Promises Promises


My last post seemed to cause a bit of confusion on the Interwebs.  I guess that the big cheesy ironic grin on my face did not translate to these dull, grey pages.  Some seemed to think that I was saying that Sir David Murray is poised to make a comeback in the lives of Rangers supporters.  In fact, I was suggesting nothing more than he has the ability to selflessly act to help Rangers.  I say selflessly because there is no path for Murray to return the  £1 he received for his shares.  For the avoidance of doubt (a phrase we will meet again), Sir David Murray’s only path back to Rangers is to buy his way back in.  There is more chance of Neil Lennon wanting to own Rangers than Murray.  That part of the club’s history is well and truly over.  (Few seem to understand the extent to which Murray has lost control of MIH and its subsidiaries.  It was Lloyds who wanted a deal with Whyte on these terms.)  Before moving off this subject entirely, we will take a look at some of the other details of the contract that sold Rangers to Craig Whyte’s Wavetower.

A section of the Share Purchase Agreement (SPA) labelled 8. CONDUCT OF THE TAX CASE sheds light on how the (Big) Tax Case is being managed now and clarifies who is responsible for what.  I will summarise this section below:

  • The Seller (i.e. Murray MHL Limited) is responsible for negotiating with HMRC “and agreeing a full and final settlement of the Tax Case on behalf of the Company” 
  • Rangers shall not make any admission of liability regarding the Tax Case without the written permission of MHL.
  • Rangers shall make no attempt to communicate directly with HMRC regarding the (Big) Tax Case
  • MHL is paying for all of the legal costs of Rangers’ appeal and Rangers must use MHL’s chosen advisers / lawyer
  • Rangers promised to not terminate the employment of Key Witnesses- one of whom is Martin Bain!
  • Rangers still have the right to settle with HMRC on terms of its choosing (presumably communicated through MHL)

We can discuss the significance of these points (and its apparent contradictions) in the replies section of this blog).

After a seemingly coordinated attack on bloggers from the mainstream media this weekend, I was especially tickled to read that the SPA also states:

For the avoidance of doubt, the Seller shall not be required to make any payment on behalf of the Company in respect of the Tax Case.

This will doubtless be a revelation to the long line of print and radio hacks who reassured Rangers fans for months with tales that David Murray (personally or through the company that bears his name) would pay any tax liability.  I have been keeping an electronic scrap-book where I maintain clippings of the articles and audio from these professional beacons of truth.  It will make a fun coda to this project to post this material online once the dust has settled.  This site can become a permanent monument to quite how wrong Tom English, James Traynor et al have been for so long.  We will also be able to compare their writings of late to the early revelations of this blog.  Interesting?  Maybe not, but it will amuse me no end.

About rangerstaxcase
I have information on Rangers' tax case, and I will use this blog to provide the details of what Rangers FC have done, why it was illegal, and what the implications for what was (updated) one of the largest football clubs in Britain.

390 Responses to Promises Promises

  1. (I had written a full blog post, but then realised that I am not sure enough of what is going on to give it that kind of platform) In advance of our legal experts weighing in, my take is:

    Rangers have kept themselves on life support by selling off another piece of the family silver.

    It looks to me that Rangers at some point recovered the fixed charge on their catering revenues that were promised to Azure Catering (a former Murray company). In recovering, but not cancelling the fixed charge, Rangers have a security of sufficient vintage that it will be useful in defeating claims that against a new-on-the-scene creditor as an alienation of assets.

    It looks to me that they have borrowed cash to avoid an immediate meltdown from Close Brothers. Close Brothers have a fixed charge that ranks higher in priority than the floating charge that protects Whyte’s interests. In effect, Whyte has sold off part of his slice of Rangers.

    We are not told how much Rangers have received, but Close Brothers will be able to fire sale Rangers’ assets until it is fully satisfied (i.e. paid 100% of what they are owed). This will greatly complicate a Rangers insolvency and increases the risks of liquidation. With all of Rangers’ assets being applied to this fixed charge, Close Brothers will have the ability to cherry-pick any specific assets they want in a way that a floating charge holder cannot.

