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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. Bom dia, unlucky Benfica and Hail Hail!

     

     

    I’ll do what the kids do: Silver Apples>Indy debating

     

     

    I’d wager that anyone who doesn’t rate basketball has never played basketball and doesn’t understand what fine athletes these players are. Ok it’s a high scoring sport. Ok it’s stats-crazy. Ok the money is obscene. But to play 80-odd games with small squads, against 6′ plus, 0.8% body fat, mobile, strong athletes travelling the length and breadth of a 3,000 mile-long country, sometimes 2 games in 2 days; it’s a great sport. I love it. Give it a chance!

     

     

    Basketball also gave birth to the greatest sports commentator of all time: the late, great Chick Hearn.

     

     

    Best wishes and good thoughts going to Daniel Fergus McGrain – a true fighter who will pull through this. Hail Hail Danny!

  2. Rocket man

     

    I hate basket ball. And not just because I’m vertically challenged.

     

    I have an ideal solution to make basketball more acceptable and less boring.

     

    I’d give each player 5 free throws and then play the last two minutes.

  3. embramike

     

     

    Thanks for the updates re the U17 game against the Swiss. On top of beating Germany 1-0 at the start of the week that is impressive. Let’s hope we can make the final now.

  4. valentinesday on

    Get well soon Danny,you sir are the only Celtic

     

    player I’ve seen who would have made it into

     

    a world 11 in the era in which you played.

  5. rocket man

     

    You are correct.

     

    Can I say I dislike it with a passion?

     

    In the same category is NHL.

     

    I do like baseball and the. NFL though, so I’m well balanced in my US sports preferences.

  6. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on

    Anyone know the Scotland U17 team tonight, and how many were Celtic players ?

  7. jude2005 is Neil Lennon \o/ on

    Dunky Mc Kay was a classy solid f b. Went to Aussie to finish his career

  8. 67 Heaven,

     

     

     

     

    embramike remembering wee oscar

     

     

    18:19 on 15 May, 2014

     

    7 Celtic players in the 16 man Scotland U17 squad

  9. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on

    ‘gg

     

     

    19:09 on 15 May, 2014

     

     

    Or fekin detest

  10. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on

    sipsini

     

     

    19:31 on 15 May, 2014

     

     

    Thanks, me Bhoy

  11. twentyfirstofmaynineteenseventynine on

    sheik, sorry mate , was out for a few hours and didnt catch any earlier posts. I should have noted the irony though.

  12. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on

    sheik yerbouti

     

     

    19:24 on 15 May, 2014

     

     

    They started a fortnight ago….hahahahahahaha

  13. eddieinkirkmichael on

    I heard from a reliable source that it’s an open secret that Neil is for the off.

  14. Baseball

     

     

    I knew the manager of the Sportsmans Emporium years ago. He told me they sold about 200 baseball bats a year and 2 or 3 baseballs.

  15. paddybhoy1888 on

    At last! after a seven week injury lay off Paddybhoy made a comeback at the CQN 5s tonight. Never mind the fact that I was gash more important I lasted the pace. Really missed not playing so thanks guys for having me back.

     

     

    Thanks to Cowiebhoy and Lennybhoy yesterday for their kind testimonies re getting their cars fixed up at my garages. Happy to help out any of the guys and gals on this blog. Check out the advert on the CQN mag and get in touch with me personally and I will make sure you get the best deal and service bar none. You can add Kicknthenakas and Johan Murdoch as previous customers too so don’t be shy.

     

     

    Hail hail and God bless everyone on this fine site

     

    PB1888

  16. embramike remembering wee Oscar

     

     

     

     

    17:53 on

     

     

    15 May, 2014

     

     

     

    Probably take in a Cubs baseball game again – 4 hours of beer bought at your seat, hot dogs etc., Drawback unfortunately watching the Hibs of MLB. As they say over there ” Everybody’s entitled to a bad century” !

     

     

    *awe naw no the dreaded Cubs who play in the north side and are the zombies of Chicago. Get yersell down to the South side, the home of the biggest St Patrick’s Day parade outside of Dublin and watch the White Sox.

  17. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on

    eddieinkirkmichael

     

     

    19:39 on 15 May, 2014

     

     

    Doooohhhh ….!!!!!!!!

  18. EddieinKirkmicheal

     

     

    19.39

     

     

    I hope it’s not true that Neil could be going, but it does seem to be gathering a bit of momentum, I guess it’s a matter of time, because just like players, managers will want to test themselves in the biggest leagues, tho the Champions League is always the lurefor Neil staying, also he loves the club, that’s never been in doubt.

     

     

    Peace be with you

  19. embramike remembering wee Oscar

     

     

     

     

    18:19 on

     

     

    15 May, 2014

     

     

     

     

    7 Celtic players in the 16 man Scotland U17 squad

     

     

    *and one of them Steven Boyd has surprisingly been released, only other surprise for me was Lewis Kidd who was highly rated.

     

     

    Dunky McKay and Jim Kennedy were the finest full backs in Scotland at the time and yet shearer and caldow were capped for the national side. At the 9-3 game big Frank was crucified between 2 thieves.

  20. Ann Budge making her presence felt already.

     

     

    Scottish Schools Cup Final at Tynecastle tomorrow night. £7 adults and £5 for under 18s to get in …… Ouch. 5 30 kick off so not even got floodlights to pay !

  21. embramike remembering wee Oscar on

    67 Heaven

     

     

    5 Celtic players started for Scotland U17 today – other 2 on the bench

  22. Good evening Gentlemen of CQN

     

     

    Looking for a bit of advice regarding football trips, organising a trip for me and my mates in August, hoping to catch an Everton, or Man City game, was hoping someone could recommend a good company that organises this kind of trip, and if it was worth it.

     

     

    Any info appreciated

     

     

    Peace be with you all

  23. jude2005 is Neil Lennon \o/ on

    west of Ireland

     

     

    With you 100% on the living wage disgrace.

  24. eddieinkirkmichael on

    McClairNo1

     

     

    19:52 on

     

     

    I also hope it’s not true mate but the source does have inside info on what is going on at CP.

  25. Re Neil for the off….. The SMSM will no doubt be saying thank F*** for that – as will the Huns – but will have the cheek to then tell you how good Neil was for an honest interview, etc,etc.

     

    The other Scittish managers will also no doubt also say thank heavens….we can stop rigging the MOTY votes. They will also have list a magnificent competitor.

     

     

    The most important part though belongs among us. Neil has given Celtic more than anyone could reasonably ask and taken a disgraceful amount of stick along the way that shames our nation…. Edinburgh juries, anyone?

     

    Ultimately he, like all managers, has a shelf-life. It may be Neil believes he has come to that stage in the same way as WGS before him did.

     

     

    Should he choose to go he will always be a Celtic hero – big Sammi likewise to a lesser extent, perhaps, but a treasure nurtured by Lenny.

     

    Treasure these guys, folks; they are few and far between. Our joy is that when anyone asks them who is their club the answer will be right off the bat : Celtic.

     

    How we are blessed!

  26. Celticrollercoaster luvs his luminious lime boots on

    paddybhoy1888

     

     

    19:48 on 15 May, 2014

     

     

    Cut to the chase, did you Bhoys win? :-)

     

     

    Hope I get back in next week?

     

     

    HH

     

     

    CRC

  27. jude2005 is Neil Lennon \o/ on

    T T

     

     

    Shearer and Caldow hung big Frank out to dry that day!!

  28. eddieinkirkmichael

     

     

    If it is true going to be some upheaval in the close season.

     

    Hope it’s not true especially with qualifiers so early.

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