Borrow Borrow


The revelation that Craig Whyte’s Rangers is selling off more of the family silver to stay in business just a while longer answers a few questions about this puzzling situation.  It is now abundantly clear that Whyte’s tardiness in paying creditors is more than just a bad habit.  It is also clear that there are no vast pools of wealth on which Whyte can draw to keep Rangers on life support.

For those of us who have indulged in reading entrails to try to understand Whyte’s actions, it is becoming ever more clear that there is no plan.  Any semblance of a grand design evaporated into the Scandanavian air on 3 August when Rangers failed to qualify for the group stages of the Champions’ League.  Even the booby-prize of Europa League qualification would not have come close to filling the chasm in Rangers finances that opened that night.

With records released on the Companies House website confirming that Rangers have given a fixed charge security over their assets to an English finance company called Close Brothers, it is clear that Whyte is selling the family silver in return for delaying insolvency.  The news that Rangers came within a few hours of having a winding up petition approved against them yesterday is quite remarkable.  That Whyte has had to resort to the desperate end of the corporate finance spectrum shows how close to the edge things have become.

We do not know how much has been borrowed.  Therefore, we do not know if this was just a small amount of funding that keeps the wolf from the door for a few weeks or whether he has established the line of funding that will see Rangers through to the opening of the transfer window in December.  If Whyte’s negotiation tactics have improved since the summer, he might not over-price his sellable players again.  He might even attract an actual offer for Jelavic this time.  To ignore the transfer window and fund Rangers through to the First Tier Tribunal (Tax) returns its findings (possibly as late as March 2012), Whyte would need to have borrowed about £15m.  Only at this time could Whyte legitimately claim that insolvency was caused by the legacy tax issues rather than his inability to run Rangers.

Borrowing against Rangers’ assets now not only reduces Whyte’s prospects of making a profit on Rangers (as faint as they were), but this greatly complicates any insolvency filing.  The odds of a Rangers liquidation and a disorderly meltdown in insolvency have now risen from the fanciful hopes of dreaming Celtic supporters to something that needs to be given serious consideration.

Whyte seems to be either holding out hope of Rangers getting an against-the-odds result in its dispute with HMRC or is trapped in the ‘bargaining’ phase of grief: trading all he has for more time.  Until now, Whyte-watchers had to consider the possibility that the Motherwell-born-billionaire had a plan that would outfox everyone.  It looks increasingly clear that he has just been making it up as he is going along since the Malmo game.

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.

713 Responses to Borrow Borrow

  1. stunney says:

    Northbhoy posed a hypothesis thusly:

    ” If a large collective of interested and like-minded people with a large pool of knowledge cannot figure out what the MBB’s plan is, does that not expose the blatant possibility that there is now no plan?”

    In a previous life I have worked with two individuals, one of whom was diagnosed as being bipolar and suffering from a narcissistic personality disorder, the other of whom I strongly suspected of having the same conditions, both of whom were removed from their employed positions at my behest.

    My first and subsequent impressions of Lord Craigie of Motherwellborn have strongly reminded me of those two troubled chaos creators.

  2. Johnobhoyo says:

    Johnybhoy – it wasn’t him that was the cause for either of the tax bills – why should he pay them?

    If there is no big tax bill to pay after the FTT then he gets RFC for a quid. Not a bad deal and as part of that he’ll pay the wee tax bill.

    Given dodgy dave’s lack of funds, the agreement MBB signed up to isn’t really worth the paper it’s written on – who is going to take MBB to court if he doesn’t fulfill his obligations?

    You’ve got a guy who is gambling on winning the FTT. If he gets a bad result in that he’ll have to throw in the towel. To be fair to him he’s never claimed he was an actual MBB – that was crap written by sycophants like Keith Jackson and Traynor. He’s also talked openly about there being an insolvency event of some form following the EBT result if they lose.

    Only a filthy rich oil sheikh would have enough dough to come into Ibrox and pay off a £50m+ tax bill that he had absolutely no part in, with only a team that plays in the SPL as reward.

    The real villains of this aren’t Whyte and his dodgy partners – it’s the previous regime who somehow managed to run up such massive debts and who have not paid a £2.4m tax bill as well as allegedly misusing the EBTs to the tune of £30m or so.