    For example, a floating charge holder has to rely upon a receiver / administrator selling assets and he takes only the proceeds. A fixed charge holder can simply lay claim to named assets. So if Close Borthers wanted to take ownership of Ibrox, they could if the valuation of Ibrox is less than they are owed.

    My questions for our legal gurus:
    1. Is this interpretation correct?
    2. I recall some details that said that a receiver could only be called in where a floating charge existed without a fixed charge being present. Is this true or did I dream this?
    3. If 2. is true, does this mean that Whyte has forgone the option to file for receivership?
    4. Can a pre-existing fixed charge be “expanded” to any new value or is it capped at its original value?

  2. easyJambo says:
    02/11/2011 at 1:34 am (Edit)
    My reading is that Close have been given a Fixed Chage in preference to the Floating Charge.
    _______________________________________________
    That is my reading too.

    It makes sense. Who would lend to Whyte and know that they held subordinated debt?
    Answer: no one.

  3. rab says:
    02/11/2011 at 1:44 am (Edit)
    Does this change take a long time to make it through its legal processess, or is it a simple filing task. Was craig whyte unprotected until it became registered, if so, does this now imply his need for protection has become great, ie, no funds left to delay the “event”.
    _________________________________________________________________
    Whyte has been protected all along. He paid cash for the Lloyds debt on 6 May when he bought the shares for a quid.

    This is actually releasing part of the assets that protect Whyte to a new creditor.

    This is not the first time that Rangers appear to have dipped into this well. I point you towards this charge: https://rangerstaxcase.files.wordpress.com/2011/09/63771099-rangers-mg01s-02-09-11.pdf

    We do not know the amounts involved, but it looks like Whyte is giving away the benefits of post-insolvency ownership. If he has to do this now, there will be not much left by December. He will have to sell players or mortgage more. Either way, it looks like Whyte is not dipping into vast hiddent pools of wealth but rather is borrowing from the corporate equivalent of a payday loan.

  4. From the Close Brothers website:
    Close Brothers – Leasing has three types of transaction that it will consider, covenant led transactions, where the user is long established and has very strong financial strength; asset based transactions, where the value of the asset supports the transaction; and non standard transactions where we can be convinced that the risks are acceptable to us.

    Which type of transaction do you think Rangers have entered into? 🙂

    Like a kid at Christmas, I cannot sleep now.

  5. stunney says:

    Funding arrangements normally take the form of standard or bespoke leasing contracts but may also comprise of loans or mortgages secured on underlying assets by way of registered charges. Similar arrangements may also be offered in respect of Sale & Leaseback or refinancing facilities where you may wish to raise cash for acquisitions or working capital purposes.

    http://www.close-leasing.com/asset-backed-lease-finance.html

    “Any old iron, any old iron, any, any old iron…”

    Like big blue gates, for instance. 🙂

  6. kotton says:

    The end approches i have watched this blog like some have said like a kid at xmas great work by all on here but my goes of to you RTC … I really hope we all know who u are u wont want for a drink in any celtic pub in the land or a job in journolisim (sp) 🙂

  7. kotton says:

    hat*

  8. duggie73 says:

    Can anyone make out whose signature that is on the companies form no.466 document?
    Does anyone know of a Jouuu Aluuuuu?

  9. k3lly says:

    This HMRC doc (applies to VAT and Tax) would suggest Admin. Receiver can be appointed
    ” by a secured creditor who holds a debenture agreement containing floating, or fixed
    and floating, charges over the whole, or substantially the whole, of a company’s assets.”

    http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000122&propertyType=document

    So CW would still be able to file for Receivership? No mention of this doc not applying to Scotland?

