“Former Rangers chief executive Charles Green is taking the club to court in a bid to get them to pay his legal fees after he was charged with serious organised crime offences.BBC Scotland has learned that Mr Green claims his contract with the Ibrox club entitled him to legal cover during and after his spell in charge.His lawyers have written to Rangers and want a court ruling on the claim.It is understood the fees involved could be in excess of £500,000.The court ruling could happen as early as next week.”
The responsibility to cover a director’s legal costs would always revert to the company.This is why companies indemnify against this exposure via insurance. This insurance provides cover during a director’s tenure and, significantly, after tenure.
If the alleged corporate malfeasance occurred during his tenure at Sevco Scotland, then one might reasonably conclude that Rangers had no case to answer.
However, we know that Sevco Scotland was listed as a subsidiary of The Rangers Football Club plc So in this instance, responsibility would revert to TRFC and to its holding company RIFC.
Director liability insurance would not cover the criminal charges against Green, but it would cover his alleged infractions of The Companies Act of 2006.
The argument of the respondent, Rangers, would be that as Mr Green was instrumental in setting up both RIFC and TRFC then it behoved him to arrange insurance. I don’t see this argument holding up.
In my opinion Rangers (RIFC) will be responsible for his litigation costs. If insurance was in place it would not indemnify RIFC against Mr Green’s criminal charges. Therefore whether insurance was in place or not is a moot point
This could not have come at a worse time. Cash flow is so tight that Rangers are attempting to sell 3/4 ST tickets, courtesy of a promotional package with The Herald and Chris ‘Union’ Jack. I have never come across a 3/4 ST initiative.
As for the costs of Mr Green’s defence, £500,000 is conservative. According to Whyte’s counsel, he has 100,000 A4 pages as part of his bundle. Whyte’s counsel takes the view that the trial could last as long as the Lockerbie proceedings. If this were the case, you could multiply this amount by ten and still come up short.