The Deid and their Deeds
There is, as the often is, a big unanswered question. The deeds have been presented and they say Sevco Scotland has Ibrox and has done since 14th June 2012.
This is, of course, a highly notable date as it the date upon which Rangers OldCo departed the land of the living and liquidated. What this indicates is that the ownership of Ibrox passed directly from OldCo to Sevco Scotland.
However, the CVA agreement committed the sale of the assets (on liquidation) to Sevco 5088. In fact, when Sevco 5088 were granted exclusivity on 12th May 2012, Sevco Scotland were still a whole 17 days from coming into existence.
So, a question must be posed. - If we accept that Sevco 5088 were obligated to purchase Rangers assets upon liquidation (as outlined in CVA Article 4.23), how did the assets manage to actually pass to Sevco Scotland?
A reading of the CVA helps (located here: http://scotslawthoughts.files.wordpress.com/2012/09/rangers-cva-proposal.pdf - as you may notice, it was published the day of Sevco Scotland’s birth. Not sure if that is a coincidence or not).
The key elements are sections 4.20 and 4.23.
4.20 starts “The Offer Letter is confidential between Sevco and the Company, but the principal terms are as follows”
4.23 states “In the event that either this CVA is not approved, or the other Conditions of the loan are not satisfied or waived by 23 July 2012, Sevco is contractually obliged to purchase the business and assets of the Company for £5,500,000 by 30 July 2012. All further terms of that sale have been agreed in advance and are confidential”
There is a word used in each excerpt that is vital - confidential. All we know from the CVA document is that confidential correspondence that is legally binding has been entered into.
For this, we have to look at the practical aspect of the Rangers takeover. Duff and Phelps could hardly be seen to be meeting with Craig Whyte, therefore any meeting with Sevco 5088 regarding a takeover cannot have included him (I accept, he may have been on the end of the phone, but it’s not as if there won’t have been words when he wasn’t listening). It is, therefore, accepted that for a large part of the arranging a CVA process, Charles Green was the only man Duff and Phelps were talking to.
Therefore, there is nothing to have stopped Charles Green saying one thing to Whyte and, of course, another thing to Duff and Phelps. This is, perhaps, the relevance of the CVA document going out on 29th May.
The process would be this. Charles Green sets up Sevco 5088 with Craig Whyte as director. Craig Whyte ensures his name is not revealed on paperwork as that would scupper the plan totally. Charles Green meets Duff and Phelps under the pretence of securing a deal as Sevco 5088. However, as Craig Whyte is not there, he puts forward an alternative plan - to enter into these confidential sale agreements a clause that states the CVA proposal is binding not for merely Sevco 5088 but for Sevco 5088 and also any successor company to it. Green then waits until everything is published in writing (bearing in mind that these confidential agreements would not have been available to Craig Whyte to view) to set up Sevco Scotland. Whyte (fairly) assumes that, as everything is in writing in the CVA proposal, that everything is fine. Meanwhile, Green, aware that at this point, as far as Companies House are concerned, he is the sole director of Sevco 5088, transfers everything into Sevco Scotland. Sevco 5088 remains a subsidiary of Sevco Scotland to make Craig Whyte think everything is still OK (and only notices when Rangers float that he actually hasn’t become a lot richer). Meanwhile, the CVA fails, Rangers OldCo liquidate and Sevco Scotland get the lot.
It’s a complex web but the confidentiality that Duff and Phelps mentioned in the CVA makes it a possibility. It certainly would be the most obvious way of getting the share transfer done and, as theories go, explains the animosity between Whyte and Green, why the deeds are under Sevco Scotland, why Green didn’t simply change the company address from London instead setting up a new Scottish company, why Whyte took so long to become fully aware of the ramifications and how it could all be done and still not lose the initial veneer of credibility that any non-Whyte related buyer would have.
We always knew who had the deeds was important. Now there are two other documents we need to unravel this web - the confidential agreements between Duff and Phelps and Sevco 5088 (as then orchestrated by Charles Green) will reveal this magician’s tricks.