Rangers: New Company - The Same Club

Table of Contents
About Rangers Football Club and The Rangers Football Club PLC Timeline - Administration Liquidation Newco Lord Nimmo Smith Excerpt from SPL Tribunal Lord Nimmo Smith Report September 2012 Lord Nimmo Smith i Scottish Law- Unincorporated Associations and Clubs Lord Nimmo Smith ii Lord Nimmo Smith iii Lord Glennie UEFAs view on Newco route for clubs UEFA Co-Efficient UEFA Official - Club and Company Separate UEFA Official On Timisoara UEFA SPL Round Up ECA (European Clubs Association) HMRC Duff & Phelps (Administrators) Duff & Phelps ii BDO (Liquidators) Neil Patey (Ernst & Young) SFA i SFA ii SFA iii SPL Articles of Association What is a club? SPL Chief Neil Doncaster SFL i SFL ii London Stock Exchange BBC Editorial Standards Committee Dermot Desmond Tom English/ECA BBC Editorial Standards Committee Advertising Standards Authority

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About Rangers Football Club and The Rangers Football Club PLC

It is incorrect to define the club as simply the company. See Scots law excerpt later. The club was founded in 1872. It became incorporated in 1899 and its corporate/legal identity was Rangers Football Club PLC. Until then Rangers and most other clubs were simply clubs and did not have to take on a legal form. In legal terms, it appears to us to be no different from any other undertaking which is capable of being carried on, bought and sold. This is not to say that a Club has legal personality, separate from and additional to the legal personality of its owner and operator. We are satisfied that it does not. Lord Nimmo Smith SPL Tribunal investigating Rangers When oldco went into liquidation it was claimed that 140 years of history were lost. The company did not have 140 years of history (2012-1899 = 113 years) the club did and the club still has.

Football History

1. Rangers Football Club was founded in 1872 as Rangers FC (the Club). 2. The Club is a professional association football club based in Glasgow and
member of the SFA (Scottish Football Association). 3. The Company is the legal trading entity of the Club. The Company was incorporated in 1899.The principal objective of the Company was to maintain the existence of the Club and promote a successful future for the Club by supporting a professional first team for business and social benefits.

Scottish Law Unincorporated Associations and Clubs http://www.scotland.gov.uk/Topics/Justice/law/damages/UnincorporatedAssociations andClubs Obviously examples of sports and social clubs, working men's clubs and "single issue" pressure groups. Although such clubs and societies are unlikely to be able to register as charities and are not normally eligible for membership of SCVO, they share the common characteristics of having defined, non-profit making objects but no separate legal personality.

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Timeline - Administration Liquidation Newco 14th February 2012 Rangers holding company enters Administration. Duff and Phelps are appointed as Administrators. 12th June 2012 -A CVA (Creditors Voluntary Agreement) offer of 8.5 million rejected by creditors. Rangers FC (the club) and other assets are sold out of Administration from oldco to a newco called Sevco Scotland Ltd for 5.5 million. Sevco Scotland Ltd. now owns the club and its assets such as the stadium, training ground etc and now legally change its name to trade on behalf of Rangers Football Club. http://local.stv.tv/glasgow/105837-rangers-liquidation-now-inevitable-after-cva-bid-rejectedby-hmrc/ 31st October 2012 The administration process having continued for 4 months since the sale of the football club and assets comes to an end. The oldco is then passed onto liquidators BDO its assets having been sold. http://www.bdo.uk.com/services/advisory/business-restructuring/rfc-2012-plc-formerly-rangersfootball-club-plc-liquidation

Present Oldco still in liquidation but not yet liquidated. Newco now operate Rangers Football Club. Note the timeline. The club were moved out of the holding company prior to the company (oldco) being placed into liquidation. At no point did Rangers Football Club cease to be or enter liquidation.