  10. k3lly says:
    02/11/2011 at 4:22 am (Edit)
    This HMRC doc (applies to VAT and Tax) would suggest Admin. Receiver can be appointed
    ” by a secured creditor who holds a debenture agreement containing floating, or fixed
    and floating, charges over the whole, or substantially the whole, of a company’s assets.”

    http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000122&propertyType=document

    So CW would still be able to file for Receivership? No mention of this doc not applying to Scotland?
    _______________________________________________________________________

    There is no Administrative Receiver in Scotland (? I think?) Under the law of this time, there was just a Receiver. I am sure I read something about the receivership in Scotland being only for floating charge holders, but our lawyer friends will have an answer for this off the top of their heads.

  11. duggie73 says:
    02/11/2011 at 4:13 am (Edit)
    Can anyone make out whose signature that is on the companies form no.466 document?
    Does anyone know of a Jouuu Aluuuuu?
    ________________________________________________
    I can say with certainty that it is not Craig Whyte or Gary Withey. The only person left with that authority would be Ali Russell. Does not look much like it could be him, but it is possible. Good question.

  12. Here we go: from the HMRC website. There may be an administrative receiver in Scotland after all!

    INS1904 – Receivership (Scotland)
    Receiver’s appointment
    When a company fails to keep to the terms of the loan or encounters financial difficulties, the holder of the floating charge, usually a financial institution, may call up its security by appointing a receiver.

    A receiver is not a liquidator and may be appointed after a liquidator has been appointed. Thus a company can be in receivership and liquidation at the same time.

    There are two classes of receiver

    administrative receiver.
    Appointed when the whole or substantially the whole of the company’s assets are covered by a floating charge created before 15 September 2003 and is still in existence.

    receiver.
    Appointed when only a part of the assets is covered by the charge

  13. Adam says:

    Just for housekeeping as i havent read the document yet, Azure are not a Murray Company RTC.

  14. Mark Dickson says:

    Have just woken up can somebody please offer a quick summary?

  15. Adam,

    Not any more, but they were IIRC

  16. Cortes says:

    Signature is agent’s on behalf of company, i.e. Morton Fraser’s presenting solicitor?

  17. Cortes says:

    02/11/2011 at 5:57 am(Edit)

    Signature is agent’s on behalf of company, i.e. Morton Fraser’s presenting solicitor?

    ___________________________________
    Thanks

  18. firsttimeposter says:

    Im going to take a guess its this guy http://www.morton-fraser.com/people/28_john_lunn
    Are we sure the form is legit?

  19. Adam says:

    Spot on RTC.

  20. AllWhyteOnTheNight says:

    So they have given Close Brothers a fixed security over the money due from Azure.

    Surely they will have to exist for all or a substantial part of the season for there to be monies due from Azure. Do Azure pay monthly. I’m going assume that there is already an amount payable by Azzure, say £2m, but they don’t have to pay it till January.

    Whyte has gone to Close and they have given him £1.5m now but will sit and wait and collect the £2m in January. For this to work for Close then the payment from Azure has to be due and payable even if there is an insolvency event unless they have got guarantees from other parties such as Whyte.

    A fixed security for Close Brothers without a floating charge doesn’t really give them any way to enforce.

  21. The motto of this blog should be “Nessum Dorma”! That’s the only way to keep up!

    Some interesting (BUT IRRELEVANT TO THE MAIN ISSUE) notes re Azure Catering Services Ltd.

    As it appears that Sir David Murray has no more connection to Azure, that is why these notes below are of no relevance to the main issue.

    A former director of Azure Catering Services Ltd is Sir David Murray. Azure Catering Services Ltd is now a wholly owned subsidiary of Azure Support Services Ltd.

    A former director of Azure Support Services is Sir David Murray. Azure Support Services Ltd is now a wholly owned subsidiary of Eliance Events Ltd.

    Eliance Events Ltd is a wholly owned subsidiary of Eliance Restaurants Ltd.

    Eliance Restaurants Ltd is a wholly owned subsidiary of Elior UK PLC.

    Elior UK PLC is 88.38% owned by Avenance SAS and 11.62% owned by Avenance Enterprises SAS.

    The Avenance Group is one of France’s biggest companies, and I am not going to delve through the French equivalent of Companies House to find out any more.

