Wings Over Scotland

This select gathering is all the Scottish Conservative conference delegates who were interested in discussing the party’s approach to devolving more powers to the Scottish Parliament in the event of a No vote in the independence referendum of 2014.

Readers far more cynical than ourselves may find the picture a useful gauge by which to measure the true degree of interest the Tories have in more powers.

A possible watershed: Annan Athletic have declared their opposition to admitting Sevco Scotland FC (change of name pending) to Division 1 of the Scottish Football League. By our calculations, that means that the Charles Green-owned company can NOT now obtain the 15 votes it needs to secure admission – 14 clubs are opposed, two have declared in favour, two are abstaining and 12 have not made their position known, leaving Sevco with a maximum of 14 votes.

Much water remains to pass under the bridge before Friday’s meeting, of course. The SFA, SPL and SFL might yet pull some desperate new trick with the rulebook, or increase their bribes to the lower-league clubs enough to turn some heads. But at the present moment in time, Sevco FC will be playing – at best – in SFL3 next season.

We got an annoyed comment yesterday from a reader about the number of articles we’ve written on the Rangers fiasco. Only a tiny (fingers-of-one-hand) number of readers have ever objected to the football pieces, but we don’t want that number to grow, so we’re just going to put this here for future reference.

There’s a whole raft of reasons why the “crisis” at Ibrox is relevant to a Scottish political blog. As we’ve touched on before, we believe that were New Rangers to either disappear entirely or become a greatly-reduced force in football over the next two years, it could be a game-changer in the independence campaign. The parallel that could be drawn if the game survived in a healthy state bereft of the big Union Jack-waving institution everyone said we couldn’t do without would be pretty obvious.

Secondly, there’s no point pretending that Rangers stories don’t draw in a wider audience to the blog, from right across Scotland, exposing people to its core content who’d otherwise never see it. We’re not here to preach to the converted, that’s a waste of time. We have to speak to people who have no political axe to grind and may not have made up their minds about independence yet, and anything that puts more eyes on pages is a positive.

The third reason, though, is something much more personal.

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If you’re anything like us, you’ll have been frustrated by most media coverage of the Rangers liquidation saga, and in particularly the failure of journalists to ask the questions that ordinary people are asking over and over again on Twitter and internet messageboards, or just shouting at the telly.

So we were hugely impressed when professional insolvency practitioner Maureen Leslie of MLM Solutions, who has recently appeared on both Newsnight Scotland and Reporting Scotland in connection with the Rangers case, held an online Q&A on the subject today (along with the company’s senior manager Allan McLeod), devoting over an hour of her valuable time to answering questions from clueless members of the public such as ourselves.

Below is an edited transcript of the proceedings (leaving out questions that were outwith MLM’s expertise). We haven’t changed the content of any questions or answers, but have corrected typos, occasionally made slight adjustments to wording for clarity, and grouped questions on the same aspects of the situation together. (Suspicious readers can view the original unedited webchat in full here.) We hope you’ll find it as informative and enlightening a resource as we do.

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The fallout from HMRC’s rejection of the Rangers CVA has, of course, only just begun. Journalists and bloggers, us included, will be spending a considerable amount of time speculating wildly about the likely outcome of the club’s now-inevitable liquidation. So let’s quickly take stock of what’s fact and what’s guesswork.

(Please bear in mind that Wings Over Scotland is not a lawyer, and that your house may be at risk if you don’t pay tax on it for 20 years.)

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Rangers Football Club, formed in 1872, will formally cease to exist later this week. In a surprise development (in terms of its timing, not its content), HMRC have officially stated that they will reject the club’s proposed Company Voluntary Arrangement at the creditors’ meeting scheduled to take place this coming Thursday, June 14. The news was confirmed when the club’s administrators Duff & Phelps issued a press release stating their intention to go ahead with a plan to sell Rangers FC’s assets to a consortium led by businessman Charles Green for £5.5m.