  3. droid says:

    update from Companies House has something been rumbled why dissolve then re-open then dissolve again? –

    Number Status Name Action/Event : Date
    07195195 D GLASGOW RANGERS (HOLDINGS) LIMITED Dissolved 18/03/2010
    07195195 D GLASGOW RANGERS (HOLDINGS) LIMITED Dissolved 08/11/2011

    https://wck2.companieshouse.gov.uk/771f8154ef4319c05eecc361fa8cb1dc/companysearch?disp=1&frfsh=1320437496#result

    Number Status Name Action/Event : Date

    07195584 D GLASGOW RANGERS (BUSINESS) CONSORTIUM LTD Dissolved 19/03/2010
    07195584 D GLASGOW RANGERS (BUSINESS) CONSORTIUM LTD Dissolved 08/11/2011

    https://wck2.companieshouse.gov.uk/771f8154ef4319c05eecc361fa8cb1dc/companysearch?disp=1&frfsh=1320437752#result

  4. Bhoyant says:

    Paulie Walnuts says:
    04/11/2011 at 8:07 pm

    Great to have someone who knows what they are talking about!

    One question you might be able to answer is why have an arrestment that lasts so long if it is agreed as being owed and due, could the court not just order them to pay it immediately?

    Ok, two questions, (I hope you don’t have your meter on!) If HMRC have to go back for this order to get why did they not just do it first time round?

  5. Jonnybhoy says:

    Paulie, I wonder when the exact date of the 14 weeks is up, Rangers have 2 home games in November and the glamour friendly against Hamburg, all money in the bank. Always assuming that they get decent crowds(above season books), and the appearance fee from Hamburg is paid on time

  6. PaulieW

    If I recall correctly, the HMRC arrestment was on 1 Sep. Following this logic, Whyte would have to file by the 8th of December to avoid forfeiting this cash permanently. Is that correct?

  7. Jonnybhoy says:

    Johnobhoyo, It’s Rangers’s bill always has been always will be and is due to be paid, as I said Scotland’s shame

  8. On the subject of what doesn’t Whyte pay the HMRC bill, we are of course trying to apply logic to someone whom we do not know well enough to know if he is rational.

    There is plenty of evidence to support a hypothesis that he is just pathologically against paying bills.

    This is going to stay interesting for a while.

  9. Stunney

    You have no idea how warm you are!

    There are rumours in circulation. None indicating something as strong as you have suggested, but questions have been raised about his ability to connect with people.

  10. Johnobhoyo says:

    Of course it is Jonybhoy – and MBB will pay the wee bill if he gets a decent result in the FTT.

    It makes absolutely no sense to pay it now. None at all. He won’t be able to pay £50m so why should he pay £52.4m?

    You can insult them until you are blue in the face, Auldheid can gibber until the cows come home about forfeiting championships, meanwhile back in the real world we will be 15 points behind them tomorrow evening and relying on HMRC to make us competitive again.

  11. Droid

    Both firms were my old friend Graham Duffy’s vehicles to take over Rangers. Why they needed to be dissolved twice I am not sure, but probably an admin error in the first attempts.

    Neither firm ever traded. They were just SPVs of Duffy’s Bahamian “empire”. I don’t see this as being significant to our discussions. Sideshow.

  12. Lord Wobbly says:

    Johnobhoyo says:
    04/11/2011 at 8:16 pm
    ~~~~~~~~~~~~~~~~~~
    CDubya came into this with his eyes open (or at least he should have given the lengthy due diligence). He has a business history that can best be described as not being in the best interests of others. I have no sympathy for him at all. None.

  13. droid says:

    Mark D your post has got me wonering if Willow International is the under the radar vehicle for Mr Whyte, Betts et al. It can’t be traced but they can freely trade with it, can anyone trace anything back from this group via British Virgin Islands to the Seychelles?

  14. Hugh McEwan says:

    Can I be a wee bit childish here and say that Mr Duffy is the classic “if a picture paints a thousand words”.

  15. Johnobhoyo says:

    Hugh McEwan – if memory serves that was when he and his family had been tossed out of house and home a few years ago.

  16. droid says:

    cheers RTC will drop the matter, what about the Willow International angle?

  17. Tommy says:

    andycol says:
    04/11/2011 at 8:05 pm

    __________________________________________

    I made a point the other day on the question of the forthcoming transfer window. Rather than clubs go shopping for replacements in the first weeks of the window it is normal that the vast majority of deals are done in the last couple of days or even hours of the window. Regardless of their ‘fire-sale’ circumstances, Rangers are going to have to sit out the month of January while the buying clubs (if any) play poker. The monthly wages at Ibrox are due on Thursday 26th or Friday 27th January, which is 4 or 5 days prior to the usual feverish activity taking place. Some posters on here assume that all will be well for Captain Whyte if his ship can limp into port on 1st January. I think we can dismiss Whyte having access to any transfer window money until at least a month or so later.

