Ex-Rangers administrators David Whitehouse and Paul Clark in £21m settlement

[RANGERRAB 3,680]

32 minutes ago, Bluedell said:

Was it not 8 or 9 months? That's fairly sizeable.

 

However it could be the EBTs he was referring to but as the case was still going through the courts at that point, and whether tax was actually due had still to be finally established, his use of "non-compliance" doesn't stack up for me, although he could be using that word to put a spin on it.

As I said earlier, it was to allow the debt to build up to allow HMRC to block a CVA

[Uilleam 5,948]

2 hours ago, Bluedell said:

Was it not 8 or 9 months? That's fairly sizeable.

 

However it could be the EBTs he was referring to but as the case was still going through the courts at that point, and whether tax was actually due had still to be finally established, his use of "non-compliance" doesn't stack up for me, although he could be using that word to put a spin on it.

Spin, deliberate obfuscation, diversion, none of which we should hear from the witness box. 

 

[Scott7 6,018]

1 minute ago, Uilleam said:

Spin, deliberate obfuscation, diversion, none of which we should hear from the witness box. 

 

Is that not the usual?

[Uilleam 5,948]

1 minute ago, Scott7 said:

Is that not the usual?

Ask your brief, McBrearty, QC.

[Blue Moon 1,300]

On 31/05/2021 at 13:59, Bill said:

I really don't know why we're skirting around this. The decisions taken at HMRC were taken by people, not machines, individuals with likes and dislikes, personal agendas and inherent bias. Every single important decision taken by HMRC in this affair was a value judgement and could just as easily have been completely different. Nothing that HMRC did was inevitable. There were choices and the decisions taken were exercised by individual people. No one will ever persuade me that a significant part of those decisions wasn't a visceral hatred of Rangers or what it was perceived Rangers stood for. 

 

It was a stitch-up and officials at HMRC were at the heart of it. 

I believe you are 100% correct.

[Uilleam 5,948]

Here's a report from the Herald.

 

"Judge starts 'same club' debate as experts argue over whether Rangers fans would support another team"

 

There's a lot of discussion around "the Brand" (and not the Ralph Brand), as BDO seeks to establish that Duff & Phelps sold Rangers on the cheap. 

 

Personally, I don't think that enough is made of what used to be called "good will", which is more than just possession of the Trademark(s) and other intellectual property.

Apart from which, I find the whole debate around the "Company Limited" less than helpful; if everything depends on the existence of this (or a PLC), then it is unclear -at best- what happened, and what the status of the Club was, between 1872 and 1889 (?) when a Company was established to run the Club's affairs, and to raise capital.

 

Generally, however, if pressed, I ask,

"If I, or a company I own, buys The Horseshoe Bar tomorrow, is it still The Horseshoe Bar?"

 

 

Judge starts 'same club' debate as experts argue over whether Rangers fans would support another team

Exclusive by Martin Williams  @MWilliamsHTSenior News Reporter

EXCLUSIVE

 

https://www.heraldscotland.com/news/19346156.judge-starts-same-club-debate-experts-argue-whether-rangers-fans-support-another-team/

 

A JUDGE entered into a debate over the value of the Rangers brand as he questioned an expert over whether he had underestimated the importance of the club name.

Lord Tyre entered into a 'same club' court discussion as experts argued whether fans would happily have supported a team similar to Rangers but under a different name such as the Glasgow Blues.

It came as one brand expert criticised Rangers administrators in charge of the club when it financially imploded for a failure to proactively sell its assets including the Rangers brand.

Thayne Forbes, an intellectual property expert, made the criticism as it emerged that the financial experts who took control of the club when it became insolvent in February, 2012, did not get a valuation for the brand, which includes the ability to use the Rangers name, trademarks and logos for financial gain, and is used in all its merchandising.

The Court of Session has previously heard that it was effectively sold for nothing when it was valued at being between £16m and £20m.

 

The questions over the value of Rangers' brand came as BDO, the liquidators of the Rangers oldco sue the joint administrators of the club Paul Clark and David Whitehouse for £56.8m saying a flawed cost-cutting strategy meant creditors lost millions from the handling of the club’s financial implosion.

