Key Rangers administrators' manager defends club brand 'giveaway' to Charles Green's Sevco

While some within Duff and Phelps, the company responsible for guiding the club through its insolvency were pushing for a brand valuation, it has previously emerged it was dropped in a matter of days with one manager saying it had been considered “a waste of money”.

The brand, which includes the ability to use the club’s name, trademarks and logos for financial gain, and is used in all its merchandising was effectively sold for nothing.

An assessment carried out by an independent finance expert on the day of the Sevco purchase and commissioned by the new owners put the value of the brand alone at £16m.

READ MORE: Rangers sale 'betrayal' over £14m failed assets bid — before £5.5m sale to Charles Green's Sevco

But Ms Bell, a managing director of Duff and Phelps, has told the Court of Session that the allegation that administrators did not take the Rangers brand into account when making a decision to sell to Sevco was "entirely unfounded and misconceived".

The liquidators of the club BDO are suing the joint administrators of the club David Whitehouse and Paul Clark of Duff and Phelps for £56.8m saying a flawed cost-cutting strategy meant creditors lost millions from the handling of the club’s financial implosion.

Mr Whitehouse and Clark are defending the action by claiming the liquidators expected a “bonkers” strategy of a ‘fire sale’ of Rangers which would have “effectively shut the club down for good”.

The administrators have said the idea was to present “a functioning working club” and to rescue it as a going concern so that it could be sold to prospective purchasers.

The action comes nine years after the Craig Whyte-controlled Rangers business fell into administration and then liquidation leaving thousands of unsecured creditors out of pocket, including more than 6000 loyal fans who bought £7.7m worth of debenture seats at Ibrox.

Papers lodged in the case show that the brand ‘giveaway’ formed part of a a wider analysis that revealed that assets were sold for at least a fifth of its fair value.

An agreed fact in the case is that on March 16, 2012 Duff and Phelps decided to pause the start of any work on preparation of a brand valuation report.

Papers in the case reveal that while the Rangers assets were bought by Sevco for £5.5m, an independent fair value assessment to the group on the day of the purchase was put at £27.2m.

READ MORE: Rangers FC brand was not valued before being sold for nothing

Accountant James Saunders, a managing director with Duff and Phelps, previously agreed that that meant that the administration team did not know the valuation of the brand on a going concern or on a liquidation basis.

Ms Bell said that from the beginning of the administration it was not thought that a valuation of the Rangers brand was applicable because they felt there was only ever any value from it if it was sold as a going concern.

She said the market would then dictate that value.

"I understand that the liquidators have a introduced a new criticism in that the Duff and Phelps team did not adequately take the value of the company's 'brand' into account when making decisions, ultimately, the decision to sell the company for £5.5m," she said in her statement.

"I think this allegation is entirely unfounded and misconceived.

"Firstly, in terms of brand merchandise, I do not accept that this was a valuable asset except where there was a Rangers football club playing.

"The company had already sold on the most valuable rights to JJB Sports before the appointment of joint administrators. "We did look at the remaining merchandising rights but these were very limited and quite obscure, for example the rights to old film reels of the team playing.

"Even if we had been able to sell these, it would not have made any real difference to the overall position.

"Overall, the value of the 'Rangers brand' was intrinsically linked to having an active and successful football club.

"If the company was placed into liquidation without a going concern sale, then the brand had next to no value."

When questioned further in the Court of Session by Kenny McBrearty, QC, for BDO about why they would not have had tried to value the brand so they knew what it was worth in a sale, she added: "The situation in a going concern or 'distressed' sale makes it very difficult to actually put a value on it".

Mr McBrearty said: "That may be exactly the question that someone specialist in valuing brands, will be able to tell you isn't it?"

Ms Bell said: "Yes."

Mr McBrearty went on: "I mean, you don't value brands for a living, do you."

Ms Bell said: "I don't personally, no."

Mr McBrearty added: "And neither did any of the administration team?"

Ms Bell said: "No."

The QC went on: "So the decision was taken not to get a brand valuation, and the result was that you didn't know whether it was possible to attribute a value to that constituent part of the assets on a going concern basis."

Ms Bell said: "I think with the experience that the administration team had we were as confident as we could be that it was not worthwhile obtaining a valuation, at that stage."

In an extended debate, Mr McBrearty said: "The simple point is really, Ms Bell, is that the only person who could tell us whether the brand is worth anything... is someone who values brands for a living. And so when you expressed the view that you do... that if the company was placed into liquidation without a going concern sale, then the brand had next to no value, I don't mean to be disrespectful but you're not qualified to make that statement."

Ms Bell said: "Well, what I'm saying to you is that I have experience of dealing with companies with brands and that is my view."

Mr McBrearty suggested that if an internal expert in brand values, had given a different view she would have been bound to accept that.

"We would have been bound to consider it," said Ms Bell.

"You would be unlikely to dismiss the views of someone within Duff and Phelps' own valuation team whose specialist area was valuing brands, would you," added Mr McBrearty.

"I didn't say 'dismiss' I said we would consider it," said Ms Bell.

While just ten of the star players including striker Steven Naismith, goalkeeper Allan McGregor, midfielder Steven Davis, and defender Steven Whittaker were valued at £21.35m after the club went into insolvency - they ended up being bought for just £2.75m as part of Sevco’s £5.5m purchase. BDO’s representatives described that as “some way short”.

Ibrox and Murray Park were snapped up for £1.5m in the deal, but a fair value assessment, carried out by an independent valuer was £6.5m.

But at the time of the purchase, there had been no licence to play football so the Ibrox and training facility valuation had been downgraded. A subsequent valuation priced the stadium and Murray Park at £80m.