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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Didn’t Ralph Milne play for fergie briefly down manc way ,signed from Bristol City I think skilful player
RIP
Raymac
A couple of year ago Swansea picked up 2 or 3 bosmans from Spain and they where excellent
I see David Moyes was at Dunfermline today and he was at St Mirren park pre season also. I would hope we are asking him for his opinion on Spanish players.
Eastern European players also as Zbyszek has pointed out on a few occasions
Doc
True it is a modern classic but that Shamrock Design….. WOW just WOW :p
HH
Neustadt-Braw…
It would surprise you how many Celtic men that I speak to that want some format of the huns to play against.
My dad for one.
Each to there own.
All I want is a team that will go on the park and tear them a new one. HH
I am looking for two tickets for the All Ireland football final on September 20. They are like gold dust. If anyone can help, I’d really appreciate it.
I sat in main stand at a March with Ralph Milne and Gough when they beat us at Celtic park in the 80’s
Ole Ralph slipped and fell down the stairs after the match.
He was a very humble man and it’s tragic to see this happen to anyone
RIP Ralph
Why in the name of Jock do we all as humble posters assume or indeed declare we would could do everybody else’s job better than them. Apparently our Manager, scouts, owner and ceo know feck all about feck all. I wonder if they have a forum somewhere in cyber space where they discus the quality of posters who rip the urine with no qaurter given. I love the gift of supporting Celtic, easy pleased Paddy G.
Shocking decision by red to send of Bulgarian player just because he sent of Daniel di Rossi(sp)
Reds 2 Italy 1 Bulgaria 0!
I’d suggest a majority of Celtic fans and supporters want to play them….
BT
A wee element of ‘stand on’ (not quite stamp) by Bulgarian player?
Andrew kerins gwa
He played for Man U for a few years.
Praceapta
Soft red imo
Blinking spellcheck cannae spell Praecepta
I would like to offer my condolences to the family and friends of Ralph Milne following his passing away.
Someone had posted the other night that Ralph was ill and in hospital.
He scored United’s third goal when they beat us 3 2 around March or April 1983 , which helped them win the league that season.
It was Tommy Docherty who came out with cutting remark when Ralph signed for Man U.
Ralph, may your soul rest in peace.
Paul67 …..
Haven’t read much of your stuff since the fiasco in Malmo.
I know you are a Celtic ( with a soft C )board apologist but even I will give you serious. Kudos for this article.
You are a clever ghuy …..
Diagnosis v Prognosis……
Your prognosis is a brilliant route to go down, and take them away from the elegant solution,and keep them away from figuring the. Root Cause of their ‘troubles’
The diagnosis would frighten the shite outta the Huns……
Your best article for quite some time old son.
Hail Hail
Doc
Your design is just lift and copy. Nae thought, nae effort.
At least Bundoran Bhoy’s is an original design, by his daughter.
Cuff links will be dapper and remember to count each cufflink as a separate sale :-)
HH
CRC
cqnbadges@gmail.com
ps Kenny Dalglish is sure grumpy!
BT
Don’t worry about it – even I’ve had problems spelling it when I’ve used it as part of a login!
Bindoran Bhoy,you wish:-(
CRC, when someone gives you a gift, don’t through it away, use it.
The badge will be a classic.
Doc
I do not believe you were given any gifts :-)
HH
CRC
ps Feed the Bear tomorrow. Its getting close!
CRC, Feed the Bear?
What is this about?
And I have many gifts ya cheeky bassa!
CRC, Feed the Bear, well done Mhate.
Bundoran Bhoy
Can I have the cufflinks with the shamrock design PLEASE. I think that would make great cufflinks.
Doc
London zoo awaits :-)
HH
CRC
Enjoy the coffee:-)
glendalystonsils
Sorry mate 1st two designs are badges, only original CQN design will be cufflinks
HH
Someone asked, Could our board do any better than they have…..no they’ve done all they can with my thanx…..but the last couple of CL preps show that they are insufficient to the task….so a change of leadership/philosophy is needed…..BRT&H has stated it in better terms tho ;-))
Hypothetical…..if a business obtains all it’s assets fraudulently…..surely all monies raised through any share issue & any subsequent monies raised through use of these assets as security can b called into question…..where does it leave that business?…..up shit creek I would imagine ;-))
If, as we all can see whether we agree or not, that football clubs are run as businesses…..have the FTSFA done enough due diligence to ensure that everything that happened in Govan 2012 cannot be repeated…..nope they are not fit for purpose…..;-((
Philbhoy…..good luck with yer daughter ;-))
TCR…..glad yer out of hospital , getting better by the day ;-))
KevJ…..this morning was poor from you…..I prefer waffles wae my breakfast ;-))
Any1 know how Weefra is doing? ;-((
H.H.
Ralph Milne was a desperate soul latterly, who frequented many of the city centre bars I go to myself in Dundee.
Never short of company as you can probably imagine, given that he had hero like status amongst the United fans in the city, and I guess even amongst the Dundee fans, there was an enemy of healthy respect shown.
RIP Ralphy.
Ralph Milne Rest In Peace….
You have peace now I hope……lovely guy.
Tremendous player in an era of really good Scottish players…..
You would have been a multi millionaire earner in the EPL today.
You were a better man than Ferguson ever was.
Lots of players that played for him were far better human beings than him…..you were an exponentially better human being than him or Grim Jim McLean.
The world has lost a lovely guy……RIP Ralphie
*element
The Lurkin Tim
I was in Larkhall and he still goes on their bus
He is doing well and I hope he is looking in on cqn
Ralph Milne…terrific footballer. No idea about him as a person but as a human being he deserves to rest in peace as others speak warmly of him.
I remember driving up,to Tannadice on a December night , a few days before Xmas to see us go one up. In the second half DUFC tore us apart going down the slope, I think Milne played on the right with Sturrock playing to the left of Davie Dodds up front. He was a great player and deserved a longer life.
BT,
Cheers fur that….he is missed by at least 1 on here ;-))
H.H.
Doc a gift for myself and grandson see you at the corner
H.H.
BIG-CUP-WINNERS on 6TH SEPTEMBER 2015 9:02 PM
I’d suggest a majority of Celtic fans and supporters want to play them….
– See more at: http://www.celticquicknews.co.uk/prognosis-for-trading-with-criminally-acquired-assets/comment-page-33/#comments
You are so wrong on this.
The LurkinTim, Make that 2. Met him once a lovely wee gent. Probably too much of a sensitive nature for the argy bargy of a football blog where disputes can be fermented and exasperated by trolls and fools.
tommie20, will look forward to it Mhate, see you there.