Part of BDO's argument is that the administrators should have had a brand evaluation before selling the assets of Rangers to the Charles Green-fronted Sevco consortium for £5.5m in June, 2012.

Mr Whitehouse and Clark are defending the action in the Court of Session claiming the liquidators expected a “bonkers” strategy of a ‘fire sale’ of Rangers which would have “effectively shut the club down for good”.

The case comes nine years after the Craig Whyte-controlled Rangers business fell into administration and then liquidation leaving thousands of unsecured creditors out of pocket, including more than 6000 loyal fans who bought £7.7m worth of debenture seats at Ibrox.

  

Administrators have admitted that they failed to get a valuation of the club brand and an assessment carried out by an independent finance expert on the day of the Sevco purchase and commissioned by the new owners put the value of the brand alone at £16m.

But Andrew Wynn, an intellectual property expert for the administrators said the valuation that had been put on the brand was unreliable and it could not be assumed that fans would naturally follow and spend money on any entity that was simply called Rangers.

 

Lord Tyre entered the discussion after Kenny McBrearty QC for BDO asked if Mr Wynn agreed that if the club had been called the Glasgow Blues, fans would no longer have the history of following a club that had been founded in 1872.

"I don't agree with that," said Mr Wynn. "I don't think that you secure the brand, then that gives you the ability for people to perceive it as the successor club. Conversely, if you don't have the brand I don't think it's impossible that people wouldn't consider that to be the successor club, you know, it's just so imponderable."

Mr McBrearty added: " If you have the name Rangers and you carry with it the history and the heritage, then you carry with it, for example 54 league titles [now 55], and a European Cup Winners Cup, and all of the club legends like John Greig and Bill Struth that don't belong to Glasgow Blues. It seems to me that those are utterly essential to the following of Rangers and the Rangers brand rather than the Glasgow Blues."

Mr Wynn replied: "So what I would agree with is, what is valuable is for your club to be considered to be Rangers or the true successor to Rangers. My point is that it's not at all clear to me that acquiring the legal rights to the Rangers trademark are the thing which give you the key to being considered the true successor club."

 

Lord Tyre then questioned whether Mr Wynn had a grasp of the recent history involving the Old Firm.

He said: "I wonder whether you're aware of some of the fallout from the Rangers debacle, particularly in relation to the attitude taken to Celtic fans who to this day will, in order to wind up the Rangers fans, argue that it's not the same club. "And they will still refer to the club which won the league championship this year as Sevco. And I mean that's just a fact of life in Glasgow. It's an unusual place when it comes to football loyalties. And it's against that background, that I really do wonder whether you are undrestimating the importance of the Rangers name when it comes to the continuing club."

Mr Wynn replied saying that you cannot put a reliable figure on how much having the ownership of the name of Rangers was worth.

"I do not think that I'm underestimating the importance because I'm not saying that it would not have any plausible value. What I'm saying is that in the liquidation scenario, it's very difficult to assess what that value is," he said.

"And I'm trying to make a distinction between two things. So, there's believing that if I secure the trademark rights, I have the key, no-one can challenge me, I will be able to recreate the successor club. And I'm saying, one, there are no examples of that happening so we don't know what would happen, and two, I don't think we can conclude that it's the key. "

Mr McBrearty said: "I think the bit I'd have difficulty with is the idea that somehow or other, with some other rival successor club, the fan base might go with them rather than a club called Rangers.

"I mean, it might be encapsulated by thinking of, perhaps, Rangers most famous song and I'm trying to envisage the crowds at Ibrox singing, 'everywhere, anywhere we will follow on, follow follow, we will follow the Glasgow Blues'. I mean, this kind of thing transmits by the brand doesn it. It's the name of Rangers and the heritage that comes with that and the rivalry with Celtic and historically the manifestation of Protestantism, through the medium of football in the west of Scotland. I mean, it's all about the brand of Rangers."

