If BDO Successfully Sue Duff & Phelps Are Sevco In Danger Of Being Next?

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Earlier this week, news broke that BDO, the liquidators of Rangers, are to sue Duff and Phelps over the numerous unanswered questions relating to their handling of the administration.

A criminal case against Paul Clark and David Whitehouse has already collapsed, allegedly due to the mishandling of evidence by an overzealous Police Scotland. A civil action was always a possibility, and when one considers that BDO could lose a chunk of the final settlement to HMRC in the Tax Case appeal it makes good sense.

The Celtic sites have long been interested in how that administration was run.

Let’s not forget that Sevco were the only club in the history of football who actually tried to sign someone after they entered the process. The Daniel Cousin deal was signed the day before Craig Whyte made his announcement, but he hadn’t been registered with the SPL or the SFA. Duff and Phelps ought to have cancelled it at once, but they shocked observers by trying to push it through only for the governing bodies to strike it down.

Sevco also retained the bulk of their playing squad, including every single one of the highest earners, assuring that week on week the administration was actually costing money. Not a single major footballer was paid off, only a handful of lesser players and reserves. It was astonishing to watch administrators continue to run a loss-making company as one, when their remit was to cut costs and get the best deal possible for creditors.

No-one did more to limit the eventual settlement than they did.

The asset sale has long been questioned too, especially in that it went to a company with a different name than that which signed the exclusivity deal. Sevco 5088 were supposed to buy the assets. Sevco Scotland Limited eventually did. On top of that, the agreed fee was significantly higher than that which Charles Green paid; he said the failure to get a CVA and the SPL’s decision not to put the club in the top flight had significantly lowered the price.

It’s not clear that the club was ever made available to purchasers in the proper fashion, and it’s always been known that Craig Whyte’s most fearful moment came on the morning of the administration, when HMRC asked a judge to appoint BDO instead. Duff and Phelps were his guys; he has never hidden that fact. Paul Clark was with him on the day he purchased Rangers for £1 from Dave King. He ought never to have been allowed near the admin process.

The assets of Rangers went for a ludicrously small sum; £1.5 million bought the stadium, the training ground and the car-park.

This has always been seen as a disgrace.

Nobody believes that it was a reasonable figure, especially not when weighed against Duff and Phelps own fees which ended up more than twice that.

This challenge is long overdue.

BDO are seeking £28.9 million in damages.

The statement, which they gave to the press, reads;

“During the course of the liquidation, questions have arisen regarding the strategy previously adopted by the former administrators, which have not, to date, been adequately answered. In seeking clarity, the joint liquidators have been left with no other option but to pursue the matter via the Scottish Court. The joint liquidators look forward to the resolution of this matter.”

This might well have implications for the club, which is the last thing they need at this delicate moment in time, with the news tonight that Frank McParland is leaving the club, either willing or not. It really depends on who’s doing the reporting.

But Sevco is in freefall and no-one can doubt that.

They already face legal action on multiple fronts.

If the asset sale which set them up is now being challenged that’s a new problem. There is already a legal process underway to establish whether or not The Worthington Group owns the club; they were the law firm which set up Sevco 5088. This is one of the reasons the club was forced to put a notice in their accounts drawing attention to these challenges. It BDO succeed in their claim it stands to reason they’ll go after Green next. Why wouldn’t they? He was the prime beneficiary.

The assets themselves were allegedly worth over £80 million; this was the valuation Duff and Phelps placed on them in their initial report. To have accepted a fraction of that for them is shocking, and someone clearly made a lot of money out of it.

Green himself made plenty out of the share issue, which a lot of us have long suggested ought to have been declared invalid, and fraudulent.

If it is ever established that the assets were acquired through fraud, what would happen to them?

If this was a case over stolen property it would be returned to the rightful owner, no matter how many times it had it changed hands. Sevco’s shares have been in many hands since the establishment of the club; but who ultimately would own them?

The tax payer would, as HMRC was the biggest creditor.

The whole history of Sevco is shrouded in this stuff, and the SFA let it happen right under their noses.

Whilst it’s highly unlikely that BDO and HMRC would go as far as to reclaim the assets, this casts another dark cloud over the entire institution and the convergence of all these various legal challenges conspire to make a Dave King share issue virtually impossible.

There is literally no end to the trouble this club finds itself in, and McParland’s impending departure is another sign that the basket case organisation is about as dysfunctional as it’s possible to be and still keep the lights on.

Even I constantly marvel at their continuing ability to surprise us with fresh scandal.

It’s the show that never ends over there.

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