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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. Coolmore Mafia on

    Beautiful video of Sammi with the kid. He has never given us one minute of grief. This is what CFC should be about – a force for good in the world. If we are different from all the other clubs, let us demonstrate it with actions, not marketing slogans.

  2. Geordie Munro on

    Desertbhoy,

     

     

    Those who can’t do, watch ;)

     

     

    Kojo,

     

     

    Agreed.

     

     

    Td67,

     

     

    Good to see you back posting on cqn……..I think ;)

  3. ..rebound netted, an time to retire. Good malt calling me at the start of the weekend.

  4. DesertBhoy

     

     

    Red Sox, ur a Great Team..n.. Boston.. especially.. the Southie.. is a Great Place.

     

     

    Baith , mak a Wise Choice.. fur a Celtic Fan.

     

     

    Kojo

     

    Still Laughin’

  5. Paul

     

     

    When I read articles about them just like yours today..it always strikes me that there really has to be a name for the malaise that allows otherwise functioning people to be in such a state of constant denial about their former/current club.

     

     

    None of your stuff is (pardon me) rocket science. It is all standard accounting/borrowing procedures and thus is not part of the proverbial conspiracy by various anti Newco elements.

     

     

    It is the media who take the cake though. In a week where we have seen several outlets actually print that the old club was liquidated (welcome to them from the rest of the world BTW) they currently report blandly the PR guff with little or no analysis or critical thinking.

     

     

    Why did Wallace need 120 days?

     

     

    He didn’t, he just punted on 4th and long. Now he is on 4th and even longer on his own 1 yard line, with the clock showing 2 seconds with no time outs left.

     

     

    BTW I visited a local Goodwill store in Sarasota yesterday so I was kind of Goodwill Hunting….(sorry)

     

     

    …and I bought a dvd ( I know I still buy cds too) called…

     

     

    The Invention of Lying.

     

     

    I will watch it later and keep superimposing Wallace’s/Whyte’s/Green’s/McCoist’s/Murray’s face onto Gervais’s and laugh even more.

     

     

    HH

  6. Kojo

     

     

    Yes it would be a tough sell I agree, I did got to two world serious wins, and a super bowel in Jo Robbie Stadium, so lots of Stanley cup games, so my bucket list for me I think not to shabby, been in the Bucks stadium, Dolphins Stadium, Bills Stadium, Lions Stadium, not to bad at all, for a Gorbals guy ;)

  7. In summation, Brand Rangers continue to rearrange deck chairs. There is increasingly little point in bothering with it. There will be other deck furnishing related movements on the SS Ibrox as she continues to sink.

     

     

    They are fecked.

     

     

    End of.

  8. The last time someone tried top Auction of the Assets of a Famous Glasgow entertainment Institution was the ole Burns Howff.

     

     

    Don’t have to tell you how that turned oot:-)

  9. tonydonnelly67

     

     

    Are you sure it wasn’t the super bowel in the Ro Jobbie stadium? :-)

  10. traditionalist88 on

    RWE: ‘otherwise functioning people’

     

    ————————

     

     

    You use the term functioning loosely I assume;) Some of the posts brought to us via FF have told us what they’d like to do to certain people and how the events of the last few years have affected their family life.

     

     

    And that is just the stuff they admit to…

     

     

    HH

  11. TonyDonnelly

     

     

    The Long n the Short o’ It..

     

    is.

     

     

    Maist Sporting Pursuits ur Satisfying.

     

    Ah hiv found.

     

     

    The watchword is: “Don’t Knoack it… Till Ye Try It!”

     

     

    Unfamiliarity, is the Thief o’ Common Sense.

     

     

    Nice chatting ,Pal..

     

     

    Ye wur Missed.

     

     

    Kojo

     

    Still,Laughin’

  12. Rumour has it that a senior policeman, a Councillor and a clergyman were seen deep in conversation on Greenock’s Esplanade close to the Easdale residence. Could they have been discussing urban planning permission, police procedure in situations of repossession or last rites.? In the light of Paul’s latest article all three may be possible in the not too distant future.

  13. Re Islam Feruz.

     

     

    I watched the u20 English FA Cup final between Man U and Chelsea last night.

     

     

    Chelsea won the cup overcoming the Manchester sides home advantage at Old Trafford.

     

     

    Both sides were littered with players from every continent.

     

    The standard was exceptionally high ,the match itself great viewing.

     

    So much so that I never bothered to switch over and watch the Europa LCF.

     

     

    My main motivation in watching the match was to watch Feruz, and to see how he is developing.

     

     

    He was the smallest player on the park.A wee stocky bull of a CF.

     

    His movement was good.

     

     

    That is about as positive as I can be about his performance last night.

     

     

    He was IMHO the poorest player on the park.

     

    How he remained on the pitch for 90mins mystified me.

     

    He lacked pace,he lacked composure ,in fact headless chicken came to mind.

     

     

    He looked like he would do ok against smaller and slower players.

     

     

    The pace of the match was fast and the standard top drawer, he was too often a day late and a dollar short.

