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



    Not before time with the media…



    Ref SSB I wonder if the old way was just so embarrassing that they had to change the editorial stance on some things Newco…




  2. Big Georges Fan Club - Hail, Hail, Wee Oscar on

    I dont understand the “Stadium that John Brown played for” thing. Is it because thats all thats left of the former Rainjurz, or what?









  3. Robert Tressell 16.48



    It’s not just that they are rearranging the deck chairs, they seem to be rearranging the frigging icebergs as well for fear of missing any.



    Rangers FC. The club that died from an overdose of stupidity and an aversion to reality.

  4. skyisalandfill on




    It originates from Bomber’s drink fueled speech outside Ibrox, where he speculated about the deeds. He said something like


    ‘this stadium, that I played for’.



    He was drunk




  5. embramike remembering wee Oscar on

    Scotland keeper saves very dubious penalty – still 3-1 up inside last 7 mins

  6. Snake Plissken







    I am generally impressed with the consistency of the refereeing in these youth clashes.

  7. embramike remembering wee Oscar on




    As Einstein said …



    “The difference between stupidity and genius is that genius has its limits.”

  8. Bjm and the other interested horsey bhoys



    Always feel a bit guilty about choking the blog with horsey stuff, when most are not interested, so from now, how’s about we jump to the end of the previous thread for horse related stuff?



    If I’ve anything to pass on from now, that’s where I’ll be:-)

  9. embramike remembering wee Oscar on




    Game just finished 3-1- to Scotland. Great second half scoring 3 goals. Will face Holland though who looked very good and have a real Jinky type right winger who could cause problems.



    Amazing performance reaching last 4 of Euro U17s though and good Celtic contingent.

  10. Seen the last few seconds of the Portugal vGermany on eurosport there was the Scotland match not shown?

  11. TnT



    Fair enough – I will catch up with you at the end of the previous thread for nags discussion.


    Makes sense.







  12. TontineTim 17..44



    I think I was at the Green and Whites game but definitely was at the Hearts debut game.



    How lucky were we to see players like Murdoch, Johnstone, Lennox and Hughes develop from youth to full professional manhood .



    I was a big Dunky McKay fan too. Cultured player as I recall.

  13. Play the Dutch on Sunday at 17:15 in the quarters advertised on Eurosport a moment a go.

  14. Phyllis Dietrichson on

    Tony Donnelly – welcome back. As I’m an ex Glasgow Uni bhoy I’ll save you the bother:



    Get It Right Up Me.

  15. traditionalist88 on



    18:18 on


    15 May, 2014





    Not before time with the media…



    Ref SSB I wonder if the old way was just so embarrassing that they had to change the editorial stance on some things Newco…








    Some of their panelists are so naive(Roger Hannah) that you’re almost embarassed for them. Its the Keevins/Delahunts I’ve mainly noticed the change from – one recent show there was call after call about ‘Rangers’ squad for next season and how it could be strengthened – every time they brought it back to the financial question. Was surprised to say the least.




  16. Islam Feruz Looked too small and not enough pace for the top flight of the modern game.




  17. WeefratheTim on

    Good evening all



    Great result from the young Scots. Brilliant.:-))






    Reading back a bit, are you a “beddie by bhoy again”. Hope not. Keep me posted or updated. :-)))



    Weefra HH praying to Wee Oscar.

  18. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on




    12:13 on 15 May, 2014



    I understood about .000005% …… but seems they’re being duped again……when I first heard about this, I thought “BDO might have something to say about THAT” ….hehe

  19. twentyfirstofmaynineteenseventynine on

    Sheik Yerbouti 18.01



    You are just having a laugh, right ?



    Twists and Turns, good luck tomorrow, both good prices, holiday getting booked on Saturday if they both stoat

  20. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on




    18:47 on 15 May, 2014



    Think they’ve been ordered to prepare the sevconian hoards ‘for the worse’

  21. west of ireland csc on

    the living wage


    personally i think it is a disgrace that celtic do not pay all their staff the living wage


    there is no excuse for this level of penny pinching



    as phill mac giolla bhain said in a recent article



    The club was founded as a vehicle for charitable work and even in this globalised world it is good to see this existing within what it is a highly successful commercial operation.



    That said collecting for the homeless while not paying your staff the Living Wage still leaves a bad taste.



    This issue hasn’t gone away you know so get it fixed Celtic.



    i agree, sort it out now celtic


    what would brother walfrid think!!!!!!!!!

  22. Billy Bhoy 05 on

    west of ireland csc



    18:55 on 15 May, 2014


    the living wage


    personally i think it is a disgrace that celtic do not pay all their staff the living wage


    there is no excuse for this level of penny pinching



    I agree with you particularly when the employees are walking in the same door as a load of millionaires. I think I read somewhere the total cost to implement the living wage policy would cost in the region of £600k. Not even a wage for one player.

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