Prognosis for trading with criminally acquired assets


So you buy a business and then find that the entire structure and assets of company are subject to a police investigation, where it is alleged that the assets were criminal acquired. That’s a serious problem, but one which will take several years to manifest. Let’s call that Problem A.

Problem B is that you have also established that the business needs to raise cash. This is an acute problem which will manifest in a matter of months.

What’s the prognosis?

It could be 2018 before a verdict on Problem A, the criminal trial, is reached. If it’s not guilty, there are no consequences. If it’s guilty, the rightful owners of the criminally acquired assets can apply to the court to recover them. This doesn’t mean they will apply, but if they do, it’s highly likely that the court will make the award in favour of the rightful owners.

For our example, the rightful owners are creditors of a failed business, represented by a liquidator. It’s the liquidators job to get as much money for the creditors as possible, and in this instance, HMRC is the creditor with overwhelming influence.

There’s an added complexity. Although none of your directors are contaminated by the criminal investigation, there’s a concern that some of the accused are beneficiaries of shares in the company, or commercial contracts which the company has entered into. In short, the accused have left the stage, but they could still have a considerable financial interest in the success of the business, which may steel the resolve of the most influential creditor, HMRC. HMRC know such tactics well and would be reluctant to allow a convicted criminal to profit from their enterprises.

As far as Problem A is concerned, you have to allow the law to take its course and hope for a not guilty verdict. Should a guilty verdict transpire, you then have to hope to cut a deal with the liquidator (representing HMRC et al) to allow you to continue to retain title to the assets.

If the creditor was malleable, willing to come and go with you, this would be possible. Especially as the liquidator may have the opportunity of pursuing the professional indemnity (PI) insurance of some of the accused, who provided professional services relating to the transaction. Grab the PI money for the creditors and allow you, your shareholders, and the beneficiaries of your commercial contracts, to continue to benefit from ownership of the assets.

A great deal of uncertainty surrounds this, however. You would make it your business to get as close as possible to the liquidator. Make sure there’s no limit to the hospitality on offer, but ultimately, HMRC will decide how matters proceed. It may even be the case that PI money is pursued, and the assets are recovered and put on the market. There will, after all, be an eye-watering level of professional fees to cover.

Problem B is, as I said, more acute. Raising money for a business which is losing money and burning cash is difficult enough, but if there is a possibility the business has been built upon criminally acquired assets, the challenge is herculean.

The criminal trial may not conclude until 2018 (or later), and it could take a couple of years thereafter for the liquidator to petition the court for the assets and then dispose of them. In short, the assets could come back onto the market around 2020.

Problem B is for you to fund a trading deficit until 2018, then hibernate for a couple of years, and bid enough to buy the assets at auction in 2020.

In the short term all you can do is try to convince as many people as possible to become co-investors. Or put the money in yourself, of course (sorry, I know how you feel about that prospect). Then you could shower the liquidator with the kind of corporate hospitality illustrated in The Wolf of Wall St, and hope you’ve got enough credit with them to have them batting for you at the creditors’ meeting.

The prognosis? It’s not the fact that you are possibly trading with criminally acquired assets, or that your entire enterprise could be shut down with the drop of a sheriff’s gavel, that would worry me. There’s nothing you can do about that, so ignore it. The big worry is how raise the £25m to keep the lights on until you discover if you’re business’s founding fathers acted within the law.

Good luck with that.

This is an absolute minefield. No one is in control. Three years ago I suggested the best thing to do was to start from scratch at another location, this is the only way to proceed with certainty.

Share premises in Paisley, or Cowdenbeath or wherever will take you. Hope that you can carry some brand affinity (although clearly you’ll not be able to use any disputed IP, including brand names). Appoint reputable people to your board and get back to doing what you really want to do.

Behold to no one contaminated by the decades of misrule. Cut loose those who hold the onerous contracts. Allow the assets to come back onto the market in due course, knowing that by then you have all the customer goodwill you need to ensure there is no point in anyone bidding against you at auction.

The future will be nothing like the past, but at least you’ll have a future.

Celtic are the first UK club to react to the refugee crisis

“This is absolutely the right thing for us to do. Our club was formed by immigrants, many of whom had escaped the devastation of the great famine.” Tony Hamilton, Celtic FC Foundation CEO.

Proceeds from Sunday’s Jock Stein 30th Anniversary game will go to alleviating suffering of the refugees. The club will appoint a charity with expertise to ensure the assistance is productive.

I know we go on about the Foundation a lot, but it’s the most important part of our club, today and every day.  Never let this change.

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  1. The SFA don’t lead.



    They play safe while trying to figure out which way the chips are going to fall.



    Then they defer making any radical or real decision until events are evolving into a clear conclusion.



    Perhaps that is what an administrator does after all.



    What “real” decisions have the SFA ever made, I mean ever?



    BTW Paul, the PI will never cover criminal acts by any of “the gang of four”..



    Or for anyone actually.

  2. Terrymac that’s freaky just reading my first Harry Hole on holiday in Tuscany in between dipping into CQN HH

  3. thomthethim for Oscar OK on






    “The ethos that our club was founded on is sadly lost on many these days.”




    ….but. thankfully. not the club.

  4. Andrew Kerins


    Hope all is well.


    Had got you 2 but no worries as they are better than the ones that I got sorted during the week so I’m going to use them.


