Rangers owner Craig Whyte accused over 'unreliable' evidence in court battle.

[BrahimHemdani 1]

Seems like I am bashing you this evening BH.... that is definitely not the intention, hope you understand that

 

Feel free most people do!

 

Maybe I just dont understand financing procedures - but I have always thought that in order to borrow money (certainly from reputable financial institutions) that you had to, somewhere, have the capital to support the borrowings.

 

That's pretty much the case; generally you need to be able to demonstrate two things:

 

1. The ability to repay.
    
   
2. Collateral security in the form of some kind of tangible asset, such as unemcumbered heritable property i.e. property with no other loans secured on it and to which you have good title i.e. there is no dispute that you own it. The security could take the form of some other valuable asset such as paintings or government bonds.
   

 

However, it isn't always the case that you need to have security and oftentimes the more you want to borrow the less security it seems you might need to put up. Sometimes a good business plan will do just as well. It depends on who is lending the money and their attitude to risk.

 

"Reputable financial institutions" aren't always that careful with their depositors money as has been amply demonstrated in recent years and not all lenders are "reputable financial institutions".

[BrahimHemdani 1]

Assuming, of course, said debts are legitimate and reasonably charged for the required services rendered.

 

Agreed.

 

But in the cases of the pensions and tax advice it was agreed I think that the fees were legitimate and only the flimsiest of excuses for failure to pay before the pursuers went to court.

[craig 5,199]

Feel free most people do!

 

I would like to think not. You certainly are a welcomed poster around here. I wasnt bashing you BH, just seemed every post I made last night was disagreeing with you....

 

That's pretty much the case; generally you need to be able to demonstrate two things:

 

1. The ability to repay.
    
   
2. Collateral security in the form of some kind of tangible asset, such as unemcumbered heritable property i.e. property with no other loans secured on it and to which you have good title i.e. there is no dispute that you own it. The security could take the form of some other valuable asset such as paintings or government bonds.
   

 

However, it isn't always the case that you need to have security and oftentimes the more you want to borrow the less security it seems you might need to put up. Sometimes a good business plan will do just as well. It depends on who is lending the money and their attitude to risk.

 

"Reputable financial institutions" aren't always that careful with their depositors money as has been amply demonstrated in recent years and not all lenders are "reputable financial institutions".

 

That is exactly my knowledge of obtaining finance from most places, other than loan sharks...

 

That being the case, and assuming that Whyte used one of the more reputable financiers, you would expect that he somehow showed that he had that ability to repay or some form of tangible asset to collateralise the debt.

 

I am possibly being naive but I cant see any banks providing the financing given how high profile Lloyds became and how public it was that they wanted out. Add to that the fact that football clubs are very, very rarely profitable as an organisation on their own and rely heavily on financial benefactors. It must have been one hell of a business plan for someone to take a risk on providing the finance needed to get the club in the first place, especially knowing that there was the debt to be cleared (how much was that again ?), a potential tax liability (which surely would have had an obligation to be brought to the financiers attention) and then if the business plan were to be subsidised further funding necessary there.

 

Again, I might be naive but that seems like a hell of a risk to me for a potential funding partner.

[BrahimHemdani 1]

I would like to think not. You certainly are a welcomed poster around here. I wasnt bashing you BH, just seemed every post I made last night was disagreeing with you....

 

No problem, I appreciate your concern and my comment wasn't really directed at you, just a general feeling based on a couple of recent comments on here but mostly non Gersnet events

 

That is exactly my knowledge of obtaining finance from most places, other than loan sharks...........assuming that Whyte used one of the more reputable financiers, you would expect that he somehow showed that he had that ability to repay or some form of tangible asset to collateralise the debt.

 

You are making that assumption, I couldn't possibly comment.

 

I am possibly being naive but I cant see any banks providing the financing given how high profile Lloyds became and how public it was that they wanted out.

 

You are certainly not being naive, you may be a lot closer to the truth than you care to imagine.

 

Add to that the fact that football clubs are very, very rarely profitable as an organisation on their own and rely heavily on financial benefactors. It must have been one hell of a business plan for someone to take a risk on providing the finance needed to get the club in the first place, especially knowing that there was the debt to be cleared (how much was that again ?), a potential tax liability (which surely would have had an obligation to be brought to the financiers attention) and then if the business plan were to be subsidised further funding necessary there.

 

Again, I might be naive but that seems like a hell of a risk to me for a potential funding partner.

 

One thing I can tell you is it wasn't Lloyds Bank just shifting the loan offshore and as you say which bank would take that debt off LBG?

[Zappa 0]

I can't see a company going to the expense of a court case where they may or may not be awarded costs just for the publicity.

 

Especially when there's an element of negative publicity involved because the fact that they're having to go to court over this sends out a message to others that there's always a chance you could get away with not paying a large bill... or at least delaying beyond a reasonable point via various tactics.

[craig 5,199]

Especially when there's an element of negative publicity involved because the fact that they're having to go to court over this sends out a message to others that there's always a chance you could get away with not paying a large bill... or at least delaying beyond a reasonable point via various tactics.

 

That can play both ways Zappa, could just as easily be that nobody would want to try to screw them over as they are more than prepared to take it through the legal system.

[Zappa 0]

That can play both ways Zappa, could just as easily be that nobody would want to try to screw them over as they are more than prepared to take it through the legal system.

 

Exactly, but the publicity generated from taking the owner of Rangers to court has another negative aspect, in that the company could lose the business of Rangers fans who hear or read about it. You could argue that the company might generate some business from the publicity, but that would be a gamble in terms of business lost v business gained.

 

All I'm saying is that publicity such as this isn't always good publicity or good for the company chasing the debt.

[BrahimHemdani 1]

Exactly, but the publicity generated from taking the owner of Rangers to court has another negative aspect, in that the company could lose the business of Rangers fans who hear or read about it. You could argue that the company might generate some business from the publicity, but that would be a gamble in terms of business lost v business gained.

 

All I'm saying is that publicity such as this isn't always good publicity or good for the company chasing the debt.

 

Which is exactly why I don't think any company would want to do that unless they felt that they had no alternative.