A former Rangers administrator has insisted valuing the club brand was a "waste of money" after it emerged that it was effectively given away for nothing before being valued at £16m.
Paul Clark, who was one of the joint administrators of Rangers when the club financially imploded in 2012, has spoken out as he and David Whitehouse of Duff and Phelps are being made sued for £56.8m by Rangers oldco liquidators BDO which says their flawed cost-cutting strategy meant creditors lost millions from the handling of the club’s financial implosion.
The Court of Session has previously heard that the Rangers 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.
Administrators have admitted that they failed to get a valuation of the club brand before selling the Rangers business assets for just £5.5m to Charles Green’s Sevco consortium.
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.
The administrators have said their 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.
Mr Clark said he had been involved in several hundred insolvency matters during a 40 year career and could not recall engaging one valuation of a brand.
READ MORE: Ex-Rangers administrators fight 'bonkers' £56.8m 'shut club down' claim
Andrew Young QC for Duff and Phelps said: "It might be said some of the insolvencies would not be of companies with particularly prominent or recognisable brands, but equally were some of these insolvent companies which might be described as having a recognised brand?"
Mr Clark said: "I do recognise the point that of those several hundred very few would be what I would call high street names and they're widely known.
"But yes, although, for instance, I was not personally involved in it day to day, I haven't checked this for certainty but we we were involved in the administration of BHS (British Home Stores) and I am reasonably certain that we didn't conduct a brand valuation there.
"Now, it may be that some would say that was a brand that was towards the end of its sell by date.
"In my view, and in my experience... when you get someone, a professional person to value the assets it is an indication, the market determines value. To my mind, the brand valuation, would have been in my view, a waste of money because it wouldn't have actually told us anything. I say that accepting I am not a brand value expert."
Papers in the case reveal that while the Rangers assets were bought by Sevco for £5.5m, an independent fair value assessment to the company on the day of the purchase was put at £27.2m.
READ MORE: Rangers administrator denies Craig Whyte was 'calling the shots' in £5.5m Sevco sale
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.
Meanwhile Mr Whitehouse told the court that it was "absurd" to consider selling the club by getting rid of its "trophy players.
Kenny McBrearty QC for BDO suggested that the administrators should have sold players rather than just to secure wage cuts.
“Let me make clear the liquidators position to you Mr Whitehouse. It is that by making redundant playing and non playing staff, you could have achieved the same saving or more that you achieved with the wage reductions so that any player sales would have brought in additional funds - do you follow me," he asked.
Mr Whitehouse replied: “I disagree. it’s not my view.
“The only way you could have achieved that was to make the highest paid employees redundant.
“We would have absolutely hacked to pieces what was already a lean administrative and support cost basis and getting rid of a very high proportion of the playing squad and then sell what i call the ‘trophy players’ and be left with next to nothing in terms of quality players - for the purchaser to view that as attractive.. I think that’s absurd.”
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