Mr Wynn replied: "I think we're dealing with a subtlety here. So there's a difference between people wanting to call the club Rangers, with people being willing to pay sums of money to acquire the trademark rights. That assumes that buying the trademark rights alone gives us the ability, the unchallenged ability to set up a successor club."

 

Thayne Forbes, a brand expert for BDO insisted the Rangers brand was key, and suggested the administrators did not do enough to properly market the club before it was bought by Sevco.

He said there were 57 potential buyers for the club listed and 14 would-be buyers of the assets which he said seemed "extremely low".

"I would have expected a far greater level of interest with hundreds of potential buyers listed.

"In order to encourage a sale of the brand at a reasonable price and within a reasonable timeframe, I consider it would be necessary to describe the Rangers brand, highlighting its value and selling it in more detail than was given..."

He said there appeared to be a "reactive" approach " and based entirely on approaches made to Duff and Phelps".

He added: "I consider that a proactive approach should also have been made to approach potentially interested parties with a view to selling them the assets including the Rangers brand.

"Many of the replies noted that Duff and Phelps were seeking to sell on a going concern, and not a piecmeal basis. The sale process should not have been confined to this. Any offers on the potential buyers' preferred bases, should have been encouraged in order to generate as many options to sell as possible."

Earlier he said he believed hardly any fans would have switched allegiance had Sports Direct supremo Mike Ashley had control or the club. The Newcastle United owner went on to have a stranglehold on the club in 2014 through bailout loans and a 9% stake in the club.

Andrew Young QC for Mr Whitehouse and Mr Clark created a scenario where Mr Ashley could have bought the Rangers brand on its own, without the rest of the assets such as the players, Ibrox and Murray Park training ground, during liquidation with a view to resurrecting the club.

He said: "That might succeed if the fans follow him, but if for example the fans, for whatever reason didn't regard him as true Rangers man, whatever that means, they might be inclined to take their loyalty to another form of football club which seemed to more properly reflect the Rangers they knew. Is that not the risk that someone buying the brand has, that the fans will not follow the the brand as you anticipate?"

Mr Forbes said: "Not much of a risk, no, there were five million fans. I think some of them might have disagreed with certain potential aspects but I think that they would not switch their allegiance to another club."

Mr Young added: "Again, I'm not sure how you can say that, surely it depends on what the individual fans feel properly reflects their team going forward. And if they feel that the person who holds a brand, let's say person holding the brand is even a Celtic supporter they might well not feel that that was a team they wanted to follow anymore, and they would switch allegiance to some other form of a Rangers team even if it couldn't call itself Rangers.

"It doesn't follow that the fans will always follow that particular brand, if they do not feel that the new club properly reflects the old club."

 

Mr Forbes replied: "I just don't think that's right. The fans' allegiances to the Rangers football club, is allegiances to Rangers, that's the brand. And I don't think they're going to leave, or switch their allegiance really for any reason, even if some of them express some kind of dissatisfaction with an owner like Mike Ashley and Mike Ashley was a shareholder in Rangers at one point.

"I'm pretty sure that the fans, hardly any of the fans would have switched allegiance to Celtic for any reason, but particularly just because Mike Ashley was a shareholder someone who was seen as a bit of a controversial businessman and a bit of a vulture maybe."

 

Lord Tyre asked Mr Forbes: "So they set up a football club and they call it something else, say they call it, West Glasgow FC or something like that. And they employ a lot of the staff who were formerly employed by Rangers and they managed to get hold of a number of the ex-Rangers players. Let's say they get hold of some of the stars who were playing for Rangers at the time of administration and they apply successfully to re-enter one or other of the Scottish leagues. They may not be successful in getting into the SPL but they get into the Football League. Would that be a viable proposition without having acquired the Rangers brand?"

Mr Forbes said: "No, I don't think it would be viable because the brand is so important to the club, and so important to driving the revenue streams which you need to generate in order to meet the costs.

"So the main revenue streams that it drives are matchday tickets. I just don't think you would be able to get much attendance at all for a football match, put on at Ibrox even with some continuity of people if you couldn't call it Rangers."

[compo 7,055]

It's only a matter of time before Craig Whyte launches his claim for the ruination of his good name ????