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Lord Nimmo Smith Excerpt

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Lord Nimmo Smith Report September 2012 http://www.scotprem.com/content/mediaassets/doc/SPL%20Commission%20reasons%20for %20decision%20of%2012%20September%202012.pdf

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Other Excerpts from the same report:

Page 2 there is no allegation that THE CURRENT OWNER AND OPERATOR OF THE CLUB, The Rangers Football Club Ltd. (Newco).... Page 4 On the 14th of June 2012 a newly incorporated company, Sevco Scotland Ltd., purchased substantially all the business and assets of Oldco, INCLUDING RANGERS FC Page 4 *Newco+ BECAME THE OPERATOR OF RANGERS FCwithin the Third Division of The Scottish Football League Page 5 Newco as the current owners and operators of RANGERS FC, although not alleged.......... Page 6 Rangers FC was liable to sanctions as provided by the Rules in event of a breach WHILE (RANGERS FC) WAS OWNED AND OPERATED BY OLDCO Page 6 ...capable of affecting Rangers FC AS A CONTINUING ENTITY now owned and operated by Newco Page 32 Oldco as a company, as distinct from the football management or players of Rangers FC as a club... Page 32 Rangers FC is of course OWNED AND OPERATED BY NEWCO Page 33 ...does not affect Rangers FC as a club UNDER ITS NEW OWNERSHIP

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Lord Nimmo Smith i - http://sport.stv.tv/football/clubs/r...ie-on-14-june/ Lord Nimmo Smith refers to newco and oldco throughout his lengthy report on the first stage of the hearing and also states that: "Newco is not and never has been a member of the SPL." But he adds: "In legal terms, it (a club) appears to us to be no different from any other undertaking which is capable of being carried on, bought and sold." Lord Nimmo Smith ii SPL Dual Contract Tribunal 28th February 2013 It will be recalled that in Article 2 "Club" is defined in terms of "the undertaking of an association football club", and in Rule I1 it is defined in terms of an association football club which is, for the time being, eligible to participate in the League, and includes the owner and operator of such Club. Taking these definitions together, the SPL and its members have provided, by contract, that a Club is an undertaking which is capable of being owned and operated. While it no doubt depends on individual circumstances what exactly is comprised in the undertaking of any particular Club, it would at the least comprise its name, the contracts with its players, its manager and other staff, and its ground, even though these may change from time to time. In common speech a Club is treated as a recognisable entity which is capable of being owned and operated, and which continues in existence despite its transfer to another owner and operator. In legal terms, it appears to us to be no different from any other undertaking which is capable of being carried on, bought and sold. This is not to say that a Club has legal personality, separate from and additional to the legal personality of its owner and operator. We are satisfied that it does not, and Mr McKenzie did not seek to argue otherwise. Lord Nimmo Smith iii - It is the club, not the owner, who plays in the league, he said. The rules clearly contemplate sanctions upon a club, in distinction to upon the owner or operator. That power must continue to apply, even if the owner at the time of [any] breach of rules has ceased to be a member of the SPL and its undertaking has passed to another owner or operator. Lord Glennie http://www.scotcourts.gov.uk/opinion...CSOH%2095.html [1] This is a petition for judicial review by the Rangers Football Club plc, a company presently in administration. That company presently operates Rangers Football Club (to whom I shall refer as "Rangers"). Rangers are members of the Scottish Football Association ("the SFA"), and are bound by the Articles of the SFA and by the Judicial Panel Protocol which sets out the disciplinary rules relating to the conduct of members of the SFA and the conduct of disciplinary proceedings to enforce such rules

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UEFAs view on Newco routes for clubs

Rangers were banned by UEFA from European competition for 3 seasons for failure to file unbroken accounts and a change to the clubs legal form and/or corporate structure i.e. going newco. Rangers were not banned for being a new club because they are not a new club. UEFA Co-Efficient - http://www.uefa.com/memberassociatio...lub/index.html

Note the same club are receiving national co-efficient points despite not being in Europe. +0.860 for season 2012/13 This figure will adjust as season progresses and Rangers ranking will fluctuate. Note: This is not concrete proof at this point as Unirea are defunct yet still receive co-efficient points from Romania and Derry City who were liquidated have recently had they co-effcient points mended by UEFA. Derry had to apply for a new membership with the FAI, Rangers had theirs transferred to a newco. UEFA may view Rangers differently.