     

     

    I know it is only one fixture ,and I know that it was at the very highest level of English football for that age group,but I don’t think the boy will make it.

     

     

    Chelsea were the superior of two top quality sides.

     

    Both teams had some really talented ,mature players in their line ups.

     

    Comfortable in possession and able to give and receive the ball at pace.

     

     

    The player that really caught my eye was a right wide midfielder for Man U called Sanko.

     

     

    Man U signed him in the close season from Basle.

     

     

    But I must say almost all of them were very good.

     

    They were physically developed like men also.

     

     

    As for Islam .

     

    Time will tell ,but a lower league career will be most likely for him IMHO.

     

     

    TT

  14. Paddysmarket on

    Get well soon Danny, arguably the finest full back to grace the hoops,

     

    make a speedy recovery and we will see you back at Celtic Park soon.

     

    God Bless.

  15. Dawn commander 11/2 with bet 365. Very competitive race but I feel that’s a decent price and worth a fiver if you can afford to lose a fiver.

     

     

    Horse is in very good order, bouncing at home. If he takes his home form to the track he’d be an each way banker, but as I am not too keen on each way betting where the price is less than 10/1, ( unless I’m backing a new double) I’ll take my chances on the win.

     

     

    Wouldn’t put anyone off who fancied a wee flutter on her.

     

     

    No need for any thanks if he wins, but similarly, don’t shoot the messenger if he flops.

     

     

    Good luck if anyone wants to have a wee go.

  16. Daniel Fergus McGrain

     

     

    Get well soon.

     

     

    A truly world class player and a proper Celtic legend.

     

     

    TT

  17. Jings..! Crivvens..! Aidez-Moi,Livia..!

     

     

    There Was A Time When No Long And Rambling Screed From James Forrest..

     

     

    Was Complete Without A Tendentious Reference To ‘Roman History’…

     

     

    Wha’Pen,Citizen…!

     

     

    Did Soapbox-Dick Byrne Take The Copy Of Livy’s “Lives Of The Great Romans’..

     

     

    Back Tae Govan Public Library….

     

     

    And Settle The Fine..?

     

     

     

    Up The Hoops….!

     

     

    Speedy Recovery To Danny McGrain…

  18. Tiny TIm

     

     

    Thanks fur that,pal.. oan Supplyin’ the Latest Skivvy oan.. Young Feruz.

     

     

    Very ..Interesting…

     

     

    Feruz, when Ah saw him ,with Celtic, Impressed me ..aloater.

     

     

    Ah thought he was a Real Prospect..

     

     

    Pity….according, tae your report..

     

     

    That

     

     

    The Kid .. Is not Following Thru oan his Early Promise.

     

     

    Surprised.

     

     

    Nice Chattin’ wi ye.

     

     

    Kojo

     

    Still Laughin’

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

    TONY DONNELLY

     

     

    Good to see you back,ya carnaptious git!

     

     

    Hope the chest,etc,is showing signs of improvement.

  20. Traditionalist88

     

     

    I know, I know…I was thinking more of their sensible Newco fringe at the time.

     

     

    Oxymoron CSC

  21. South Of Tunis on

    Steinreignedsupreme @ 13 10 .

     

     

    The Amazing Snakeheads ..

     

     

    The Lp has been the subject of OK reviews in 2 Italian broadsheets .The reviewers liked the noise but both opined that they couldnt shake the feeling that they had heard it before and better. The guy in La Repubblica said it encouraged him to dig out his -The Monks -Black Monk Time LP . An LP that doesnt need digging out , way down south . It gets regular airtime..

     

    For what it is worth, both gave the currently riding high in the Italian charts , Paolo Nutini a hard time —-” as convincing as a fake ID “.

  22. A Ceiler Gonof Rust on

    I Just heard on the radio about Danny McGrain’s heart ailment and want to add my best wishes along with others pn cqn.

     

     

    Get well soon Danny.

  23. TinyTim

     

     

    Salutary lesson in player potential prediction I think.

     

     

    Islam Feruz was the outstanding player during the Scotland v England schoolboy international a few years back – when he was a year younger than the rest.

     

     

    HH

  24. South Of Tunis

     

    17:18 on

     

    15 May, 2014

     

     

    Black Monk Time, when you consider the time period and the background of the band, is simply one of the most remarkable records out there.

     

     

    The other album that always astounds me it the Silver Apples first LP. Do you know it? Totally different sound to BMT but still totally not of it’s time (other than the vocal sound).

  25. traditionalist88 on

    RWE

     

     

    Yes end game is coming, god knows what they will be like then if their worst case scenario comes to reality.

     

     

    Interesting to read your comments on the media – I have recently started listening to SSB again and they are now in the main quick, when a ‘Rangers’ fan comes on to talk about their signing targets(!), to bring it back to the financial situation, asking the caller where the money will come from and that they are losing money hand over fist as it is!

     

     

    When I last listened to that particular show, probably a couple of years ago, you were cut off for saying the word ‘Sevco’ and any finance debate was not their remit…

     

     

    I think the penny is slowly dropping…

     

     

    HH

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