No redundancies as Whyte set for Prepack offer today


We have discussed the Craig Whyte narrative here in some detail since October last year when we first suggested he was preparing to liquidate Rangers and attempt a prepack recovery.  I expect this to be put into motion today.

You can ignore any meetings Duff and Phelps hold with prospective buyers of the club, this is window dressing.  Craig Whyte and his partner company, Ticketus, are the only people in position to make a viable offer for the business.  They hold security on the stadium and Murray Park with Ticketus owning the first 26,000 season tickets (approx.) sold for the next three years.  It would cost approximately £40m to release Ticketus security plus whatever is owned to Whyte.  No one will offer to cover these costs.

Expect Duff and Phelps to conclude their meetings and report that they are in possession of a genuine offer from Whyte/Ticketus, or their proxy, to buy the assets of the company.  The proxy may be required as pretty much everyone who has touched this club in recent years would not be considered a Fit and Proper person and would fail the requirement not to be involved with an insolvency within the last five years.

The offer for all assets will be for a nominal amount and will be conditional on all legal action against Whyte or his companies being dropped.  Duff and Phelps will accept the offer.

Whyte cannot afford to allow large scale redundancies as he needs to be able to sell these players in the summer or play those he is unable to sell.  With the players not agreeing to a short-term cut in pay, he has to make his move now, despite the enormous risks involved in going early.

Duff and Phelps could have made redundancies 24 days ago and ensured the club would be able to finish the season, or at least survive until the tax verdict, but retaining the football squad was an important part of Whyte’s forward plan – and Whyte’s notional offer will have been known to them from the beginning.

HM Revenue and Customs will take a bath for their £75m, Whyte will emerge with all property assets and the football club, although the club will carry the significant burden of selling tickets for Ticketus.

The SPL board will have to vote within the next week on whether or not to allow Rangers Newco to continue with the same league membership as Rangers FC.  Whyte will have to take an enormous chance that his proxy will be presentable enough to allow them to turn a blind eye to the enormously inappropriate behaviour.

The vote could go either way but I expect Celtic will be the only club to object.

The issue is complicated by legacy issues.  Neither the SPL nor the SFA have acted on the improper registration of players matter yet.  If any of the current Rangers team had their current season contracts registered with the alleged improper procedures, games involving those players will have to be awarded a 3-0 defeat to Rangers.

The SPL will have to come up with a verdict on this matter within days or else revisit the matter in a few weeks, after deciding on what to do with Rangers Newco.

The SPL must also consider the issue of precedent, the consequences of enabling a club to disenfranchise a £75m creditor cannot be underestimated.

HMRC may also have an input here.  They stand to lose most from this deal and may seek court intervention, arguing that liquidating the company prior to the FTT verdict is unnecessary and prejudicial to their interests.

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  1. jock steins celtic on 8 March, 2012 at 09:37 said:





    ‘Lehman Bros operated at the very sharp end it didn’t save them. It is possible Ticketus just didn’t foresee the liquidation of Rangers.’



    Lehman brothers had boiling frog syndrome.



    Ticketus don’t.



    Look at the way the Ticketus deal was done.



    The money was handed over to Whyte’s solicitors before he had completed the purchase. Ticketus would have known he was using the money to finance the deal. They knew therefore that as they owned the best part of the ticket sales for the next three years Whyte had no intention of the club continuing. How could it? What cash flow projection was there when the season book sales were already spent? They knew the intention was liquidation.



    Ticketus are part of Whte’s plan.

  2. Brogan Rogan Trevino and Hogan supports Kano 1000 on

    Good Morning,



    I note with interest all the references to the suggestion in today’s Telegraph that a deal with HMRC can be agreed upon,…….. provided big bad Craig Whyte plays no role in Rangers’ future and that there is a regime change!



    This was the “word on the street” last night before the Telegraph went to print, and I understand that it was the line peddled by the Paul Murray Consortium to the Blue Knights in the course of yesterday– Whyte out and a deal can be done!



    However, I am firmly of the view that Paul Murray and his team do not want to do any deal prior to Liquidation. Their aim is exactly the same as Whyte’s and that is to secure Liquidation and thus wipe out all the bills and proceed from there. Yet no one dare say this publicly.



    However, there are at least three major factors anyone has to recognise in such a strategy, all of which are materially different to the picture that is being painted.