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UEFA Further comment on newcos - http://www.scotsman.com/scotland-on-...case-11938625 If a club sets up a new company simply to avoid paying its debts or obligations then they would almost certainly fail the three-year rule, a spokesperson for UEFA told Scotland On Sunday. This is to ensure clubs do not simply create a newco and leave the previous entity in charge of dealing with debts. UEFA Statement on Timisoara - http://www.scotsman.com/scotland-on-...case-1-1938625 Following a failed appeal by Timisoara to the Court of Arbitration for Sport, UEFA made the following statement: Clubs are not allowed to change their legal form or structure in order to obtain a licence, simply by cleaning up their balance sheet while offloading debts thus harming creditors (including employees and social/tax authorities) as well as threatening the integrity of sporting competition. Any such alteration of a clubs legal form or structure is deemed to be an interruption to its membership of a UEFA member association and consequently three years must pass before a club can apply again for a UEFA licence. In other words, the three-year rule is designed basically to avoid circumvention of the club licensing system. Note: UEFA refer to clubs and companies individually. They do not seem to view clubs and companies as the same.

UEFA Website Celtic Win SPL - http://uk.uefa.com/memberassociation...wned+champions "It represents the Hoops' 44th league crown, leaving them ten behind rivals Rangers FC, who were absent from the top flight for the first time this season."

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ECA European Clubs Association - http://sport.stv.tv/football/clubs/r...nises-history/ "Taking into account that the 'new entity' also acquired the goodwill of the 'old entity', it was held by the ECA executive board that the goodwill, taking into account legal and practical arguments, also included the history of the 'old company'. "Consequently it was concluded that Rangers FC was entitled to associated membership of ECA as considered to be a founding member." Alike at Scottish FA level, this new entity had to re-apply for membership with ECA as according to Swiss law, membership of an association is neither heritable nor transferable (article 70.3 of the Swiss Civil Code). According to the prerequisites set out in the membership policy, Rangers FC did not meet the requirements to be granted ordinary membership (top division and European licence).

HMRC http://www.hmrc.gov.uk/news/rangers.htm Statement on Rangers Football Club "A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the companys financial affairs in recent years. A CVA would restrict the scope of such action. Moreover the liquidation route does not prejudice the proposed sale of the club. This sale can take place either through a CVA or a liquidation. So the sale is not being undermined, it simply takes a different route. Liquidation will enable a sale of the football assets to be made to a new company, thereby ensuring that football will continue at Ibrox. It also means that the new company will be free from claims or litigation in a way which would not be achievable with a CVA. Rangers can make a fresh start." Duff & Phelps i - http://local.stv.tv/glasgow/197765-r...legal-dispute/ As administrators, our primary function was to keep the business going and effect a sale of the Club in order that it could continue, while maximizing the return for the creditors. These objectives were achieved. It will now fall to the liquidators to realise any further potential funds that may go to creditors. We have worked closely with the liquidators over the last few months to ensure an orderly transition.

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Duff & Phelps ii - http://www.bbc.co.uk/sport/0/football/18413384 - video 2 mins 30s in The history of the club will remain with the club. The club moves from Rangers PLC into the new company and all of the titles and all of the 140 year history will remain with the football club. Malcolm Cohen BDO Liquidator http://www.bbc.co.uk/sport/0/football/18426943 "It's important to understand that the appointment of liquidators will not mean the end of football at Ibrox - only the end of the company that ran the club" Neil Patey Ernst & Young http://www.therangersstandard.co.uk/index.php/articles/current-affairs/244-grahamspiers-misquotes-neil-patey-on-bbc-radio My view is that it is like many other business acquisitions where the assets, people, trade and trading names are "acquired" by another entity. It is a new legal entity, but essentially the old business continues. So it is right to say that it is a newco in legal terms, but the "club" is a continuation of the old one. Then it is up to football authorities if they confer membership and titles that "belonged" to oldco, which they obviously appear to have done. SFA i http://www.scottishfa.co.uk/scottish...3&newsID=10204 How can Rangers be considered for membership when they can't provide four years financial statements? "Sevco Scotland Ltd bought Rangers Football Club PLCs share in the SPL and membership of the Scottish FA as part of their acquisition of assets. Under Article 14.1, Sevco Scotland are requesting the transfer of the existing membership of Oldco. This is different to an application for a new membership, which generally requires four years of financial statements. "

SFA ii -http://www.scottishfa.co.uk/scottish...3&newsID=10252 We have reached agreement on all terms and conditions attached to the transfer of membership and are able to grant conditional membership, ahead of the formal transfer of the SPL share a week today. We are pleased to confirm that agreement has been reached on all outstanding points relating to the transfer of the Scottish FA membership between Rangers FC (In Administration), and Sevco Scotland Ltd, who will be the new owners of The Rangers Football Club Stewart Regan Chief Executive SFA - There were a number of complex and challenging issues involved but, primarily, the Scottish FA had to be satisfied that the new owners of Rangers would operate in the best interests of the club, its fans and Scottish football in general.