[Bluedell 5,627]

6 minutes ago, Uilleam said:

Apart from which, I find the whole debate around the "Company Limited" less than helpful; if everything depends on the existence of this (or a PLC), then it is unclear -at best- what happened, and what the status of the Club was, between 1872 and 1889 (?) when a Company was established to run the Club's affairs, and to raise capital.

Totally agree. Rangers were unincorporated between 1872 and 1899. One company then ran the club between 1899 and 2012 and another company from 2012 onwards. 

 

Likewise Celtic. Celtic PLC was incorporated in 1897. Are people trying to argue that Celtic was formed in 1897 and not 1888?

 

However, the actual football club (the company that plays their games) is Celtic F.C Limited (formerly HMS (402) Ltd) which was formed in 2001. Was the current Celtic formed in 2001?

 

Or perhaps a football club is not tied to the corporate body that currently operates the club. It's not a difficult concept to understand but it seems that even educated lawyers struggle with the concept.

[der Berliner 3,749]

Back in the day, 2014, Keith Jackson whipped up this article. If true, it makes you wonder why Whyte, upon setting a foot on British soil, never mind the streets of Glasgow, was not snatched up by these tax-enforcers and HMRC looked on how, in a rather "unspectacular and not-that-well puplicized fashion", as the fraudster took over at Ibrox:

Quote

 

Ex-Rangers owner Craig Whyte was being chased by the taxman for £3.74m BEFORE he started his catastrophic reign at Ibrox

 

HMRC had instructed debt enforcers to chase Whyte with a bill for almost £4million and threaten him with bankruptcy in May 2011 - the same month that he bought Rangers.

SHARE

By

Keith Jackson

07:30, 5 AUG 2014

UPDATED07:39, 5 AUG 2014

 

THE taxman was chasing Craig Whyte for £3.7million before he took over Rangers.

HMRC focused on Whyte’s personal finances and made several failed attempts to get him to pay his dues before, during and after his catastrophic reign at Ibrox.

The taxman regarded Whyte as a “flight risk”, fearing he might flee the country without settling his huge tax bill.

Documents seen by the Record show:

 

* The authorities instructed debt enforcers to chase Whyte with a bill for almost £4million and threaten him with bankruptcy in May 2011, the same month that he bought Rangers.

* It was the culmination of a probe begun the previous year when the taxman learned Whyte had returned to the UK in 2005.

* Whyte was continually warned he was failing to submit satisfactory tax returns and risked being fined.

* He actually claimed at one stage to have a UK taxable worth of just £24 in accrued bank interest.

* Yet when he struck the notorious deal with Ticketus for funds to finance his Rangers takeover, he gave the firm a personal guarantee he was worth nearly £33million.

 

This “guarantee”, which was obtained by HMRC, helped them calculate Whyte’s £3,741,835.29 tax bill but he continued stalling tactics to avoid coughing up.

At the same time he was able to run up a further £15million in unpaid taxes and penalties during his nine months in charge of Rangers.

Whyte had bought Rangers for £1 from Sir David Murray in May 2011, while agreeing to wipe out the club’s £18million debts.

But on February 14, 2012, he made a legal move to have the Ibrox outfit placed into administration.

By then the club’s debt had rocketed to around £50million.

 

HMRC then rejected a Company Voluntary Arrangement, forcing the club’s owners to be liquidated in a move which also saw Rangers having to start again in the lowest tier of Scottish football.

 

David Murray has long blamed the taxman for the demise of Rangers, saying the spectre of the Big Tax Case – a potential bill of between £46m and £100million, hanging over the club forced his hand in selling up.

But a sizeable proportion of Rangers fans still hold Murray at least partly responsible for the club’s demise, arguing he should not have sold to Whyte, whose reputation had already been questioned.

Ultimately, Rangers won the Big Tax Case when a tribunal ruled Employee Benefit Trusts paid to players were in fact loans not subject to tax – and HMRC’s appeal against that judgment was rejected this year.

Fans remain furious at the taxman for bringing the case in the first place, and the latest documents from July 2012 obtained by the Record are unlikely to quell their anger.