    I have no doubt that HMRC will do a deal with any new regime that involves them receiving the majority of the money due to them- either by way of a lump sum or by staged payments.



    However, do you note that this involves actually paying them AND the regime being a new one. For new regime read acceptable regime. Paul Murray is not a new Regime– he is part of an old regime which saw the tax liability spiral. Dave King is not New Regime– he has even greater history in a regime which saw taxes rise as a result of an unlawful scheme AND he is not exactly flavour of the month when it comes to revenue authorities throughout the world. Dave KIng may well not be the kind of new regime that the revenue would consider ………acceptable.



    Accordingly, whoever is in bed with Murray had best be prepared for the revenue running the rule over their own fiscal history and business acumen. They had better have no connection to the old board, and they had better be prepared to cough up a healthy amount of money to Hector for there to be any deal that does not Involve Liquidation– but as I say above, I do not believe that this is the plan of the Murray consortium, as just like David Murray, Craig Whyte, Alistair Johnston and damn near everybody else involved— They simply do not wish to pay the tax at all! Never! In any shape or form– and to make sure that this is the situation they would rather see Rangers PLC Liquidated and all that this then means in terms of the club’s history and so on..






    All this spin on there being no deal with the revenue if Whyte remains involved is designed to be a blatant attack on Whyte’s ability to insist and rely upon the famous floating charge.



    Let’s face facts, a liquidator ( and that is what Duff and Phelps will be ) has a duty to sell off the assets for the best price. They are no longer concerned with the sale of a going concern by this stage– they are involved in a pure asset sale with a view to recovering funds for the creditors.



    So step forward the creditors– and first in the line will be Mr Craig Whyte with security in hand. Make no mistake, Whyte will waive legal opinion, court documents and all sorts to make it plain that he is secured. He will block all other suggestions and any sale that does not see him paid out as a secured creditor. He will, in the absence of an offer which sees him collect a large wedge of cash, offer to extinguish his debt in return for the assets, such as they are, being transferred to his nominee– either him. or ticketus, or whoever– which then leaves him and him alone able to reach a deal with whoever actually wants to come and run Rangers.



    Remember Whyte has said that this will not be him. Mind you he says a lot of things, but in this instance I believe him. He will offer to lease Ibrox and Murray park back to whomsoever wishes to run Rangers, he may even offer to sell it to them. The price and the rent will be determined by whether the ticketus deal stands– but the principle will be the same– Whyte will control the assets while someone else– a New Regime– controls the trading of Rangers no 2 Ltd.



    AS for Duff and Phelps– will they really challenge this situation? For a start they will have to be funded. They will not embark on a lengthy and costly set of litigations to oust Whyte from his secured creditor status unless some one is going to pick up the costs. So in the absence of D&P being funded. Whytie will scoop the prize– be absolutely sure of that!



    Now who would fund D&P? Not Murray ( either Murray ) , not any of the minor creditors either. Not Ticketus — no the only one who might be willing to throw say £1m in for costs would be those who would stand to gain from a court victory– and that is HMRC.



    Will they do that? I don’t know, but make no mistake any such litigation is going to take a long time, and in the interim there may be the need for any new club to play elsewhere– whoever that new club might be, and whatever form that new club might take. However make no mistake, there will be no new club lead by Paul Murray and crew unless they have secured Ibrox in some way shape or form and if there is prolonged litigation that just simply can’t happen or at least is very unlikely.






    Let’s presume that scenario two is resolved, in the sense that Whyte is secured and wipes the debt in return for the stadium etc or that it is sold to a NEW REGIME or even leased to that regime. All the money goes to Whyte, or he gets the rent.



    Rangers NEW Co is formed, it plays football and trades as a football club from Ibrox. It is called something similar to Rangers, it has exactly the same customer base who claim it to be and see it as the same organisation as has always existed. It is admitted to the same league by the sport’s governing body, who have effectively enabled the phoenix club to continue trading as if there had been no tax case and taking no account of prolonged unpaid taxes other than perhaps some points deductions.



    In essence, after a swift company change and the inconvenience of a small footballing penalty, exactly the same trade is maintained– with no payment to HMRC– just as was envisaged by Sir David Murray, Paul Murray, Alistair Johnston and various others– even Walter Smith sought to justifying spending on players rather than pay tax it would appear.



    Does anyone think that HMRC are simply going to just accept that? They may and probably will chase former Directors personally for wrongful trading– that includes everyone mentioned above. But will they stop there?