There is, however, a great deal of debate about whether such  plan can go ahead. A fascinating blog by Scottish lawyer Paul McConville last week observed that HMRC had already put in place its own preferred liquidators should the CVA proposal be rejected, and it’s hard to see how Duff & Phelps can go ahead with the asset sale in the event of a legal challenge from creditors. Since HMRC has rejected the CVA and has its chosen liquidators standing ready, it seems highly likely that it, or some other creditor/s, would mount such a challenge.

There can be little doubt that the assets of Rangers FC – the playing staff and property portfolio, including Ibrox Stadium and Murray Park – ought to be able to realise significantly more than the £5.5m Green is offering. (Since the money Green proposed to use to buy the club with was in the form of a loan to be recouped from the survival and continued trading of the club, it’s also uncertain whether it’s actually on the table in any real sense.)

Even if the players’s contracts are held to be voided by the liquidation of the club (also the subject of debate) and they can move on without any transfer fees, it’s difficult to see how the property alone, even allowing for its partially- listed status, could fail to be worth at least double the supposed sale price, and the liquidators will be duty-bound to maximise the returns for creditors by at least opening the sale process up to competing bids, including those not seeking to use the property for football purposes.

Duff & Phelps and Charles Green have both insisted that despite liquidation Rangers Football Club will survive, under the same name, and continue to play at Ibrox. Such claims, stated by both parties as certainties, seem to lack any credibility. Further intriguing developments, we’re sure, are not far away.

There’s a famous scene in the first Indiana Jones film where our hero, faced with a swordsman performing an elaborate duelling ritual prior to an anticipated bout of formal combat, simply pulls out a gun and wearily shoots him. (Inspired, no doubt, by the legend of the Gordian Knot.) We’re feeling a bit like that this morning as we peer into the bewildering, constantly-shifting looking-glass that is the affairs of Rangers FC.

Either of yesterday’s events would have been enough to try to untangle by itself, but the two smashed head-on into each other and created a grisly heap of tortured, twisted, smoking metal that’d take half a Scottish fire brigade all day to separate into identifiable components, and with about the same chance of anyone walking away intact. But we’re so stupid we’re going to have a go by ourselves. Read on, if you dare.

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Well, it’s safe to say it’s all kicked off big-time today, with not one but two massive developments in the Neverending (Rangers) Story. Firstly, you can read the entire CVA document for yourself here. But these are the bullet points:

1. The £8.5m Charles Green and his consortium (“Sevco”) intend to fund their purchase of Rangers with is in fact a loan, to be paid back (with interest) by 2020 [Section 4.20], despite Green’s previous pledge to run the club “debt-free”.

2. According to the BBC, Duff & Phelps’ fees during the period of administration to date are £5.5m, leaving just £3m in the pot for the creditors.

3. Highly unusually, the proposal doesn’t actually specify a percentage creditors will be paid. But Rangers’ current debts are in the region of £55m, meaning the maximum payout to unsecured creditors will be slightly over 5p in the £. The actual figure is impossible to gauge, as the CVA proposal document is full of unknown sums marked “TBC”, such as the amount owed to Craig Whyte. [Schedule 8]

4. Should Rangers lose the Big Tax Case the debt will at least double, but is widely thought likely to increase by even more, taking the total to around £150m. This would reduce the maximum payout to unsecured creditors to 2p in the £.

5. Should the CVA be rejected by creditors, Green has a contractual obligation to purchase the club’s assets for £5.5m (presumably again in the form of a loan, though this isn’t explicitly specified) and liquidate it, saving himself £3m. [Section 4.23] By coincidence the purchase price is exactly the sum quoted by the BBC for Duff & Phelps’ fees, leaving precisely £0 in the pot for creditors.

6. The creditors therefore have a choice between accepting a maximum of 5p in the £ (but likely much less than that), or getting nothing at all.