    Was waiting on a friend who was at an AIG “breakfast” getting back to me. By the sound of him it sounded very much like a BMCUWP breakfast.


    HH Andy

  5. Sorry about that, I didn’t realise the end of the Video would be so transformed into Earth Worshipping.



    Defo aff oot.



    Glasgow Celtic Champions.

  6. £25 million is just to keep the lights on. Not to build a competitive team and invest in infrastructure. And with Big Mike bleading the merchandise side of things it looks mightily grim for them.

  7. I met one of the deluded this morning ,slabbering something about justice or an apology,


    when I pointed out that people with a bit of knowledge never expected this to get as far as charges because of the implications to sevco, then pointed out that this could take 10 yr and when he asked if the GASL would keep it going, I clearly made out his GROAN.

  8. BSR



    Next time try eating tea bag, chase it with spoonful of sugar, milk followed by drinking boiled water straight from kettle.






    MWD said AYE

  9. WITS RE……..



    From the RP………….”Karl Burke is in great form, so we have to sit up and take notice when money comes for a newcomer of his, as it has for Timeless Art.



    He was reportedly as big as 12-1 in a place this morning, but was nearer the 3-1 mark by lunchtime.”



    Regards & Hail Hail



  10. jimmybhoycampbell on

    regular lurker here,



    a bit off topic here and looking for some help.



    Im in Cambodia and will travel to Amsterdam next week where i will coach the Cambodian team in the Homeless World Cup.



    As they say ‘timing is everything’ and the bhoys being drawn v Ajax in the same week as we’re competing in the Homeless World Cup is just perfect.



    Here’s the help part, and i know its a long shot…. anyone can point me in the direction a spare ticket or two for the game?






  11. thomthethim for Oscar OK on




    Your declaration, in praise of your tea preference, reminds me of an inscription on a headstone in the Linn Cemetery.



    It stated, of the deceased, that “he could eat burnt toast and sleep with the light off”.



    Close by was one that said, “Mary, who fell asleep”.



    I bet she got a shock when she woke up.



    If anyone has the time to meander through the Linn, they can verify.The graves are down to the right as you enter.


    BBHOY 137pm



    First Hole on holiday?



    Well worth the money,bud. Well done.

  13. Yesterday



    738 human beings rescued in the Sicilian Channnel yesterday..146 of that 738 were under 18. 11 human beings found dead in the hold of a trawler.Asphyxiated by engine fumes.It costs less to travel in the hold.

  14. I’m innocent Gov….






    Brian Stockbridge says police are not pursuing him over Rangers case






    4 September 2015 14:33 BST





    Brian Stockbridge was finance director at Rangers from June 2012 until January 2014.SWNS




    Brian Stockbridge claims he has assurances that police are not seeking to speak with him in connection with the alleged fraudulent acquisition of Rangers Football Club in 2012.



    In a newspaper report on Friday, it was claimed the former finance director of the club was a person of interest in the case.



    Four men were charged this week, including former Rangers owner Craig Whyte and ex-chief executive Charles Green.



    The men appointed as administrators of the club in 2012, Paul Clark and David Whitehouse, also appeared in court.



    Speaking to STV, Stockbridge said: “Following the reports in the tabloid press this morning, I instructed my legal team to contact the courts to establish whether or not officers of Police Scotland were attempting to contact me.



    “It has been confirmed that this is categorically not the case. I am now discussing these entirely baseless and outrageous claims with my legal team and I will take the appropriate action.



    “For the avoidance of doubt, I joined the club on 14 June 2012 and had no involvement in the acquisition, which appears to be the basis of the current investigation.”



    It is understood another, Imran Ahmad, is also being sought for questioning but is currently abroad. He declined to comment when contacted by STV on Friday.



    Green, who purchased the assets of Rangers when it failed to agree a company voluntary arrangement in 2012, received four charges when he appeared at Glasgow Sheriff Court on Wednesday.



    He stands accused of involvement in serious organised crime, a breach of the companies act, conspiracy and fraud.



    Whyte, the owner of Rangers when it went into administration in 2011, was also charged with conspiracy and involvement in serious organised crime.



    Clark and Whitehouse were both charged with conspiracy and involvement in serious organised crime.



    The four men all entered no plea or declaration and were released on bail

  15. P67



    How about less gloating regarding the latest twists and turns of the ongoing / never ending TFOD2 saga and more analysis of what the future holds for the club?



    Your recent output has all the hallmarks of — “look there’s a squirrel”.


    Lazy journalism indeed.



    Regarding the club and its future surely a big focus for the future should a much greater emphasis on the charity aspect of our endeavours?



    I have put a figure of £5mill as the annual target for our fundraising efforts.


    Something to aim for in the short to medium term.



    Two big games every season —



    International week in September.


    End of season finale hopefully with silverware on show.



    Need to give something back — do things differently from the EPL.



    Just a thought — £5mill pa?


    Is that a realistic target?


    Could we distribute it wisely?

  16. SOT @ 2.42



    Huge issue — possibly the greatest challenge facing the EU at the moment.


    Seemingly DoD / MOD futurologists have been chuntering on about this for 40 years.



    Mobile world meets falling birth rates and global media.


    I wonder if a new generation’s Sir Bob will come to the fore.

  17. Latin type strikers?



    What have the Romans ever done for us?!



    Except Paolo di Canio of course.




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