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SFA iii http://www.scottishfa.co.uk/scottish_fa_news.cfm?page=3218&newsCategoryID=3&newsID=1 0287

The Scottish FA can confirm that The Rangers Football Club Ltd have today received confirmation that full membership of the Association has been transferred.

SPL Articles of Association What is a club? http://www.scotprem.com/content/mediaassets/doc/SPL%20Articles%20as%20at%2015Apr-10%20%28CURRENT%29.pdf Club means the undertaking of an association football club which is, for the time being, entitled, in accordance with the Rules, to participate in the League. SPL Chief Neil Doncaster - http://sport.stv.tv/football/clubs/r..._medium=twitte it is an existing club, even if it is a new company 1 minute into video

SFL 17/5/2013- http://www.scottishfootballleague.com/club/rangers/ Founded: 1872 54 Titles still there plus 1 division 3 title. Club Honours League Champions: Division I - 1890/91 (shared), 1898/99,1899/1900, 1900/01, 1901/02, 1910/11, 1911/12, 1912/13, 1917/18, 1919/20, 1920/21, 1922/23, 1923/24, 1924/25, 1926/27, 1927/28, 1928/29, 1929/30, 1930/31, 1932/33, 1933/34, 1934/35, 1936/37, 1938/39, 1946/47, 1948/49, 1949/50, 1952/53, 1955/56, 1956/57, 1958/59, 1960/61, 1962/63, 1963/64, 1974/75 Premier Division - 1975/76, 1977/78, 1986/87, 1988/89, 1989/90, 1990/91, 1991/92, 1992/93, 1993/94, 1994/95, 1995/96,1996/97 SPL - 1998/99, 1999/2000, 2002/03, 2004/05, 2008/09, 2009/10, 2010/11 Third Division - 2012/13

SFL ii http://s97.photobucket.com/user/VoodooRay/media/smilies/longmuir140_zpsb91faaca.png.html "To everyone involved in the club and its remarkable and loyal fans Happy 140 years Anniversary.

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London Stock Exchange - http://www.londonstockexchange.com/e...l?issueId=8816 Rangers International Football Club plc Description of business: Rangers International Football Club plc following admission will own and operate The Rangers Football Club Limited. Rangers Football Club, based in Scotland, has become one of the world's most successful clubs, having won 54 League titles, 33 Scottish Cups, 27 League Cups and the European Cup Winners' Cup in 1972. Playing at the 50,987 seater Ibrox Stadium, Scotland, and benefitting from the world class 37 acre Murray Park training facility, the club has been a dominant force in Scottish football for decades. The club generates revenues from match-day sales, broadcasting rights, retail and merchandising as well as other media rights.

BBC Editorial Standards Committee - http://www.bbc.co.uk/news/uk-scotland-glasgowwest-22951447 The BBC Trust has ruled that BBC Scotland breached its guidelines on accuracy in reports about the financial collapse of Rangers Football Club. In its ruling, the ESC said that where the BBC had made the distinction between an "old" and "new" Rangers, as opposed to the "old" and "new" company, it "had not used clear, precise language and due accuracy had not been achieved such that the guidelines on accuracy had been breached". Following publication of the Trust's findings, BBC Scotland said: "We note the findings of the report."

Dermot Desmond Celtic Majority Shareholder 4/10/2012 http://www.dailyrecord.co.uk/sport/f...-wants-1359461 Rangers is a fantastic club with a great history, he said. With the support that they have, they will come back. They will, in not too long a time, be back in the SPL. I have no doubt about that. Theyre needed for Scottish football because of their following and the size of the club and especially their history.