    Sooper Sally was interviewed on this evening’s STV sports slot. He commented that it’s looking good for Lafferty to sign a new (improved) contract and that he also hopes to strengthen the squad in the January window. Does Sally know something about the MBB’s plans that we don’t?

  18. Johnobhoyo says:

    Lord Wobbly – neither have I any sympathy for MBB. I’m just saying that it appears that all of a sudden he is the one to blame for RFC’s financial woes. He’s never promised to pay the big tax bill as far as I am aware, and short of throwing £50m+ down the swannee and paying the tax bills I don’t see him doing too much wrong as of yet.

    At this time I have yet to see a realistic scenario which would see him pocket too much from the demise of RFC via admin/receivership.

  19. Jonnybhoy says:

    Johnobhoyo – he is to blame for not paying the bill that is due, no promise was required

  20. Hugh McEwan says:

    Paulie Walnuts says:
    04/11/2011 at 8:07 pm

    ============================

    As a thought.

    HMRC want the FTT to run it’s course. Not to set a precedent, to have a written decision from the panel with regard to matters of law and what weight they put on evidence. FTT rulings go into a decent amount of detail with regard how they came to the decisions they did and their rationale with regard specific evidence.

    This will give HMRC SI a “ready reckoner” which they can then apply to subsequent cases. Safe in the knowledge that future panels are likely to think in a similar way to this one. Not a precedent per se but at least a good idea of how things are likely to go.

    This would provide them with more tools in their armoury to judge whether fighting an appeal is likely to succeed or not. Basically it gives their lawyers more to go on.

    As I said, just a thought.

  21. Johnobhoyo says:

    Johnnybhoy – do you think he should cough up £50m if the FTT finds in full favour of HMRC?

  22. Burton says:

    I was sitting here trying to estimate what the 6% per month for 90 days would cost ragers. It took me about 30 seconds to realise my mistake.

  23. Johnobhoyo says:

    Hugh McEwan – why go for the arrestment of the wee tax bill then? Why not just let RFC continue on their merry way until the FTT? Surely arresting those funds makes it more likely they will go under before the FTT comes to fruition?

  24. Jonnybhoy says:

    Johnobhoyo – If Rangers have the money at the time the FTT present Rangers with the big tax bill then Rangers should pay it – if they do not have the money they should be liquidated into oblivion as a warning to others who cheat the British Taxpayer

    And we will always remember Scotland’s Shame

  25. andy says:

    Johnobhoyo says:
    04/11/2011 at 8:33 pm
    Of course it is Jonybhoy – and MBB will pay the wee bill if he gets a decent result in the FTT.

    It makes absolutely no sense to pay it now. None at all. He won’t be able to pay £50m so why should he pay £52.4m?

    he wont get the result of the tax appeal before the money is released too HMRC

    so why not pay it now and save on the interest payments

  26. Hugh McEwan says:

    Johnobhoyo says:
    04/11/2011 at 8:46 pm

    Hugh McEwan – if memory serves that was when he and his family had been tossed out of house and home a few years ago.

    ——————————————————-

    It’s actually the photograph that the papers used when they were discussing his potential Rangers take-over.

    http://www.heraldscotland.com/news/home-news/millionaire-reveals-his-plan-to-save-rangers-from-ruin-1.987065

  27. Johnobhoyo says:

    Jonyboy – I get this picture of you and Auldheid sitting in a darkened room, both dubbed up in straight jackets giving it “Scotland’s shame….Scotland’s shame…..” No matter how many times you say it, it’s not going to change a thing. But if that is what gets you through the day then bully for you. I’d prefer not having to rely on an FTT to get us back on top but if that’s what it takes to keep them done then I’ll take it. But spare me this sactimonious pish I keep hearing.

  28. Lord Wobbly says:

    Johnobhoyo says:
    04/11/2011 at 8:50 pm
    ~~~~~~~~~~~~~~~~~~
    I guess it depends on your definition of wrong. He paid his money to buy the club so he should honour the debts and pay them timously. I’m betting he expects any money coming in to arrive on time.
    We’ve also seen him sign players on increased and extended contracts, only to turn around a couple of weeks later advocating that mistakes had been made during the window and the wage bill now had to be slashed.
    And his nonsensical rantings at the likes of the Herald and BBC are just laughable.

