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. Gerryfaethebrig on

    Gerrybhoy 7.11pm



    Exactly….. Steven Fletcher has no movement at all, wee Griff or Fletcher ? Not a question for me

  2. I heard he was dead on

    Bad performance from Scotland. Did not deserve to win but maybe a draw was fair.



    Always knew this would be the rotten game.



    Worst performance in the group.



    Ireland have 6 points left in them. Scotland guaranteed 3 more.



    Must beat and draw with either Poland or Germany to get at least 3rd.



    Group will go to the last game.



    To all those having a go at Scotland – get a grip.



    4 Celts played in those games and a former Celtic manager.



    Unless you are Irish hoping for a reprieve (and I mean actually Irish as opposed to 4th generation like me) – pretty lame stuff.

  3. Great sporting weekend ahead, Ireland up next.. COYBIG.



    Dublin v Mayo replay tomorrow.



    Hurling Sunday.



    Over 160,000 at Croke Park this weekend….all Tims,







  4. Well, whatever magic WGS weaved when he took the Scotland job seems to have evaporated over the summer.



    What a pathetic, piss-poor effort of a 90 minutes that was by a bunch of over-paid, over-rated ‘professionals’ unable to beat a team of nomarks who sat back from the first whistle in a blatant damage-limitation exercise, then couldn’t believe their luck when Scotland folded like carboard cut-outs in a hurricane. The equivalent of current Sevco incarnation beating us.



    Total pussies. Worryingly, Broony looks to have lost his ability to boss a midfield against inferior opponents and Charlie Mulgrew can’t be decisive enough in defensive situations.



    Fletcher- utter imposter of a player, a boy who’s lost his appetite for the game as he wallows in the EPL millions he’s made. Thank Ghod the Celtic transfer rumours never came to fruition.



    After some real hope and delusions of adequacy, all we got tonight was same old, same old, bottle-merchant Scotland we’ve been watching for decades.



    Shudder to think what Germany will do at Hampden on Monday night if they need a victory badly.

  5. Good evening friends



    Very disappointed in Scotland tonight for the very same reason that I was very disappointed in Celtic 10 night ago – no fight, no idea, no Plan B and pedestrian pace build ups.




  6. Gerryfaethebrig on

    Clogher Celt



    Enjoy your sporting weekend, Robbie Keane 5/1 hattrick is easy money in my eyes (if playing)) by the way Dublin 2016 is still very much in the mix (holiday dependant)

  7. glendalystonsils on

    A few posters have said exactly what I was thinking. That Scotland performance was spookily similar to us in Malmo.


    Fancied team fails to turn up in crucial game against inferior team who want the victory more.



    I actually feel a bit sorry for WGS who looked a bit shellshocked after the game. He has done well to improve that Scottish team but they let him down tonight.


    The only criticism I would have of the wee man is that he should have brought Forrest and Griff on sooner


    I said to myself at half time ,if Wgs brings Griff on for the second half, he’ll get you your goal and you won’t lose the game.

  8. Gerryfaethebrig on




    Just walking out the door, I thought both performances were similar, is it the players who are scared or the managers are too scared, by the way I loved Gordon with us and also think Ronny is the real deal, do the managers have that much influence or should these guys just go out and do their job, I think Celtic had better players than Malmo and Scotland had better players that Georgia but alas it’s not that easy



    Anyway CQN take care and Hail Hail

  9. Not too confident that Scotland will be able to live with the quick one touch passing of both Germany and Poland.



    I’ve often heard folk refer to players as having a good (or poor) first touch. But invariably, it’s a players LAST touch that has to be effective.

  10. I heard he was dead on

    Celtic are reportedly looking to sign Rosenborg winger Pal Andre Helland.



    According to Norwegian editorial Adressa, Celtic have recently sent scouts to watch Rosenborg winger Pal Andre Helland.



    The Bhoys made eight signings this summer, as Logan Bailly, Saidy Janko, Dedryck Boyata, Jozo Simunovic, Tyler Blackett, Scott Allan, Ryan Christie and Nadir Ciftci all put pen-to-paper at Celtic Park.



    Manager Ronny Deila has strengthened his squad as the Bhoys look to compete in the league as well as in the Europa League this season, but he has already told the club’s official website that he is looking towards the January transfer window.



    A winger may be on Deila’s shopping list in the New Year, and Norwegian press believe that he has already identified a potential target.



    Adressa believe that Celtic scouts have been watching Rosenborg matches recently, and are specifically monitoring winger Pal Andre Helland.



    The 25-year-old has hit a stunning 22 goals in 23 games this season, and has two caps for Norway having starred for Rosenborg ever since his move from Hodd in July 2013.



    A left winger with a great eye for goal, Helland will be familiar to his Norwegian compatriot Deila, who would no doubt be able to lure him to Glasgow.

  11. I heard he was dead on




    You and me know Scotland.



    They are likely to get something from both of those teams but lose to Georgia

  12. So, a wee debate.



    Currently what would be more likely –



    Scotland to win at home against Germany




    Celtic to win at home against Barcelona



    I’d say Scotland, but the odds of either would be at least 10/1

  13. The Spirit of Arthur Lee on

    Scotland’s chartered plane hasn’t turned up at the airport. Another SFA cock up. Players won’t be back until 6am. Two days before Germany.




  14. Vale bhoy…



    just had a scan back and saw the replies to your post….



    Spot on as some have said, the crab like movement going forward drives me to distraction.



    By the time time we eventually get the ball up the park, the opposition have regrouped and then a floated ball into the box is the last option.



    With one up front, it’s a heavy burden on a lone striker role.



    As you say, it minds me of our team.



    We need a plan B,C, and D. We are telegraphic in style of play. HH

  15. Anybody else suspect Broonie is carrying a wee injury ? Was lucky enough (again) to secure a ticket for Pittodrie next week and think we need a fully fit Scott Brown up there. We’ll face a tough opponent but looking forward to seeing some of the new guy’s and how they cope.


    I wish the tribute act would just wither, but something tells me we are stuck with them and the dreaded OF tag.

  16. embramike says "the Huns are Deid" on

    What a difference watching the Germany v Poland match. Dynamic, incisive and imaginative football.



    Germany well on top and 2 up after 35mins before succumbing to a brilliant counter attack and diving header from Lewandowski to pull one back . World class save from Neuer and clearance off the line keep Germany ahead.



    Hate to think what either of these teams could do to a sub par Scotland team. Might find out on Monday night.

  17. Germania v Polonia, very good game.



    Do we have any scouts in Poland?



    We bliddy well should!




  18. Excellent game on ITV4.


    Three great goals.


    Poles back in it and almost equalised.


    Different class from the mince in Georgia.

  19. Ireland making very heavy weather of beating The Spanish Rock. At this stage they will be lucky to win tonight never mind against Georgia. The Faroes have equalised against Norn Iron.

  20. Ireland set pieces validating my earlier comments.


    Left footers take inswingers on the right side and right footers take inswingers on the left side.


    FFS Strachan WHAT have you been doing for the past 5 days???



    From a. Celtic point of view Its a sobering thought to think we were linked with Anya,, Fletcher and Maloney!



    Dodged a magazine of bullets there!

  21. Clogher Celt,


    don’t suppose you know a ghirl initials AK that used to be involved with the AICSC,


    she now lives in the states,got a brother Joey stays in Dublin

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