Alastair Johnston and A Statement from Celtic Supporters, “Air of unreality as 140 years of history is formally ended in less than nine minutes,” The Herald, 15 June 2012

YESTERDAY FORMER Rangers chairman Alastair Johnston attacked Celtic fans who claim that Rangers died in February 2012 and that the team playing out of Ibrox are a new club.

“I left after we won the title for the third time in a row in 2011 and I wasn’t believing my ears about what was going on at the club and where it was going.

“You were hearing all the words like the Rangers have disappeared, they have died, it was a new club and all the stuff which self-interested people tried to maintain.

“I always wondered about the mentality of certain Celtic supporters, not by any means most of them, who basically said our club died in February, 2012,” he told the media as reported by ALL of the papers, including Scottish Sun.

There has been nothing at all in any of the papers that provide the contrary view to Johnston’s claims after he re-ignited this argument.

Firstly no Celtic fan EVER said that Rangers died in February 2012. It was on Vaventine’s Day that Rangers entered Administration but other clubs have been in this situation and lived to tell the tale.

Rangers had a CVA rejected in June 2012 and entered liquidation in October 2012 – some Celtic fans say they died in June 2012 and others prefer October 2012, it doesn’t matter much really, but we all agree that they didn’t die in February 2012 but failed to see out the year.

“Air of unreality as 140 years of history is formally ended in less than nine minutes,” The Herald headline read on 15 June 2012.

The article below that headlines reads as follows…

It was over in nine minutes.

The Rangers creditors drifted in through Exit 50 at Ibrox Stadium just before 10am and by 10.09am they were on their way out. In those few minutes 140 years of history had been rubbed out.

Of the few owed money by the club who attended yesterday morning’s meeting at the Ibrox Suite most didn’t want to talk, and the few that did struggled.

“We’re in shock,” admitted debenture holder Stewart Boal. “The club’s gone. We’ve got to move on and start again.”

In truth, everyone knew the meeting was a mere formality after HMRC announced earlier this week it would reject Charles Green’s terms for a company voluntary arrangement (CVA).

Few of the 276 creditors, who are owed somewhere in the region of £134 million and range from a face painter and magician to the local newsagent, turned up for the meeting. Those that did were clearly shocked by the speed of the club’s end. Asked to sum up his feelings, as he left Ibrox, Mr Boal said he found the whole thing “unreal, very, very sad”.

Fellow debenture holder Robert Killen attempted to look ahead. “It’s a new beginning,” he said. “We’ll make the best of it, I suppose.” But the uncertainty in his voice told its own story.

Most of the money from Mr Green and his backers will now go to the administrators Duff & Phelps, leaving the rest of the creditors to pursue what they are owed in whatever way they can. Did Mr Boal and Mr Killen have faith in Mr Green and his team? “I don’t know who they are,” said Mr Killen simply, before the pair wandered off, still reeling at what they had just sat through.

Inside, it was a sombre affair, but conducted briskly and curtly, as if dealing with little more than a minor point of order rather than confirming that Rangers Football Club plc will eventually be liquidated.

In a sense, the meeting was a formality. The precise outcome of the vote on the CVA proposed by Duff & Phelps was academic, since HMRC had already indicated its decision to vote against. It is currently owed £21m out of a £55m debt pile, and with the holders of 75% of the debt having to vote in favour for the proposal to pass, there was no chance of the CVA being approved.

Lawyers queuing up outside chatted like old friends, and discussed who they were representing. “I’m here for Ticketus,” said one. “Are you? I’m here for Palermo,” said another. They all took notes during proceedings, although Paul Clark of Duff & Phelps refused to take questions from the floor because too many journalists were in the room.

Once HMRC’s formal rejection had been read out, Mr Clark explained there was £30m represented in the room, which contained 30 people. When he asked if any others wished to reject the CVA, three arms were raised. He then asked for abstentions, and one hand was raised. Everybody else voted in favour.

After explaining that the administrators would remain in charge of the affairs of Rangers Football Club plc for another six to eight weeks before BDO, the HMRC-appointed liquidators, take over, he handed the microphone to a pale and drawn Mr Green.

After a pause, he said it was time for unity, “whoever owns the club”, before revealing that the newco would be called The Rangers Football Club. Manager Ally McCoist was sitting at the back, next to the director of football administration, Andrew Dickson, and his face was set firmly.

“That then concludes the business of the day,” said Mr Clark.

THE DEATH OF RANGERS FC

There are those who maintain the myth that the Rangers FC formed in 1872 is the same club pre and post liquidation 2012. Here is why Rangers FC no longer exists.

