danny is recovering well and is scheduled to be released from hospital tomorrow (Friday). Clearly, the thoughts and best wishes of everyone at the Club are very much with Danny as we wish him a full and speedy recovery.

  16. Richie #TeamOscarForever on

    My Da had a minor heart attack in his early fifties and lived on for another 30 years!

  17. 50 shades of green supports wee oscar and his family.h.h.wee mhan on

    Take it easy Danny and get well soon .

  18. traditionalist88 on

    Tontine Tim

     

    13:48 on

     

    15 May, 2014

     

    traditionalist88

     

     

    12:46 on

     

     

    15 May, 2014

     

     

    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…

     

     

    *I watched their youth cup final on you tube during the week and both sides failed to impress, had to laugh though when some zombies were complaining that the diet sevcos were fielding players with first team experience until it was pointed out that was their strategy when they went onto admin unlike them throwing (not their own) money about like a man with no erms.

     

    ======================================

     

     

    Saw bits of that game during the week, Hearts looked to dominate but didn’t see the full thing so can’t really comment! As a club they should be stable by the time the season starts and should be favs for the title…

     

     

    Get well soon Danny

     

     

    HH

  19. Geordie Munro on

    Now that it has been confirmed officially….

     

     

    Speedy recovery Danny bhoy.

  20. Dontbrattbakkinanger on

    Richie- there is a good article in this week’s BMJ on the US lethal injection fiasco[ one of the topics we discussed in the Prince of Wales].

     

     

    ‘At least two US states [Georgia and Arizona] purchased unapproved thiopental from Dream Pharma,a UK distributor that operates from the back of a London driving school’

     

     

    -thiopental is a barbiturate and the key drug in the old [pre-ban] U.S three drug protocol

     

     

    DBBIA/GreenMileCSC

  21. More from the official site. http://www.celticfc.net/news/1076

     

    Bobby Murdoch.

     

    Universally admired and loved

     

     

    Bobby Murdoch: When he played, Celtic played

     

    By: Paul Cuddihy on 15 May, 2014 07:30

     

     

    BOBBY MURDOCH was always, first and foremost, a Celtic supporter. He also just happened to be one of the finest players ever to have worn the green and white Hoops.

     

     

    He had been part of the most successful Celtic squad in the history of the club but more than that, he had been a vital member of the team which brought so much silverware to Celtic Park.

     

     

    Between 1959 and 1973, Murdoch made 481 appearances for the club, scoring 102 goals in the process.

     

     

    He won eight league championship medals, four Scottish Cups, five League Cups and, of course, a European Cup winner’s medal.

     

     

    Born in Bothwell on August 17, 1944, Murdoch joined Celtic in 1959 straight from Our Lady´s High School, Motherwell. He was farmed out to Cambuslang Rangers to gain experience, and made his debut in 1962 in a 3-1 League Cup victory over Hearts at Celtic Park, scoring after just seven minutes.

     

     

    It was the Hoops´ first competitive fixture of the season and the 17-year-old Murdoch was chosen when it was discovered that John Divers had forgotten his boots.

     

     

    And it was to be in the League Cup that he made his final appearance for the Hoops – on August 29, 1972, in another 3-1 victory, this time away to Arbroath. This time, however, he was not to be on the scoresheet.

     

     

    In between then, he helped Celtic to eight of their nine titles in a row, and was part of the team which beat Inter Milan on May 25, 1967. Indeed, it was a Murdoch shot which was knocked in for the winning goal by Stevie Chalmers.

     

     

    Originally played as an inside-right, the arrival of Jock Stein in 1965 saw Murdoch move back to right-half, the decision by the Celtic manager helping to create one of the finest midfielders in the world. The switch had an immediate benefit, and Murdoch helped Celtic win the Scottish Cup in ´65 with a 3-2 victory over Dunfermline.

     

     

    Inter Milan´s coach at the time of the European Cup final, Hellenio Herrrera, described Murdoch as “my complete footballer” after having watched the Celtic midfielder orchestrate the defeat of the defensive-minded Italian side.

     

     

    In 1969, that extraordinary ability was recognised when he was given the Scottish Football Writers´ Player of the Year Award.

     

     

    Like many of his Celtic contemporaries, Murdoch never received the number of Scotland caps commensurate with his ability. He represented Scotland a total of 12 times.

     

     

    Murdoch left Celtic for Middlesbrough where he quickly established a reputation as one of the best players that club ever had.

     

     

    Indeed, the man who signed him, Jackie Charlton said: “Bobby Murdoch was the first player I ever signed and he was also my favourite. I played against him for Leeds when he scored to send us out of the Eutropean Cup… but I forgave him for that! Yes, he was a smashing lad and there´s no doubt that he went on to become a major part of my team at Middlesbrough.

     

     

    “Bobby was an amazing passer of a ball who could drop a ball on a sixpence from any distance and, although I´ve had players who covered more ground, I never worked with anyone who could strike the ball as well as he could.”

     

     

    And Graeme Souness, a team-mate at Middlesbrough as a young player, said: “He came along at just the right time, not only for me but for the whole team. His experience settled us down as we went for promotion and he also proved to be a big influence on my career.

     

     

    “Bobby was an excellent passer of the ball and he had an excellent attitude. He would always pull me to one side to pass on advice or to tell me when he thought I was acting wrongly.”

     

     

    Murdoch finished his playing career with Middlesbrough in 1976, then becoming coach at the club for five years before a brief spell as manager.

     

     

    On May 15, 2001, Bobby Murdoch died. He was aged 56. And the thoughts and prayers of the Celtic family remain with his wife, Kathleen, and all his family and friends.

     

     

    Bobby will always be remembered as a great Celt whose love for the club remained undiminished throughout the years. And Jock Stein himself said of Murdoch: “As far as I´m concerned, Bobby Murdoch was just about the best player I had as manager.”

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