SFA Statement/Tom English - http://www.scotsman.com/scotland-on-...them-1-2734842 Last August, Michele Centenaro of the ECA contacted the SFA and asked for an appraisal of the Rangers situation and whether they could be deemed the same Rangers as before or a new company unworthy of acknowledgment from the ECA. The SFAs response was unambiguous. Different corporate entity but same Rangers, same history, same honours accrued over 140 years." 13 54 and counting...........

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Advertising Standards Authority Ruling - 12/6/2013 http://www.asa.org.uk/Rulings/Adjudications/2013/6/The-Rangers-Football-ClubLtd/SHP_ADJ_224406.aspx
ASA Adjudication on The Rangers Football Club Ltd The Rangers Football Club Ltd Ibrox Stadium 150 Edmiston Drive Glasgow G51 2XD Date: 12 June 2013 Media: Radio, Regional press Sector: Leisure Number of complaints: 78 Complaint Ref: A13-224406 Ad A regional radio ad, a press ad and an e-mail ad, for Rangers Football Club: a. The regional radio ad stated "Join Scotland's most successful club at IBROX and guarantee your seat for the last four games of the season. Rangers season tickets are priced from 69 for adults, 48 for concessions and just 17 for kids ...". b. The press ad stated "JOIN SCOTLAND'S MOST SUCCESSFUL CLUB AT IBROX ... STILL GOING STRONG ... 54 TITLES ... RANGERS THEN ... RANGERS NOW ... RANGERS FOREVER". c. The e-mail ad stated "JOIN SCOTLAND'S MOST SUCCESSFUL CLUB AT IBROX". Issue Seventy-eight complainants challenged whether the claim "Scotland's most successful club" was misleading, because they understood that the current club had only been formed in 2012. CAP Code (Edition 12) 3.13.7 BCAP Code 3.13.9

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Advertising Standards Authority Ruling Continued.........
Response The Rangers Football Club Ltd (Newco) explained that The Rangers Football Club Plc (Oldco), which previously owned and operated Rangers Football Club (RFC), went into administration on 14 February 2012 and that, in order to preserve RFC after a Creditors Voluntary Arrangement failed, its business and assets were purchased by another corporate entity, which was now known as the Rangers Football Club Ltd and that, therefore, the same Club was now owned and operated by themselves. They provided an extract from a Decision concerning RFC, by an Independent Commission appointed by the Scottish Premier League, in which it was stated that "in common speech a Club is treated as a recognisable entity which is capable of being owned and operated and which continues in existence despite its transfer to another owner and operator". They said the Commission had clearly stated that the same Club continued, regardless of the legal entity that owned and operated it and, therefore, that RFC had continued in existence since 1872. They also provided a letter from the European Club Association (ECA), concerning the RFC's continuing membership after the liquidation, in which it stated that, although run by a different legal entity, it considered RFC was still the same football club, having the same registration number with the Football Association, the same fans, the same stadium, the same club coefficient ranking and the same trophies, and it therefore recognised RFC as a founding member of the ECA, despite the change of ownership. Newco advised us that RFC was a full member of the Scottish Football Association (SFA) and that when Oldco, the legal entity who previously held the membership, went into administration and agreement was put in place to transfer exactly the same membership from Oldco to Newco, which had resulted in membership of the SFA being maintained. They further pointed out that the websites of the Scottish Premier League, the SFA and UEFA all confirmed that RFC had been in existence for 140 years by detailing all honours that the Club had won since its formation in 1872. The RACC said they felt that, given RFC's history, the claim "Scotland's most successful club" was valid and would not mislead. Assessment Not upheld Whilst the ASA acknowledged that Newco had not taken on all of the debts and liabilities of Oldco when it purchased its assets and business and that that would normally preclude it from trading on the reputation of the former company, we noted that both an Independent Commission appointed by the SPL and the ECA had reached the conclusion that the football club RFC was a recognisable entity in its own right, and that it had continued in existence despite being transferred to another owner and operator. We further considered that consumers would understand that the claim in question related to the football club rather than to its owner and operator. We therefore concluded that it was not misleading for the ad to make reference to RFC's history, which was separate to that of Newco. We investigated the ad under BCAP Code rules 3.1 (Misleading advertising) and 3.9 (Substantiation) and CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.7 (Substantiation) but did not find it in breach. Action No further action necessary.

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