    This is a good example of the perfectly legitimate corporate chains of control whereby people often have no idea with whom they are actually dealing.

    For the avoidance of doubt, that last sentence should not be taken as referring to any vastly wealthy entrepreneurs from North Lanarkshire.

  22. Cortes says:

    Nessun Dorma, por favor, Paul 🙂

  23. AllWhyteOnTheNight says:

    As someone says this really does look like the equivalent of a pay day advance and the timing would suggest that this is where they got this months wages from (and not from the non existent cash that Whyte has stashed somewhere).

  24. Davie b says:

    Does anyone think that Close have just woken upto the fact that they were unsecured creditors under the original loan a couple of months ago and shat themselves. They could have taken steps to protect their position ie tell CW the loan is called in unless they are given a better security. If so, I would expect a new security to be filed at some point, if it is not filed then something else is going on.

  25. rab says:

    RTC

    Thanks for clearing that up for me, i think i understand whats happened now

    I must pay more attention in class. Repeat 100 times.

  26. Are Rapid Vienna not due £1.1m sometimes this month?.Don’t think they’ll be paid.
    If cash borrowed was used to pay last months wages,end game can’t be far away.You can’t do this indefinitely.don’t think they’ll make it to January.If they do,it’ll be the biggest fire sale Scotland has ever seen.

  27. Davie b says:

    Forget the new security bit above, the original ageement with Close is the assignation referred to in the new document, which has now been reclassified as a fixed charge, which means it is valid now.

  28. Barney says:

    Has Craig Whyte served legal papers on the BBC or was that all bluster?

  29. v says:

    Nessun Dorma, staying up all night to solve a riddle

    Sounds about right!

  30. jimbo milligan says:

    Why would whyte enter into this kind of arrangement with close instead of just pulling the plug ?

    He must be fully intent on guiding rangers through to the FTT verdict, even if potentially foregoing some potential profit into the process.

  31. Joe77 says:

    So does this basically mean that whyte has borrowed this money at massive interest rates …….to pay the wages for this month?

    if so how long can he go on doing this?,
    and is he doing this just to get to january so he can sell players to continue running the club?

  32. Jean says:

    I don’t have much of a brain for this sort of thing but it sounds like CW is tying himself up in knots and all it will take is for someone to pull a loose thread!

  33. I suspect the following is a result of me not being able to read webpages properly, and may already have been clarified by RTC. This may be a “nothing to see here – please move along” matter, but I thought I’d check.

    The Form 466 bears to be in relation to an alteration executed by, inter alia, Liberty Capital Ltd having its registered office at 7th Floor, Aldermary House, 10-15 Queen Street, London EC4N 1TX.

    Therefore Liberty is a UK registered company.

    Companies House lists the following.

    Name & Registered Office:
    LIBERTY CAPITAL LIMITED
    20 EATON MEWS SOUTH
    LONDON
    SW1W 9HP
    Company No. 02308588
    Status: Dissolved 06/06/2000
    Date of Incorporation: 25/10/1988

    Name & Registered Office:
    LIBERTY CAPITAL PLC
    40 BROADWAY
    LONDON
    SW1H 0BT
    Company No. 06451250
    Status: Active
    Date of Incorporation: 12/12/2007
    Country of Origin: United Kingdom
    Company Type: Public Limited Company
    Nature of Business (SIC):
    7499 – Non-trading company

    I can’t see another “Liberty Capital Ltd”. I note that the registered office is the same as that of Cairnwell Investments Ltd, a non trading company where Mr Whyte is or was a director.

    I am sure I am missing something very obvious. Can anyone help?

  34. Brenda says:

    Jean @ 8.27am ditto 🙂

  35. Jean says:

    Brenda says:
    02/11/2011 at 8:34 am

    But it all sounds so good doesn’t it lol

  36. Jean says:

    Brenda says:
    02/11/2011 at 8:34 am

    I should say that it sounds promising 🙂

  37. Barney says:

    firsttimeposter says:
    02/11/2011 at 6:08 am

    Im going to take a guess its this guy http://www.morton-fraser.com/people/28_john_lunn
    Are we sure the form is legit?
    ————————–
    Looks like John A Lunn, so you would be right, I think.