    The revenue do have powers re New Co’s who operate in a phoenix style way- they can ask for all sorts of advance payments, securities, deposits and so on. If there is not enough “distance” between old co and new co– they can pitch up again and simply say “hey– you guys– you now owe us £60M or whatever and if you don’t like it then we will see you in court!”– and so it all begins again. They were not given those powers and rights not to use them!



    Some may say that this is fanciful– but just look at Portsmouth. The Revenue got screwed once– but by God they didn’t hang about for a second occasion, and in the interim they went to court and tried to secure a better position. Whilst that litigation was not ultimately successful in terms of a court result, it put the absolute hex on anyone coming in with fresh money for Portsmouth because– well hey Gaydamek had secured big chunks of money ( a la Whyte with his security in a way ) but if he wasn’t getting paid then here comes the revenue. Perhaps Hector always rings twice… if he feels it necessary!



    Duff & Phelps, Craig Whyte, Paul Murray and the good lord god almighty can run around, spin what they want, spout what they want, and shout what they want. The SFA and SPL can stand about like King Canute or Pontius Pilate, applying what they see as the rules, what they think are the rules or even the rules that they are yet to make up.



    The fact is that Rangers Football club under any guise is no longer controlled by any one entity or any one person. It is adrift, rudderless, and its destiny is not determined by football players and a ball, but by Lawyers, Accountants , Courts and Government bodies. Those seeking to control the club d noto have a good record when it comes to courts, government regulation and compliance. Nor do the SFA.



    There is no simple solution to this mess of their own making. There is and can be no certainty in the present circumstances, other than that there is a real chance of oblivion as a result of continued ego driven mistakes. This is not about saving Rangers Football Club, this is all about a group of people who all want to make money out of Rangers Football Club– even at the expense of the taxman– on a continued and continuing basis!



    However at the end of the day there is an old adage which is oft repeated and which has proven to be correct over the years and it is this:



    The only things that are certain are death and taxes…… though in this instance they may not necessarily arrive in that order!

  3. Paul67



    Do you agree that the Celtic board could stop this in its tracks by calling everyone’s bluff and resigning from the league?

  4. jungle jam67 on

    Paul 67


    Is the pre pack route that James Forrest was talking about in the early




    Pre pack and avoid all debts and stiff hmrc



    Would end in major court case ?




  5. For the good of everyone (except RFC) this cannot be allowed to happen. Scottish football would be (more of) a laughing stock… Surely HMRC could prevent such a blatant tax avoidance scheme coming to fruition – It really can’t be that easy…

  6. Roses! Smelling of.



    As expected.



    If this pans out then it’s ski-ing for me.



    No more wasting money on a publically admitted rigged league structure.



    I’d rather see Celtic resign and apply to Division 3 of the SFL while lobbying UEFA to recognise the SFL as the official league structure in Scotland affording Division 1 European competition.



    No rolling over Celtic.




  7. playfusbal4dguilders on

    paul 67



    a well written piece as usual, but i don’t like the sound of that.


    Whats to be done?




  8. Paul67



    Give us that again in laymans terms,



    Will our encounter at Ibrokes still happen?



    Is this scenario a good or bad thing? (for us)

  9. I think, since it’s highly relevant to the article, I should repost this:


    Since ‘The Murray Years’ started, how much have they had pumped into them/acquired from external resources, not including Champions League/enhanced sponsorship and gate money?



    ENIC/Joe Lewis: £40m


    Dave King: £20m


    MIH write-down: £51m


    NTL partnership: £20-31m ???


    IR/HMRC: £45m (based on £48m EBT usage)


    IR/HMRC: £3.5m (based on £4m Discounted Share Option scam scheme)


    Any others?


    Well David Murray has always claimed he’d put ‘over £100m of his own money’ into Rangers – shall we count any of that, and is he including the £51m write-down?


    Ticketus advance(s?): £25m


    non-payment of VAT/NIC/PAYE: £9m



    So any others I’m not aware of? I ask, because it’s really the only topic of conversation at work today and I’m trying to convince the Utd fans in the office that they’ve been propped up, from 1989 to today, to the tune of around £200m of external revenues. So far, above, I have well in excess of that amount.



    We’re trying to calculate what additional revenue streams have been made available to them on the back of this money and how much skew this has applied to the Premier Division/SPL.