  29. Hugh McEwan says:

    Johnobhoyo says:
    04/11/2011 at 9:00 pm

    Hugh McEwan – why go for the arrestment of the wee tax bill then? Why not just let RFC continue on their merry way until the FTT? Surely arresting those funds makes it more likely they will go under before the FTT comes to fruition?

    —————————————————————

    And who would “put them under” prior to the FTT gives it’s ruling.

    Craig Whyte clearly doesn;t want to do it and HMRC don’t have to.

    So who else.

  30. easyJambo says:

    RTC – Are you in a position to confirm that date when the FTT will actaully resume. I seem to recall it being stated that there could be as little as a day’s evidence to hear. Will there be any recap of previous submissions, or final submissions to be heard from both sides that could delay the conclusion further?

  31. ClashCityRockers says:

    andy says:

    04/11/2011 at 9:01 pm

    Johnobhoyo says:
    04/11/2011 at 8:33 pm
    Of course it is Jonybhoy – and MBB will pay the wee bill if he gets a decent result in the FTT.
    ———————————————————————————————–

    If the arrestment on the wee bill expires in early December, and the result of the FTT(T) may not be known until Feb/March next year. Then CW has to pay the wee bill or fold shirley. He cannot be given more time to settle the wee bill, can he?

  32. Jonnybhoy says:

    Johnobhoyo – calm down dear, if you aren’t going to like the answers don’t ask the questions.

  33. Johnobhoyo says:

    andy says:
    04/11/2011 at 9:01 pm

    so why not pay it now and save on the interest payments

    ******************************************************************************************

    Because he knows there is a fair chance that the big tax bill will hit and then the game really is a bogey.

    You have two debts – one very big one due to crystallise in March the other smaller one due today. You know if the big one hits you are fecked – would you bother paying the small one due now knowing that in four months time you really will be introuble?

    Put differently, if he somehow gets a result in the FTT he’ll be delighted to pay an extra few grand interest/penalties yet get RFC for a quid.

  34. Johnobhoyo says:

    Ha Ha – johnybhoy. I’m calm. You are the one gibbering with your scotland’s shame pish almost ad infinitum. But as I said, if that’s what gets you through your day then keep on trucking.

  35. steve-b says:

    A quid plus 18m johnobhoyo have a read at what others are telling you wee tax bill will be recovered BEFORE FTTT result

  36. easyJambo

    Yes. I could confirm when it resumes. 🙂

    There are only 4 days scheduled (not all contiguous). It will be interesting to see if Thornhill has instructions to delay it again. (at this stage it might require an illness to have it delayed).

    I should have more info for you early next week. 😉

  37. Johnobhoyo says:

    Hugh McEwan – I also don’t believe MBB will put them under before any FTT ruling and I don’t see them going under until then.

    Back to my original point – if HMRC wanted the FTT to continue to it’s conclusion why would they jeopardise an early insolvency by giving MBB reason to pull the plug early?

  38. McCaig`s Tower says:

    A question:

    Suppose a player is sold in January for £5m to be paid in instalments of £1m a year.

    What happens if an insolvency event occurs – does the balance of the £5m become due immediately? Is it discounted for early payment? Or does the debtor continue to pay under the original schedule, but the payments are re-directed to other creditors?

  39. andy says:

    Johnobhoyo

    he is going to have the money taken from him for the small bill at the start of december well before the result so why pay the extra interest

    only reason for allowing rangers to pay extra interest is if he is keeping his options open about going into receivership before dec

  40. Jonnybhoy says:

    Johnobhoyo – well if they do manage to phoenix from the flames then they should never be allowed to forget that they truly are Scotland’s Shame and how they cheated the Tax Payer and Her Right Royal Majesty the Queens’ Revenue and Custom’s Service – Cheated the Troops and the Sick Kids (fully expect to see the players back at The Queen Mother’s this year for the annual Hypocrisy PR Event)

  41. Bhoyant says:

    Johnobhoyo says:
    04/11/2011 at 8:50 pm

    Everyone knows the decision of the previous regime to misuse EBT’s caused the big tax bill, but he knew he was taking the responsibility for paying the small tax bill.

    He has chosen not to pay it, simply it is morally wrong. There is no justification for refusing to pay it and it seems you are condoning that behaviour.

  42. Johnobhoyo says:

    Clashcityrocker – If I understood Paulie Walnuts correctly after the 90 odd days then that money would go to HMRC – MBB has no choice in the matter. His only option would be to pull the plug before then, in which case there would be legal wranglings as to who gets the money.