  38. weeminger says:

    Paul McConville says:
    02/11/2011 at 8:29 am

    This issue with addresses is something I’ve previously brought up in relation to his Swiss address used in a share purchase for Worthington Group. As we all know the address is that of an industrial estate on the outskirts of Geneva. Yet there is no record of Whyte ever having been there. The only vague connection I could find was with another company that has a registration in the BVI – when I say connection that is it – both Liberty Capital and that company had BVI address. Incredibly tenuous.

    My original point was querying the legality of using an address your not actually located at when making a large share purchase and that was dubious how likely it was that checks would be made?

  39. Hugh McEwan says:

    Private Land says:
    02/11/2011 at 12:02 am
    yossery says:

    01/11/2011 at 11:42 pm

    If I require your advice on what opinions to hold I will ask, someone else.
    Just as well their financial position is not twice as bad or they would be 18 clear, and limping along.
    ___________________________________________________________________

    You’re doin’ that comma thing for a laugh now are you not?

    ——————————————————

    I think he meant to actually use ellipsis. It’s a common mistake.

    As are split infinitives. Like the first sentence in my post.

  40. longtimelurker says:

    From KDS.

    *Starts*

    celticfcblog
    31 Oct 2011, 05:43 PM
    RE: The floating charge.
    This is the document that allowed Lloyds to claim first dibs on any assets in the event of the huns going bust.
    This was then assigned to Wavetower/huns group after they agreed to pay Lloyds £18m.
    All of Whyte’s plans for recouping his cash rest on his ability to enforce this floating charge over all the huns’ assets.

    At present, all we can do is speculate.
    *However, one thought is that RFC Group may have reassigned that floating charge to another company.
    Perhaps one based in the British Virgin Isles.
    And perhaps that’s where the huns’ assets (including the title deeds to Mordor and Moonbeams Park) are heading.
    If so, the asset-stripping has begun.

    *NOTE: This is all completely unfounded speculation.

  41. longtimelurker says:

    Sorry previous post has gone in moderation for a hvn word

    From KDS

    *Starts *

    31 Oct 2011, 05:43 PM
    RE: The floating charge.
    This is the document that allowed Lloyds to claim first dibs on any assets in the event of the hvns going bust.
    This was then assigned to Wavetower/hvns group after they agreed to pay Lloyds £18m.
    All of Whyte’s plans for recouping his cash rest on his ability to enforce this floating charge over all the hvns’ assets.

    At present, all we can do is speculate.
    *However, one thought is that RFC Group may have reassigned that floating charge to another company.
    Perhaps one based in the British Virgin Isles.
    And perhaps that’s where the hvns’ assets (including the title deeds to Mordor and Moonbeams Park) are heading.
    If so, the asset-stripping has begun.

    *NOTE: This is all completely unfounded speculation.

  42. v says:

    Aldermary House, 10-15 Queen Street, London EC4N 1TX seems to be the address of merchant house group

  43. longtimelurker says:

    More from the same guy on KDS re this latest filling.

    *Starts*

    The document confirms that a Floating Charge over the Whole Assets of RFC have now been assigned from Bank of Scotland to the RFC Group and Liberty Capital.
    Official date of the transfer is October 28.
    Were we not told that date was significant?
    That’s Whyte gathered in his chips.
    Now he’s about to cash them in.

  44. Here we go again.Sorry if I’ve got it wrong.
    If Close now hold a priorty charge,Whyte is losing control.Therefore time to move assets to Liberty Capital in readiness for Insolvency.This will be sooner rather than later as the money borrowed,the less his return(unless he’s charging RFC more interest than he’s paying Close).

    Hope commas,etc are in the right place.If not,please blame English teachers at Holy Cross,Hamilton,in the early 70’s.

  45. Sorry,
    That should read”the more money borrowed”.

  46. longtimelurker says:

    Here’s a pretty good explanation of these latest ‘developments’ for those of us who are somewhat financially challenged. LOL.