MAIN STREAM MEDIA (MSM)

When it became clear that liquidation was inevitable for Rangers the overwhelming response from the MSM was that Rangers, including its history, would cease thereafter. Here is a small selection of quotations, succinctly capturing this widely held view in the media, starting with a quote from that article in the Herald we’ve already mentioned.

The Herald – 15 June 2012:

“Air of unreality as 140 years of history is formally ended in less than nine minutes”

The Daily Telegraph – 12 June 2012:

“Rangers in crisis: the final whistle sounds on Rangers’ 140 years of history”

Daily Record – 13 June 2012 – this one written by James Traynor…

“Rangers FC as we know them are dead. It’s all over. They are about to shut down for ever…They’ll slip into liquidation within the next couple of weeks with a new company emerging but 140 years of history, triumph and tears, will have ended… No matter how Charles Green attempts to dress it up, a newco equals a new club. When the CVA was thrown out Rangers as we know them died.”

Of course, journalists are not the most reliable barometer of definitive opinion, but why would they express such an unambiguous view in the first place?

Even Charles Green held the same categorical viewpoint, speaking to the BBC said: “…the history, the tradition, everything that is great about this Club, is swept aside.”

This leads us on to the crucial piece of evidence contradicting the idea that Rangers FC still exists.

INSOLVENCY LAW

When a company is liquidated its business activities cease to exist. The business of Rangers FC Plc was football. When Rangers FC Plc was wound up, so were the football activities of Rangers FC Plc i.e. the football club and associated merchandising etc.

The BBC recognised this fact when they observed that:

“The Rangers Football Club PLC is a public limited company registered in Scotland (company number: SC004276) and was incorporated on 27 May, 1899. When the current company is officially liquidated, all of its corporate business history will come to an end.”

It is now clear why Charles Green and the mainstream media, including Jim Traynor, held the unequivocal belief that liquidation signalled the demise of Rangers FC.

Change of company name or ownership, or indeed a combination, does not in itself represent a cessation of a business’ activities. Manchester United changed owners when the Glazers took over but there was no claim that Manchester United FC stopped existing as a football entity. Similarly, when Craig Whyte bought Rangers FC from Sir David Murray, Rangers FC continued to exist. When Fergus McCann bought Celtic FC there was not only a change in ownership but also a change in corporate status, from The Celtic Football and Athletic Company 1888 to Celtic Football Club Plc. Owners come and go, as do corporate names, but provided liquidation has not taken place the business itself continues with an unbroken, seamless history.

If company status altered the historical timeline of football genealogy then Manchester United Plc became a new club when it changed its company status from Manchester United FC Ltd to Manchester United Plc in 1991; similarly with Celtic under Fergus McCann; and with Rangers FC when Sir David Murray changed the company status in 2000 from The Rangers Football Club Ltd to The Rangers Football Club Plc, in which case there have been three Rangers clubs: one before the Plc, one immediately after, and a third after liquidation. The reason the allegation that change of company status alters a company’s historical timeline has zero credibility is because business continuity is not dependent on company status, unless liquidation has occurred.

Furthermore, if a new company is formed – using assets bought from the old, liquidated company, for the purposes of operating the same type of business – it is not only a new company that has come into being but also the start of a new business venture, irrespective of the nature of that business. In the context of Rangers, the Rangers FC plying its trade in the lower leagues is a new football club and not the same club as that which previous played in the SPL. To deny otherwise is contrary to insolvency law. If it were otherwise then insolvency law would be a meaningless legal instrument.

NO PRECEDENTS

Legal matters can be determined by statute (Acts of Parliament) or case law. In terms of statute, there is no law that permits a liquidated company’s history to continue unbroken after liquidation: on the contrary, there is one to prevent such an event taking place – The Insolvency Act 1986. In terms of case law, there is no legal precedent to justify the claim that a liquidated company’s history can legitimately resurface under the guise of another company. Once a company is liquidated, its name, historical timeline and associated business activities immediately cease.

In the case of a football club, there is no club in the UK that has been liquidated and resurfaced, after liquidation, with its history intact. In Scotland for example, Airdrieonians, formed in 1878 (under the earlier exotic name of Excelsior Football Club) went into liquidation in 2002. In the same year Airdrie FC was formed but because of insolvency law could not lay claim to the history of its previous incarnation, which to their credit they accepted with good grace. Other examples include Gretna and Clydebank.

