Cohen & Stephen (The Liquidators of Rangers FC) & Ors v Collyer Bristow
Late 2013, 5-10 days, Chancery Division
For the claimant Cohen & Stephen (The Liquidators of Rangers FC):
For claimants the Trustees of the Jerome Group plc Pension Fund:
Outer Temple Chambers’ David E Grant, instructed by trustees David Simpson, who is also a qualified barrister
For the claimants HMRC:
South Square’s Lucy Frazer
For the claimants Merchant Turnaround:
Maitland Chambers’ James Clifford and Matthew Smith of the same set, instructed by Macrae & Co’s Julian Turnbull
For the respondent Collyer Bristow:
3 Verulam Buildings’ Cyril Kinsky QC leading Matthew Hardwick of the same set, instructed by Clyde & Co partner Richard Harrison
The financial collapse of Rangers FC put in the public eye the club’s relationship with its professional advisers, including Collyer Bristow and former partner Gary Withey.
Withey quit the firm in March after he became embroiled in the Glasgow club’s administration because he had advised businessman Craig Whyte on his takeover of the club in 2011.
Duff & Phelps were appointed as the original administrators of the club and, in March last year, announced it would take action against the firm.
When liquidators Cohen & Stephen took over the wind-down of the club it pledged to carry on the case. The firm has lodged a Part 20 claim against private equity firm Merchant Turnaround.
Collyer Bristow stands accused of “deliberate deception” over Whyte’s doomed bid for the club.
The court heard at a pre-trial hearing in April that Collyer Bristow is alleged to have been involved in conspiracy, breach of undertaking, negligence and breach of trust, with Withey – who acted as the club’s company secretary – complicit in the allegations.
It was revealed that when Whyte agreed a majority stake takeover offer in May 2011 he also pledged to pay off the club’s £18m debt to Lloyds Banking Group and invest £9.5m of “new money” in the club. This included £5m for players, £2.8m to HMRC and £1.7m for capital expenditure.
That offer persuaded then director Paul Murray and the board not to launch an alternative £25m share issue to generate the money needed to stabilise the club. Instead, the court was told, they agreed to Whyte’s takeover, with Collyer Bristow acting for Whyte.
Administrators were called in February 2012 and various parties – including HMRC, private equity firm Merchant Turnaround and Jerome Pension Fund trustees – lobbied to reclaim their stakes in Rangers.
The firm says it will vigorously defend the claims. Withey had originally applied to intervene in the case, but has now withdrawn his application.
This battle will be closely followed by firms and fans alike as it promises to lay bare the firm’s relationship with Whyte and the club.