    From KDS again.

    *Starts*

    A)

    The document is not the assignation of the floating charge itself, which took place on 5th May of this year according to this document. An assignation of a floating charge does not have to be registered. It does of course confirm that Lloyds assigned the Floating Charge (for how much or whether it has been paid is quite another matter…..I still think that zero or little money changed hands and that Lloyds have some sort of security against Whyte or Whyte’s companies for the debt)

    What this document does is give Close Leasing Limited priority by way of their fixed charge over the floating charge. In other words Close Leasing (whoever they are) have coughed up some cash or are about to to Rangers. Their security for that cash has now been prioritised.

    Edit to say it may be that Close have paid money to Rangers and are now getting concerned about their cash hence the prioritising their security over the floating charge. Also. although the security is over a ‘catering contract’, I suspect there might be a whole lot more to it than that-match day hospitality, tickets etc. Having had a quick google of Close Leasing Limited they are associated with ‘specialist’ lenders. Definitely a well that Whyte has been going to for cash I would say.

    Q)

    So this answers the question, who is drip feeding Rangers money?

    If so for me the immediate questions spring to mind….

    Why is CWMBB interested in creating new creditors at the expense of the old ones?

    What is he gaining by delaying Admin?”

    A)

    The first bit of that answer is that he needs working capital to keep going. The second part is not so clear-why keep going?

    I’m inclined to say this-the tax case. The tax case was always the real jackpot for Whyte were he to win it. He has spoken about the possibility of not appealing. I think he is going to take a punt at it and if he somehow wins it then it is a huge result for him financially. Also, if he doesn’t take it on then he faces the difficulties we have all been speculating about concerning phoenix hvns, penalties etc.

    I’m guessing this might be the answer but am happy to be shot down in flames.

    *End*

  47. If RFC assets have been transferred to Liberty Capital,does this mean Wavetower have been bypassed and are no longer calling the shotsAlso,is Ellis not a director of Liberty Capital?.If he is,does this give him control over RFC property,which I think he’s always wanted?.

  48. Davie b says:

    Sorry, I do not agree with the suggestions above. Close had already advanced money about 2 months ago. Nobody in their right mind would lend at the moment even at high rates of interest and with a standard security over the property. CW has control over the process, he is not going to let someone get their hands on anything that he can get. This suggests that Close have realised that they will get shafted as an unsecured creditor and have taken steps to protect themselves. We need to know what the fixed security is over – could it be a lawyers client account?

  49. Hugh McEwan says:

    Torrevieja Johnbhoy says:
    02/11/2011 at 9:24 am
    —————————————-

    Wavetower is, as I understand it, wholly owned by Liberty Capital anyway. Craig Whyte claims that Liberty Capital is wholly owned by him.

    So “control” hasn’t really moved. Wavetower were only ever a buffer.

  50. yossery says:

    Should be self explanatory.

    The Rangers FC Group was incorporated on 17 September 2010 under the name of Wavetower
    Limited for the purpose of the Acquisition. On 12 May 2011, Wavetower Limited changed its name to
    The Rangers FC Group Limited. The directors of The Rangers FC Group are Phil Betts, Andrew Ellis
    and me. Pursuant to the Acquisition, Phil Betts and I have been appointed as directors of the Club.
    Further details regarding Phil Betts, Andrew Ellis and me are set out in Part IV of this document.
    The Rangers FC Group is wholly owned by Liberty Capital Limited (“Liberty”), a company
    incorporated in the British Virgin Islands. Liberty is wholly owned by me. The Rangers FC Group has
    not traded since incorporation other than in connection with the Acquisition and has not produced
    audited financial information. The Rangers FC Group has called up share capital of £1.
    The Rangers FC Group acquired its shares in the Club from Murray MHL Limited (the “Vendor”) on 6
    May 2011.

    Close leasing there is a name to conjure with, interests in ticketing as well just like someone else we know what a coincidence, wouldn’t be the first time they have done business together.

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