Rangers’ fans erroneously point to the case of Leeds United FC as evidence of a club that has a continuous historical timeline intact after liquidation. In 2007, Leeds United AFC Ltd, under the threat of liquidation, was sold to Leeds United FC Ltd, but with the important proviso that HMRC would agree to a CVA. HMRC did eventually agree to a CVA and Leeds was saved from compulsory liquidation. The club suffered a points deduction and after paying off the creditors and the proper and orderly transfer of assets from Leeds United AFC Ltd to Leeds United FC Ltd, the old club company was voluntarily wound up. If a CVA had not been agreed and Leeds United AFC Ltd had been forced into compulsory liquidation then Leeds United FC Ltd (i.e. the new company) would NOT have been able to claim the history of the old club. Rangers FC is a very different case indeed and Rangers fans cannot point to the example of Leeds FC as an exemplar of club survival after liquidation.

SALE OF ASSETS

Listed below are the assets of Rangers FC Plc bought by Charles Green (from Duff & Phelps):
Assets Price
Goodwill £1
SPL Share £1
SFA Membership £1
Leasehold Interests £1
Player Contracts & Registrations £2,749,990
Stock £1
Plant & Machinery £1,250,000

Nowhere is Rangers FC listed as an asset.

Nowhere is the history of Rangers FC listed as an asset.

Yet, a thesis has been postulated that a company’s history can be sold as a separate item in a company asset sale. This is manifestly absurd. In the case of Rangers, the bizarre logic of that position is:

a) Craig Whyte had the option not to purchase the history of Rangers when the club was sold to him, or parts of the history that he did not like, thus wiping out any potential tax liability or creditor debt.

b) After Craig Whyte, someone could have purchased the stadium while another party could have submitted a successful bid to own its history.

c) If a club’s history was a saleable asset then it would also mean that a club, even as a going concern, could sell off its history to another club in an effort to raise money.

All of this, of course, is unheard of, and for good reason: a club’s historical events are tied irrevocably to that club and a club separated from its history loses its identity and meaning. Crucially, when insolvency law kicked in and consigned Rangers FC Plc and its football activities to the past, the club and its history thereafter ceased to continue, except as an historical footnote.

There has been an attempt to conflate a company’s goodwill with ownership of its historical timeline. HMRC define goodwill as “the value of the attraction to the customers which the name and reputation possesses”. The value of purchasing Ibrox stadium and playing in the same colours as the old club, given the record of achievement of the old Rangers FC, was obvious to Charles Green, but equating goodwill to ownership of Rangers FC and its historical timeline is an incredulous sleight of hand that flies against both the common sense definition of goodwill and the concrete clarity of insolvency law.

To then argue that insolvency does not breach that timeline is to employ Alice in Wonderland logic. The effect of which would be to ensure that no football club could ever be compulsorily dissolved. By extension, companies about to be liquidated could adopt the same law-defying approach: sell off the core of the business under the asset “goodwill” and resurface under a new company name but with the same core business activities as before, claiming an unbroken historical timeline. Of course, this is nonsense because it is unlawful.

LORD NIMMO SMITH

Lord Nimmo Smith has been used in evidence in support of the notion that old Rangers FC survived liquidation. He said that a football club can exist separate from its holding company. Now we have the bizarre position where not only can a football club be separated from its history and its history be sold on (even if the club is subsequently liquidated along with its holding company), but a club can also exist without an owner. If the Manchester United Board decided voluntarily to liquidate Manchester Utd Plc then Manchester Utd FC would no longer exist, except in the minds of its supporters. To argue that Manchester’s history could be auctioned either pre or post liquidation defies interpretation in the real world of insolvency.

Lord Nimmo Smith was also wrong when he said that Rangers FC still exists. He was reflecting the view of the SFA who, we know, know Sweet FA, not least their own arcane humpty-dumpty rules. Dr Gregory Ioannidis, a leading authority on Sports Law, agrees that “the history of a club cannot pass from one company [into liquidation]to another”.

The import of LNS’ claim was that the new Rangers FC could be punished for the sins of the old Rangers FC, if they were one and the same club. If he had maintained that claim and punished the Rangers currently plying their trade in the SFL then a court challenge would have immediately nullified that punishment on several grounds:

1) such a punishment would harm newco and newco had nothing to do with oldco.

2) The Rangers in the lower leagues is a new club (insolvency law saw to that) and, like newco, had nothing to do with the sins of old Rangers.

In the end, LNS strayed clear of punishing newco in any shape or form and, instead, levied a futile fine on oldco. HMRC, like Dr Gregory Ioannidis, and consistent with insolvency law, also recognise that newco has no connection whatsoever with oldco. Unlike insolvency law, LNS’ philosophical musings are not legally binding; nor do they set a legal precedent.