    I have:


    Champions League money: ~£60m


    Enhanced sponsorship: £50-100m


    Enhanced gate revenues: £5-10-15-20-50-100m?????



    So, I think we can safely say that they’ve had access to, at the very least, £200m of money they should otherwise not have had access to, but also another £200m possibly on top of that.



    The point of this?



    A NewCo will be denied all of these revenue streams. There will be no Joe Lewis or David King. There will be no MIH write-down of debt. There will be no football tv bubble (NTL deal) to milk. And you can be damned sure that HMRC will be checking every single ‘i’ is dotted, every ‘t’ is crossed, every comma and full stop is in it’s correct place.



    What shape or form will a NewCo take? In the first instance, I think we have to assume the orcs will initially come out from Moria and the Goblin Gate in support of the new club. Heck, it really will be like a new day has dawned for them – it’ll appear that they are now free of the corruption of Minty and Whyte.



    Slowly though, they’ll realise that Minty’s methods, although ultimately self-defeating and utterly destructive, were in actual fact, highly effective in grabbing more silverware than they otherwise would have (think Motherwell and Hearts brief flirtations with Scottish Cup finals over the years – you get the picture).



    Slowly, they’ll slink back to their holes, rarely to be seen. And ever more slowly, their children and even they, will turn up elsewhere (once more, think Motherwell and Hearts brief flirtations with Scottish Cup finals over the years).



    And slowly, although how slow/quick this occurs remains a matter of conjecture, they’ll return (progress?) to the early 1980s.



    And now that it comes to it, we have to ask ourselves: what can Rangers 1690 bring to the table that can make them so indispensable to the SPL?



    I think the answer lies somewhere between ‘nothing’ and ‘very little’.

  10. BRTH @9.54



    Your excellent read fairly picked me up after that horrible Paul 67’s attempt to ruin my Thursday morning feeling of quite contentment with the football world in Scotland.

  11. mearns 2 milton on




    Following on from Ernie’s question. If has been on our minds but nobody has raised it in a while. If Newco jobby are put into SPL, do Celtic have avenues to explore? Would the attraction of Celtic without Rangers be appealing in England or Europe? M2M

  12. jock steins celtic on




    well Paul 67’s article backs your point up. and TBH I’m reeling here. my jelly & ice cream doesn’t taste so sweet now.

  13. So Ticketus was promised that they would get their cash back from the Newco?



    But how can the Newco honour the Ticketus deal while stiffing every other creditor? If it allows Ticketus to sell its season books rather than the Rangers ones it was originally buying is this not as good as admitting that it is actually the same team?



    And if the SFA/ SPL/ other clubs go for this monstrosity of a deal, allowing a club that is morally and financially bankrupt to pull a fast one they are abrogating every duty they have to act in the best interests of Scottish football.

  14. Still struggling to keep pace with everything … about a week behind on RTC but finally up to date on CQN.



    Through the magic of Sky I got the BBC debate on the future of Scottish football the other night. Most seemed to think that we have hit bottom and things are getting better. Not sure about that, I think in terms of money coming into the game things might still get worse. The talk or organising the top division seems to be about swapping one number for another and losing money, losing competitiveness, losing interest. We cant copy the FA structure as we simply dont have the numbers.



    Here is something a bit more radical. Expand the top division to 20 teams by merging it with SFL 1 and split the season into two parts. The first half, take the 20 teams and divide based on finishing positions the season before so that 1,3,5..19 goes into one league and 2,4,6..20 in the other. Play home and away giving 18 games. Then the we split again this time taking the top half of each league in one grouping, who play for the honours and European places, while the bottom half play to avoid relegation into the SFL. Points are reset at the mid-term split.



    Here are some advantages:


    1. Still have a 36 game season. Doncaster quoted 20M loss of revenue if we went to a 16-team league and only played 30 games.


    2. We dont play everyone 4 times. Some will be four times (by definition from the top half in terms of quality), some will be twice, some not at all.


    3. The money is distributed along a longer tail. Whatever the top teams lose in any re-balancing of TV money (which is inevitable once the O** F*** blocking minority in the SPL is disbanded) should (for the good of Scottish football) end up down at the lower end. Regan seems concerned about the gap between SPL and SFL1 teams.


    4. No-one is guaranteed of winning the league by bonfire night which was the problem this year.


    5. During the first half when we hope to be playing in Europe those assured of a top-half finish can relax and play football without fear that dropping and points will be throwing away the league.


