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. South Of Tunis on 4th September 2015 4:32 pm Choon alert-



    A truly great / rare as as Hen’s teeth Dub LP has finally been reissued by those lovely chaps at Dub Store Records –



    Tommy McCook -Sannic Sounds



    Highly recommended!




    Nice one. I have a vinyl copy of “Come Rock With Me In Jamaica” which features a few Tommy tunes. Guessing the one to mention is more recent. Will check it out..

  2. I heard he was dead on

    Lets hope Scotland do this today.



    It’s been too long for Scotland to be outside of major tournaments and it would be great for WGS and Broonie and the rest going to France next year.



    Great chance.



    No more hard luck stories.




    Ah ! Come Rock With Me .A mighty fine sampler from Treasure Isle .Issued the year I left school ..



    Sannic Sounds was issued in 74.A very limited issue..Never got it.Could never afford it when it came up for auction .It was bootlegged .I bought.the bootleg but the sound is crappy.Ordered the repress today – can’t wait !

  4. F.A.B. Virgil (WATRC) on




    Does it have E Lynch written into the collar? Could be an original…




  5. chicagobhoy1967 on

    Thank you, Paul, for the illuminating explanation of the issues and forecast.



    It all begs: How do these wealthy people, no doubt aided by advisers with experience and expertise, not grasp this circumstance and see the trapdoors?



    Are they arrogant, stupid, or naive (to think that this could possibly end well)? If one wrote this script and attempted to find a buyer, Hollywood would laugh at its implausible plot. Mission: Implausible — can I copyright that?

  6. Georgia technically better – without doing very much. Ratface and mutton playing ok surprisingly

  7. Lennon n Mc....Mjallby on




    The entire cast of the last five years has been hand picked from lodges across Britain,forced and threatened to play their part best they can or secrets and lies revealed,essentially a bunch a dafties that only got where they are because of the craft.



    imho of course ;)

  8. 16 roads - Celtic über alles... on

    In the year of 2000 there were only seven countries in the world without a central bank :


















    North Korea.







  9. 16 roads - Celtic über alles... on

    The Fifth plank of the Communist Manifesto reads as follows:



    “Centralisation of credit in the hands of the state,by means of a national bank with state capital and an exclusive monopoly.”




  10. Brown is hiding. He is not offering an out ball and when he does have it he is passing the buck to whoever is closest. Poor.



    I wonder whether he struggles in the heat? He was pretty awful in Qarabag too.



    Not much upfront either.

  11. lennon's passion on

    Instead of watching Scotland I watched the end of Jerry McGuire. Then I noticed Phil saying Rangers have a mystery investors :-)))). King shouting at them SHOW ME THE MONEY.

  12. I think Brown has been struggling most of this season. Doesn’t seem to have quickness or energy.



    I thought Scotland started well, but faded. Wee Sean us nowhere to be seen…..



    Would like to see Griffiths and Forest given a go…..

  13. 67Heaven .. CHALLENGING THE LIE ..I am wee Oscar...... Ipox belongs to the creditors on




    How do I make a donate via Celtic to the refugees, please….

  14. Just bring our players back our players uninjured please Gordon. Two grueling games in quick succession.



    Looks like the fatcat SFA “Save Ra Bearz” crowd can forget their official junket to the tournament next year. They’ll have to attend by flying under the radar…again.

  15. 16 roads - Celtic über alles... on

    Saudi Arabia, Qatar, the United Arab Emirates,Bahrain and Kuwait have been key players in the Syrian conflict – investing billions of dollars training, arming, funding a constellation of Jihadist factions, many of them foreign.



    Saudi Arabia, Qatar, the United Arab Emirates,Bahrain and Kuwait have offered zero resettlement places to Syria refugees.




  16. 16 roads – Celtic über alles…



    The Earth Charter… nuff said



    Gorby, Rockerfecker and a guy called Maurice Strong, a real New Age pagan.



    Wee Jamesie on, get him on the ball.

  17. jimmybhoycampbell on








    thanks for that kind offer bmcuwp, email sent



    you’re a gentleman






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