SFA MEMBERSHIP AND EUROPEAN FOOTBALL

When Charles Green bought the assets of Rangers FC Plc he also purchased the old club’s SFA membership and SPL share. Prior to liquidation, Rangers had full membership status within Scottish professional football. After liquidation, the club playing in SFL Division 3 was allocated associate membership status. The reason for that was very simple: the Rangers playing in the SFL was a different club than the one which previously played in the SPL.

Importantly, the new Rangers applied to join the SPL but their application was rejected, despite a mysterious 5-way agreement. If Rangers was the same club pre and post liquidation then an application would have been completely unnecessary, particularly since they claimed to purchase the old club’s SFA membership and SPL share. Of course, Rangers was legally dissolved after liquidation – hence the need for a fresh application from the new club.

Similarly, the new Rangers then applied to join the SFL and this time their application was successful. Remember, if an existing SPL club changes ownership or its holding company changes from a Ltd to a Plc, it has no bearing on the club’s membership status and therefore there is no requirement to re-apply for SFA or SPL membership – it is liquidation that forces that event.

Furthermore, because Rangers post-liquidation is a new club, it is unable to compete in European competition for three years. It is a stipulation of UEFA that a licence to play in Europe can only be given to a club that has been a member of a national association for three consecutive years. The old Rangers did have a UEFA licence but the new Rangers do not. When Rangers FC expired, so did their UEFA licence.

The fact that the SFA has allowed The Rangers FC to pretend that their history is continuous, contrary to insolvency law, has no bearing on the facts of the case and will forever remain a stain on the SFA’s reputation.

WHO DID LIVINGSTON PLAY IN THE 3RD ROUND OF THE SCOTTISH CUP 2012/13?

The credit for this further piece of evidence on why Rangers FC is a new club belongs to Gordon Johnston:

The third round of the Scottish Cup 2012/13 consisted of 16 ties between Scotland’s smaller clubs, after which, in the fourth round, the 16 top clubs from the previous season – 2011/12 – then joined the fray. The 16 top clubs included the 10 clubs in the SPL from season 2011/12 and the top four from last season’s SFL First Division: Ross County, Dundee, Falkirk and Hamilton Academicals. Looking at the SFL First Division from 2011/12 it is clear that Livingstone finished 5th and therefore should not be considered to be among the “16 top clubs”:

Position Team Points

1 Ross County 79, 2 Dundee 55, 
3 Falkirk 52,
4 Hamilton Academicals 49
 and 5 Livingstone 48.
Yet, Livingston got a bye into round four when they should have been playing in round three! Why? The regulations for last year’s third round were quite clear and ought to have excluded Livingston:
“The clubs which, in the previous season, were members of The Scottish Premier League and those clubs finishing in The Scottish Football League First Division league positions one to four, shall be exempt from playing in Round Three of the Competition.”

The reason that Livingston got a bye was because one of the clubs in the SPL – Rangers FC – no longer existed. If they existed, irrespective of their current league or position in 2012/13, they would have been entitled to enter the competition in round four courtesy of the previous season’s placings. The SFA considered The Rangers FC to be a new club. Hence the creation of a spare slot, duly allocated to the team finishing 5th in the SFL First Division, i.e. Livingston.

CONCLUSION
The club formerly known as Rangers FC is as dead as a dodo. The new club masquerading as the old Rangers FC is just that: a new club masquerading as the old club. Unfortunately, when conclusive proof of the demise of Rangers FC is brought to the attention of Rangers fans, there is an apoplectic response: one is either deluded or a Rangers Hater, or both. Fortunately, insolvency law usurps personal insult.

JohnBhoy

BEFORE the first meeting between the club Charles Green founded in 2012 and Celtic, in the League Cup semi-final in February 2015, a group of Celtic supporters crowd funded a full page newspaper advertisement in the Sunday Herald on 25 January 2015 – one week before the historic first meeting between the two clubs.

That advertisement received world wide coverage and was featured on Football Focus on national television. The Rangers directors said nothing to contradict anything that was stated in this advertisement – the FACTS were hard to argue with.

Here is that advertisement.

About Author

The Celtic Star founder and editor, who has edited numerous Celtic books over the past decade or so including several from Lisbon Lions, Willie Wallace, Tommy Gemmell and Jim Craig. Earliest Celtic memories include a win over East Fife at Celtic Park and the 4-1 League Cup loss to Partick Thistle as a 6 year old. Best game? Easy 4-2, 1979 when Ten Men Won the League. Email editor@thecelticstar.co.uk

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