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. Sipsini



    Plan A: when the ball comes to you – control it (N.B. it’s not a bag of cement – it’s spherical – it’s easy to manoeuvre).



    Plan B: when you control it – be aware of where your team mates are (N.B. that’s the guys in the same colour of jersey – the ones you train with daily).



    Plan C: when you pass to a team mate – try putting the ball in front of him (N.B. this makes it easier for him to run onto and prevents sideways crabbing).



    Plan D: when you cross a ball – the object is to put it into the opponents box (N.B. that’s the area of the field marked with a small rectangle – surrounded by a larger rectangle with a ‘D’ in front of it).



    Now if you can master A-D – chances are you score goals and win games!



    Not from the Jose manual (How to park buses)!

  2. Paddy Gallagher on

    I love popping in infrequently to this sacred site.


    Celtic showed no ambition by not signing a striker!


    Celtic tried to do a late deal to secure the services of Stephen Fletcher!


    Good that shows ambition, at least we tried.


    We dodged a bullet by not signing Fletcher.


    Ronnie Bhoy just do your own thing bud.

  3. I heard he was dead on




    Ireland were always winning tonight just as every team will manage vs the Spanish Rock team.



    If Georgia play like that tonight, it might be premature celebrations in Ireland.



    Both Scotland and Ireland are average at best.



    Scotland have the head to head

  4. I Heard he was Dead, Totally agree mate, said it earlier. Ireland will struggle to beat Georgia but if they do Scotland will have to grind out a point from either Germany or Poland.

  5. TBJ says Wee Oscar Knox is in heaven with the angels on

    Pity big dermot didnt pay robbies wages to stay at celtic



    Has keane ever spoke about the disgrace at mordor that day

  6. I heard he was dead on




    I still think the key game is Scotland at home to Poland.



    If the Scots win then they need a favour from Ireland especially if they get the point vs the Germans.



    If not I expect Scotland in the play -off because of the head to head.



    If Scotland had won tonight it really would have been cat among the pigeons stuff

  7. If Scotland beat Poland they will go through. A draw might even be enough. Can’t see us taking anything off Germany or Poland. Unless maybe last game if Germany are qualified they might send reserve team.

  8. Praecepta…



    Plan E…



    When you have a toaty wee striker playing himself upfront, drive a low hard ball into the six yard box…the Bobby lennox way.

  9. Gordy Bhoy,



    No I don’t know, the lady. But I know who you mean.







  10. jude2005 is Neil Lennon \o/ on

    U20s got beat 2 nil today by the Jags. Big Boer was playing not very btw. 17k a week too.

  11. SOT



    Georgia 1 Scotland 0.



    ” A deserved victory for the better team ”



    Italian radio 4 9 15.



    Good shout.



    Definite comparisons with Malmo, had to be, considering four of ‘us’ were on the park (and wee Shaun Maloney.)



    Georgia were better in every facet of the game.



    Scott Brown (neutralised) Charlie Mulgrew (good haircut) Leigh Griffiths ( expensive weave ) James Forrest ( like all good sides, they made his cul de sac )



    Better sides sometimes let you have the ball, when they know they can prevent you from doing anything with it.



    See Malmo – see Georgia.



    p.s. then they go up the park and score, it’s a simple game

  12. evening all



    just wondered on the off chance if anyone has / knows of a spare ticket for the aberdeen game



    just had a phone call saying a promised ticket will not be forthcoming, thanks in advance

  13. Cloher Celt


    I met the 2 of them in America at the world cup,


    spent a fortnight with them,kept in touch ever since,


    although not seen either of them for a few years now

  14. Haha Faroe Island fans sing ‘Just cant get enough’ to the Norn Iron fans



    They’ll not like that Ted

  15. Sipsini



    The Praecepta Bhoy is wat too young to have seen Bobby Lennox!



    ‘Phoned my Dad at 4.55 to tell him what channel the Scotland game was on. Just called him now to apologise for phoning him at 4.55 to tell him which channel the Scotland game was on!



    HH jamesgang

  16. Roy Croppie –



    Charlie, Paul and Davie in the front row but please out me out my misery with the 2 that are flanking Big Billy (Danny Crainey and A N Other?)

  17. Gordybhoy64: I know who you are talking about. AK is still very highly regarded within the AICSC and, iirc, there was an article about her and her brother in the souvenir magazine at this year’s charity dinner.

  18. blantyretim is praying for the Knox family on

    Clogher Celt



    Sorry but you are only a Tim if you are a Celtic supporter so I’m afraid Dublin will be full of Mancs , scousers goooners and very few tims

  19. Gordy,



    If you e mail me their names, I will find out tomorrow and let you know.







  20. Disappointing performance by Scotia tonight. Another example of why 4 2 3 1 is an anathema to Scottish football. The only manager to have any success playing this nonsense was WS with his anti football. Time for RD to bin it.