They show HMRC began building their case against Whyte from the moment his proposed take over first hit the headlines in November 2010, six months before he was eventually handed the keys to Ibrox.

The paperwork from the taxman’s high net worth unit states: “HMRC became aware that Whyte had returned to live in the UK when the press carried stories in 2010 that he was potentially going to purchase Rangers Football Club plc.

“HMRC discovered that Whyte had been back in the UK since 2005. He did not notify HMRC of his return to the UK, nor did he complete tax returns.”

The documents go on to chronicle various atttempts by the taxman to force Whyte to detail his finances and warnings of fines he faces if he fails to comply.

In the absence of his co-operation, the tax office made their own calculations and issued Whyte with demands for £1million for the financial year 2006-07 and £1.2million for the following year.

Whyte did finally submitted some returns. But the documents note: “The returns contained entries in respect of net UK bank interest of £24 for 2006-07 and £491 for 2007-08.”

This pattern continues throughout the reports, until a damning revelation centring on Whyte’s takeover of Rangers when he secured funding from Ticketus to head off the club’s future debt in exchange for money from season ticket sales.

Presumably to convince Ticketus he was a genuine businessman, Whyte gave his own word that he was good for the investment, according to the HMRC documents.

They state: “The personal guarantee included a statement of Whyte’s net worth, signed by him, which showed he had net assets with a value of £32,956,843.”

This was the evdience HMRC needed to slap Whyte with the tax bill of £3,741,835.29 at the time of his takeover.

Just four days after he posed for pictures with the SPL trophy at Rugby Park following a thrilling last day climax to the league campaign, a letter was written to Whyte by HMRC’s higher debt manager detailing the claim and giving him seven days to pay in full.

Whyte was warned that a warrant would be served on him by a sheriff officer who would also provide him with a leaflet entitled Dealing with Debt to help him assess his options.

The letter continues: “If the debt remains unpaid, I will arrange to present a sequestration petition in your local sheriff court. The effect of this is that you are likely to be made bankrupt and a Trustee appointed to sell your assets and pay your creditors.”

Even then Whyte continued to stall, appealing to a tribunal against the judgment. As HMRC do not discuss private tax dealings, the outcome as yet remains unknown.

But the emergence of HMRC’s serious concerns about Whyte before his takeover prompted further anger among senior Rangers figures.

Alastair Johnston, Rangers chairman at the time, pleaded with Murray not to sell the club to Whyte. He was subsequently axed.

Presented with the revelations last night, he said: “On the back of this, I would welcome a full-scale, independent investigation into the actions of HMRC around the Rangers issue.”

Former director Paul Murray added: “I have always said that what has happened to Rangers has been nothing short of disgraceful.

“The club has been the victim of a fraud. A lot of people have made a lot of money at the club’s expense and it has to end.

“It is in the public interest to find out exactly what has happened and then to take action. Justice must be done and be seen to be done.”

 

https://www.dailyrecord.co.uk/sport/football/football-news/ex-rangers-owner-craig-whyte-being-3992415

 

Why did HMRC not act? For ... any action from them would have made Murray et al aware of Whyte`s background.

Edited June 3, 2021 by der Berliner

[der Berliner 3,749]

7 hours ago, Bluedell said:

Totally agree. Rangers were unincorporated between 1872 and 1899. One company then ran the club between 1899 and 2012 and another company from 2012 onwards. 

 

Likewise Celtic. Celtic PLC was incorporated in 1897. Are people trying to argue that Celtic was formed in 1897 and not 1888?

 

However, the actual football club (the company that plays their games) is Celtic F.C Limited (formerly HMS (402) Ltd) which was formed in 2001. Was the current Celtic formed in 2001?

 

Or perhaps a football club is not tied to the corporate body that currently operates the club. It's not a difficult concept to understand but it seems that even educated lawyers struggle with the concept.

Somewhat surprising, actually. A company does not play football games, a football club does. A company may very well "run" a football club, not least when it becomes too big to be handled by a chairman, a secretary and the tea lady, like East Fife* or the like for many many years.

 

*No disrespect to East Fife.