    It is likely that MBB seriously misjudged HMRCs strategy or didn’t understand all avenues open to them ie arrestment. He didn’t want to pay the wee tax bill, hoped he could get away with not paying until the FTT finished, but like his Champions League cash that has gone with the wind as well.

  43. AllWhyteOnTheNight says:

    McCaig’s Towers

    The amount would be due under the same terms and would be paid to the administrator to distribute to creditors.

    The administrator could do a deal for early settlement if that was the commercially best thing to do.

  44. Hugh McEwan says:

    Johnobhoyo says:
    04/11/2011 at 9:20 pm

    Hugh McEwan – I also don’t believe MBB will put them under before any FTT ruling and I don’t see them going under until then.

    Back to my original point – if HMRC wanted the FTT to continue to it’s conclusion why would they jeopardise an early insolvency by giving MBB reason to pull the plug early?

    ================================

    But he didn’t so it’s a non point, it didn’t happen. Decent try though, never let the facts get in the way.

    All HMRC want is for your club to pay the tax they owe. That’s all any of us want. Just pay it and the whole thing is done and dusted.

    Re the current, agreed bill. You have the money in a bank account, so HMRC arrested it. Perfectly reasonable response. They will get it in the fullness of time. That’s a given.

    Then they will move to wind up Rangers when they win at tribunal. That’s a given.

    It’s just a matter of time now.

  45. Johnobhoyo says:

    Of course he was took on the responsibility for the wee tax bill – I don’t condone what he has done and never said it was right – but I fully understand what his strategy has been and why he hasn’t paid it. Would mad vlad have paid all of his tax bills if HMRC hadn’t went down the winding-up route? I’ve yet to see him labelled “Lithuania’s shame”? Put another way – if HMRC had used a winding up order on the wee tax bill before the arrestment, it would have called MBB’s bluff big time. Would he have then shelled out or allowed liquidation to take place? Why didn’t HMRC use this strategy?

  46. Hugh McEwan says:

    Johnobhoyo says:
    04/11/2011 at 9:33 pm

    ==============================

    You really are reading too much follow follow nonsense.

    There is no bluff or game of poker. No who blinks first.

    This is business and HMRC will demand payment of what they win at tribunal (if anything). It’s that simple.

  47. Johnobhoyo says:

    Hugh McEwan – The point is that various observers believed that the chances of Whyte pulling the plug were increased due to the arrestment action – that does not square up with your theory that HMRC are wanting them to keep afloat to se the conclusion of FTT. Unfortunately guys like Phil Mac who claimed what they were saying were “facts” turned out to be spouting pish. I’ve yet to hear any explanation as to why Phil tweeted “RFC have ceased trading”, or words to those effect, last week.

    I think we can definitely agree on at least one thing – the FTT decision will be the time of reckoning for RFC. They’ll be able to continue pretty normally until then – possibly a Lafferty or Jelavic may be punted in January but nothing too substantial – and then it will all be down to the lawyers.

    I’d imagine that they’d then be able to plod on regardless of the FTT result until the end of this season at the very least. The close season should be very interesting.

  48. steve-b says:

    again Johnobhoyo go back and read PW’s post earlier it will explain all

  49. Hugh McEwan says:

    Johnobhoyo says:
    04/11/2011 at 9:42 pm

    Hugh McEwan – The point is that various observers believed that the chances of Whyte pulling the plug were increased due to the arrestment action

    ================================

    If you could provide links to that I would very much appreciate it.

    Simple stuff, show me where ” … various observers believed that the chances of Whyte pulling the plug were increased due to the arrestment action”

  50. Private Land says:

    rangerstaxcase says:

    04/11/2011 at 8:27 pm

    Stunney

    You have no idea how warm you are!

    There are rumours in circulation. None indicating something as strong as you have suggested, but questions have been raised about his ability to connect with people.
    _________________________________________________________________________

    I am wondering though if Stunney’s removal of these guys was used a as basis for Godfather III. Don is this an Old Aloysian conspiracy? (Opus Dei has nothing on them!)

    Seriously though, and drawing on my empirical experience as a schoolteacher, CW does strike one as being somewhat firmly on the Spectrum. The lack of eye contact, the perfunctory utterances sprinkled with bravado and lacking in any apparent empathy; and crucially, an inability to function rationally when plans go awry.

    Of course not necessarily sociopathic, but if correct, Rangers chairman is an ill-chosen career path for him.

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