    6. The champions will be the team that can put together a good run after Christmas. There are many teams that could hold things together that long so in theory it could be more competetive.


    7. You could even start the league earlier in the summer and have a gap in the middle. How big a risk for us to play more youngsters for a month while the internationals are away or recuperating.



    The obvious downside is that Thems in whatever incarnation they pick will be back sooner. There are probably others but we need to manufacture a league that works for our situation and at present we are simply continuing what we and others have done for the last hundred years.

  15. From previous thread…



    matty6721 on 8 March, 2012 at 09:45 said:




    You forgot to add that, Scottish football was probably saved from extinction during the Manchester riots because, the police, somehow, heaven forbid, escaped a fatality that night.


    Hail! Hail!

  16. Alasdair Lamont ‏ @BBCAlLamont Reply Retweet Favorite · Open


    Regan and the rest of the SFA board are meeting to hear the findings of Lord Nimmo-Smith’s inquiry into Rangers’ recent financial dealings.


    Retweeted by RhebelRhebel



    Tweet tweet…

  17. ernie lynch, no. Celtic can only resign from the league if they have somewhere else to go. Doing so without somewhere to go would be an empty gesture, you know it, I know it, everyone else would know it. No one would be convinced, we would look foolish having to either go out of business or crawl back.



    Need to retain focus, not be as ridiculous as Rangers have been.



    jungle jam67, possibly.



    playfusbal4dguilders, we have to wait and see how things pan out in the next couple of days. I would expect HMRC to get involved soon.



    31003, this scenario is not a good thing.



    KevJungle, abbreviate !*!*!



    mearns 2 milton, we need to explore other avenues but I have no idea how practical they are.

  18. Awe_Naw_No_Annoni_Oan_Anaw_Noo on

    I think it is fair to say that we have been watching the worlds footballing equivalent of the WWF since the “mid nineties”



    It will be removed from the realms of WWF and placed into an arena with even less credibility than it has now. Yes i have to say I thought that particular trick was impossible.



    If this happens we as a club should vocally call for the resignation of Michel Platini and resign from the Scottish league.



    If Celtic didn´t do so it would be finished anyway.



    Hail Hail

  19. Paul67


    You might have seen the books published by Clarkson which were basically his articles for the Times put together and slightly editted.



    He’s made millions from them.



    So, the point is; why don’t you put all your articles from this period into one publication?



    I’d buy it!




  20. So it looks like they’ll get away with it?



    No doubt the SFA/SPL will wait until after the split to look into contracts. Then if they’re deducted points they’ll finish 6th place with 0 points.

  21. Hi Paul,



    “Expect Duff and Phelps to conclude their meetings and report that they are in possession of a genuine offer from Whyte/Ticketus, or their proxy, to buy the assets of the company.”



    Another great insightful article – must say I find it surprising the Whyte Knight’s back in town, thought he’d had enough. Makes sense though he’s in to deep to do walking away.



    It makes for interesting days ahead, if we forget about the moral hazard for the moment – most everyone else has – is Ally’s army @ Iborx & Mullghuy really going to work with the MBB?



    Hail! Hail!

  22. Brogan Rogan Trevino and Hogan supports Kano 1000 on 8 March, 2012 at 09:54






    A splendid piece in this day of dizzying posts …




  23. Vinibhoy - Named Neil Lennon on his birth certificate on



    Is now the time to tell every SPL club that Celtic fans will boycott their ground all season if justice isn’t done?



    Or will that just make them dig their heals in even more?



    If they get away with this I will not be interested in Scottish football in the slightest.



    Celtic board should also threaten to leave the SPL.

  24. Awe_Naw_No_Annoni_Oan_Anaw_Noo on




    I have to strongly disagree with you.



    We should OPENLY ask all our fans not to attend away fixtures and refuse to cooperate until a new league was found or even founded.



    No point in playing in such a competition and actually charging for it I think it would leave them open to litigation.



    Hail Hail

  25. And IF


    You KNOW


    The HISTORY (hello)









    What price History?




  26. Paul



    Another stellar posting. Thanks.



    It’s all becoming too much to take in during a busy day.



    But feel free to keep it up!




  27. Paul67 on 8 March, 2012 at 10:13 said:


    ‘ernie lynch, no. Celtic can only resign from the league if they have somewhere else to go.’




    Where was Bob Kelly going to take us?

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