Charles Green is all but over the line in his consortium's attempted purchase of Rangers.
When the Company Voluntary Arrangement vote at tomorrow's meeting formally rejects the proposal tabled by Duff & Phelps, the sale of the business and assets to Sevco for £5.5m will be automatically triggered. Two previous bidders and a new, third party are preparing higher offers which will apply some pressure, but most of the factors are currently in Green's favour.
Both he and the club's administrators claim their agreement is binding, although the terms have never been published, unlike the conditions of the CVA proposal. Resolution 17.1.4 stated that, "the Joint Administrators can explore any and all options available to realise the assets of the Company without recourse to creditors. The Joint Administrators be authorised to conclude a sale of the whole, or part of the business, property and assets of the Company without having to obtain the sanction of the Company's creditors at further creditors meetings, upon such terms as the Joint Administrators deem fit and they be authorised to liaise with all relevant parties, bodies or organisations which they deem relevant for achieving that purpose."
Other bidders can hope they might disrupt the process, particularly since Herald Sport understands that Green does not yet have the full £5.5m funding in place. A creditor can challenge the business and asset sale by claiming that it is undervalued at that figure – and their position would be strengthened by having several new offers to hand, particularly since the business and assets were never placed on the market alone – but anything other than Green falling short or Duff & Phelps breaking their contract would be unlikely.
"As long as Duff & Phelps have determined that's the best sale they can get for the assets, they'll go ahead," says Neil Patey, of Ernst and Young. "It's difficult [for creditors] to challenge if there's been an open market and this was the best price they could get. For an accounting concept, you can value Ibrox at £100m, but that's existing use; someone who wants a 50,000-seat football stadium in the south side of Glasgow. In the open market, who's going to buy it for that? Nobody.
"Duff & Phelps would be able to claim or support the fact that they had to call a halt to the bidding process at some point in time. At the point they called it, Charles Green's was the best offer on the table. It's too late now if the proper process has been concluded. HMRC would have to have grounds on which to challenge that this was not the best price available."
Both Ticketus and HMRC will have representatives at the creditors' meeting at Ibrox tomorrow, and a spokesman for the revenue told STV that there were "no issues at the moment" over the agreement between Duff & Phelps and Green's consortium. Herald Sport understands that Sevco includes Mike McDonald and Rafat Rizvi, two investors with colourful backgrounds who have each put up £2m, but they appear close to pulling off their bid to buy the assets of a business in its moment of crisis.
"I don't see what stops somebody else making an offer for the assets," adds one insolvency expert, who asked to remain anonymous. "But if nobody emerges then you can't challenge it for being an undervalued sale. If you have evidence of higher values you can challenge it for not doing what's best for creditors.
"But the time you've done your challenge and it's gone to court, you could be two years down the line. That's where the practicalities are a problem, unless someone gains an interdict, and you'd need to have strong grounds for that."
With the agreement between Duff & Phelps and Green thought to be binding, and if he comes up with the funds to complete the purchase, then the assets could be transferred to the newco as early as Friday. But that only then leaves Green looking for an exit strategy. He does not have access to any more funding, except season ticket sales, and one financial expert told Herald Sport that even with heavily-cut costs, without additional funding the business would face another "critical time for fresh financial failure" in February or March of next year. This often happens when underfunded bidders buy a business in administration that then falters again.
In reality, Green is unlikely to still be around at Ibrox by then. He may not even be involved soon into the new season. His talk of launching a shares issue before the end of the year on the AIM market is optimistic at best, and he is more likely to do a flip: having bought the business in administration, it is debt free and can quickly be sold again. If Green's consortium manages to raise the £5.5m purchase price, they could expect to double their money within a matter of weeks.
With three bidders seriously considering making new offers now, they will also be likely to view buying the newco Rangers from Green as worthwhile. There is little scope for Green and his investors to earn more if they remain at Ibrox for a significant period of time, particularly with possible sanctions looming from the SPL and the SFA.
Green has nearly pulled his deal off, but it might just be the prelude to another one.