More coming as we unravel it. All we can say is that in a world where Robert Mugabe is about to be made a UN tourism ambassador and the head of the IMF doesn’t pay any tax, the notion of a bankrupt football club with £50m of unpayable debt and up to £100m more hanging over it BORROWING the money to pay off its creditors – by offering them an unspecified amount somewhere between almost zero and actually zero and expecting them to willingly agree to the deal even when one of them is the nation’s taxman – suddenly doesn’t seem all that insane by comparison.

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Scottish politics seems to be having a wee holiday this week. The First Minister has a little chat with the Scottish Secretary over the referendum, deciding nothing, the Unionists demand “answers” to questions on a completely different subject, Jim Sillars witters on about something or other in yet another bitter rage about how well the SNP’s doing without him, and the Scotsman quietly admits that some of its previous scare stories (this time the ones about Scottish membership of the EU) were cobblers and hopes nobody notices. In other words, business as usual.

The reason everyone’s putting out a skeleton service operating on auto-pilot is, of course, that they’re all transfixed with the goings-on at Ibrox. And rightly so, because it’s an enormous story which reaches out and touches the entire population in a way that politics almost never does.

For fans of Rangers, their entire world has fallen in. For fans of other clubs it’s either hilarious, or a time for rising above petty rivalries and showing solidarity with their fellow supporters, ie it’s secretly hilarious. For Rangers employees it’s a worry, for battered wives, social services and hard-pressed A&E staff it’s a blessing and for booze retailers it’s a catastrophe.

We also can’t ignore the possible political consequences. For decades Rangers FC has served as a weekly indoctrination service for the defenders of the Union – you can’t spend a large proportion of your leisure time waving Union Jacks and singing “Rule Britannia” with thousands of fellow loyal subjects of Her Majesty (she of the Revenue and Customs) without it having some sort of effect on your worldview.

But for the media, which for months on end has largely turned a blind eye to the scale of Rangers’ problems and left the blogosphere to pick up the slack, it’s a time of panic. If Rangers fall they’ll probably take half the circulation (and pagecount) of the Daily Record with them, and the tabloid media in general is desperate for the club to survive in something as close to its present form as possible.

So the story, told loudly and relentlessly, is that Scottish football couldn’t live by Celtic alone. Rangers, it’s insisted over and over, are vital to the continued health – nay, the very survival – of the domestic game.

Their friendly, loveable fans, we hear, are the lifeblood of every other club in the league as they turn up twice a season to swell the stands and consume the Scotch pies and Bovril that pay the wages of the home side’s gangly centre-half. The TV riches that pour into SPL coffers would vanish too, without the juicy prize of four Old Firm games a year to tempt Sky into opening their gold-plated chequebook. All in all, take Rangers away and you might as well padlock the turnstiles from Inverness Caley Thistle to Queen Of The South and call it a day.

But is it true? No. It’s a load of balls.

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We must admit, we don’t quite get what the Daily Record is trying to achieve.

Having already told its dwindling band of readers that voting for both the SNP and Labour is the only way to stop Reform in today’s Hamilton by-election, for the last two days it’s deployed some random loony in a hard hat and the vegan former Rangers captain Graeme Souness to the same ostensible end.

Souness, famously a supporter of Margaret Thatcher and the Conservatives, tells Record readers today that they must vote Labour in order to prevent Thatcher’s right-wing heirs from winning the seat – even though Labour are dead, plucked, stuffed and cooked geese in the eyes of the bookmakers and voting for them only increases the chances of both Reform AND the SNP.

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There comes a point when even the most liberal and tolerant have to ask questions.

The above clip comes from a 2022 fundraising dinner celebrating the 75th anniversary of Pakistan’s independence. But Anas Sarwar seems to want to take things a little bit further than that.

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You’ve got to admit, that’s a zinger.

Craig Whyte is a man who knows all about financial doom looming on the horizon of a once-powerful institution. But it doesn’t take an expert with lived experience to spot what’s coming down the line for the SNP.

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