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 Posted by ESPN Staff
Mar 23, 2012

Rangers' Ticketus deal still stands

Rangers' administrators and Ticketus have both welcomed a ruling on the status of their contract following a court case that revealed the Ibrox club received two payments totalling more than £30million during Craig Whyte's stewardship.

A judge at the Court of Session in Edinburgh would not give directions on administrators' request to tear up the contract because Duff and Phelps held back information on bids so as not to undermine the process.

Administrators welcomed indications they would have the right to refuse to honour the deal if it was in the best interest of creditors.

But Ticketus questioned whether that scenario could arise given the "strength" of the bid from Paul Murray's Blue Knights consortium, for which they are providing initial financial backing.

The judge's written ruling clarified the exact nature of the deals between Ticketus and Rangers chairman Whyte.

Documents showed that Whyte received more than £20million plus VAT in May last year as previously stated, for season tickets over three years.

Rangers then sold tickets from another season - 2014-15 - receiving more than £5million on or about September 21. With VAT added, the total payments Rangers received under Whyte were £30.5million.

Having sold season books from the current campaign, Ticketus now own the rights to tickets worth £27million over the next three years, the company confirmed tonight.

The only other publicly confirmed bidder of the four interested parties, Brian Kennedy, was tonight considering the implications of the complex ruling.

Administrators had initially argued that the deal could put off potential investors as they look to sell the club, which went into administration last month over the non-payment of around £9million in PAYE and VAT following Whyte's takeover.

Lord Hodge declined to give Ticketus preferential treatment saying their rights "were purely contractual rights and were not trust rights which would prevail over ordinary creditors in an insolvency".

Duff and Phelps described that as a "significant step towards clarifying the future" of the club.

In a statement, joint-administrator Paul Clark said: "Lord Hodge has made it clear that the Ticketus arrangements do not mean Ticketus has property or real rights over seats at the stadium or, indeed, the proceeds from the sale of future season tickets.

"It is clear from the judgement that, as administrators, we have the statutory right and powers to have the company (the club) refuse to honour the Ticketus arrangements if such a decision would be in the interests of creditors generally."

Ticketus welcomed the lack of clear authority to tear up the agreement.

In a statement, the firm said: "The court has made it clear that the Ticketus contract cannot be breached unless there is substantial evidence that by doing so the administrators are able to significantly improve returns for creditors and improve the chance of returning the club to a going concern.

"Given the strength of the Blue Knights Consortium's bid, and Ticketus' role in this with its contract remaining valid and enforceable, we question the ability for this to happen."

The finance firm said it would "do everything necessary'' to ensure the contract is honoured and their investors' interests were protected.

On the Blue Knights bid, the statement added: "We are confident that the consortium's bid is in the best interests of the club, its fans and creditors by guaranteeing the future of Rangers and ending this period of uncertainty for the club.

"Collectively, the consortium has the ability to provide the club with the financial stability it needs to continue to perform at the highest level of competition.

"The consortium is committed to providing Rangers' loyal fan base with the transparency and disclosure it deserves, as well as exploring ways for fans to have a closer relationship with the management of their club.''

Sale Sharks owner Kennedy said: "I am taking legal advice to find out what the court ruling means with regard to the indebtedness of Rangers Football Club and until that is clarified I will be making no further comment."

An American consortium is thought to be behind a third bid, while administrators have given no information on those behind a subsequent offer.

The written ruling also indicated there may be further legal wrangling over the season ticket agreement (STA) given that the initial cash injection was used to pay off the club's £18million bank debt, a key part of the takeover deal.

Lord Hodge said: "The administrators' legal advisers have asserted that the STA is illegal on the ground that it was an agreement for the giving indirectly by Rangers of financial assistance for the acquisition of its shares contrary to section 678 of the Companies Act 2006.

"The existence of this challenge is not however relevant to the directions which I have to give as I must assume at this stage that the Ticketus agreements are valid.''

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