The clear and present danger of Green’s litigation costs.

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.

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8 thoughts on “The clear and present danger of Green’s litigation costs.”

  1. Difficult one for King to deal with. Scotland is no South Africa and he doesn’t have an Agliotti or Nasseef to take care of business. He will have to rely on the Law of the land and Barry Roux only practices in South Africa. Maybe he can try Chicago where a well known Blogger who has never been to Ibrox and started life selling T shirts before moving on to living off the Blue Pound through a sycophantic Board Blog is now giving out legal advice on the matter.

    1. As you can see from my update on yesterday’s events, Green is covered and RIFC exposed. If Green convicted, legal predators will pursue compensation from Green/RIFC for an allegedly fraudulent IPO. This is much bigger than most realize,

  2. JJ

    From an article in the Daily Rancid ….more bravado??

    “King confirmed this afternoon that Green has taken legal action against the club after a request for fees was initially turned down.

    “Charles Green approached the club prior to his arrest and demanded that we pay his legal costs in respect of his co-operation with Police Scotland in its criminal investigation into his time as an officer of the club,” said the Rangers chairman.

    “I advised him that we would not do so. He was subsequently arrested and has now approached the court to compel the club to pay the legal costs of his defence to the criminal charges.

    “This application will be strongly resisted.”

    http://www.dailyrecord.co.uk/sport/football/football-news/rangers-confirm-charles-green-cash-6508610

    GSTQ

    1. Gordo

      Thanks for your comment. My post yesterday was prescient. The IPO prospectus clearly establishes that the legal buck stops with the board. If Green convicted, RFC 2012 will be preferable to RIFC.

  3. “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.”

    How can he take the club to court when there is clear demarcation between the club and the holding company? It it surely the holding company that he is taking to court.

  4. Green bought 3 assets, Ibrox/ASA/IP via Sevco Scotland which became TRFC. Note negative goodwill in RIFC accounts which proves sale of the assets to RIFC. They are still registered to TRFC but owned by RIFC, as TRFC is a wholly owned subsidiary. I refer you to the IPO prospectus that lists the assets owned by RIFC.

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