Rangers being sued for £9.5m by Elite Sports (Hummel brand partner in UK)

I just thought of something else. How can a company who are in Administration take someone to court. If we actually win the case and they need to pay our legal costs they wouldn't be able to. Something about this seems dodgy as feck. We all said at the time that Ashley was involved with Elite somehow. He will probably buy the business and he will be pursuing us.
 
Bluebeard said:
Surely their lawyers would know this if, no disrespect meant here, someone with a Scotvec module in contract law like yourself knows it?
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If we entered into a contract with Elite that made them £X over a set number of years and we were not in a position to enter into that contract, we would wind up liable for the £X regardless of whether we stopped paying them or were forced to stop paying them. Upon entering the contract we were legally bound to ensure we were able to fulfil our obligations under the terms within, and a legal ruling against the club has proven we were not. The fact we should not have entered the contract in the first place does not magically get us off the hook on this, if anything it worsens the case against the club, and that is before we even mention the underlying implication from all these cases: We knowingly entered into contracts that were not possible to honour. I.E, fraud.
 
mart22 said:
As I understood it the contract we had with Elite/Hummel was dissolved by the judge during our court battle with Sports Direct.
How can we be accused of not performing a contract that was dissolved by a judge?
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They are seeking compensation for losses because they lost out from a contract forced to be dissolved because of our error.

Not exactly hard to work out, its why we are exposed to this because we have lost the first legal argument about the contract initially so they are suing for the consequential loss caused by that failed contract that they had no fault over.
 
Kinghornloyal said:
I just thought of something else. How can a company who are in Administration take someone to court. If we actually win the case and they need to pay our legal costs they wouldn't be able to. Something about this seems dodgy as feck. We all said at the time that Ashley was involved with Elite somehow. He will probably buy the business and he will be pursuing us.
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I suspect our lawyers will be putting that motion in as we speak.
 
Kinghornloyal said:
I just thought of something else. How can a company who are in Administration take someone to court. If we actually win the case and they need to pay our legal costs they wouldn't be able to. Something about this seems dodgy as feck. We all said at the time that Ashley was involved with Elite somehow. He will probably buy the business and he will be pursuing us.
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That is for the administrators to decide. If they believe there is a fair chance of bringing money in then they are duty bound to follow that path as their priority is to maximise the assets If they lose the case then the costs will come out of the pot available to the creditors
 
Fife flyer said:
That is for the administrators to decide. If they believe there is a fair chance of bringing money in then they are duty bound to follow that path as their priority is to maximise the assets If they lose the case then the costs will come out of the pot available to the creditors
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I'm about 95% certain that Rangers can request a judge makes Elite/any administrator place enough cash into escrow to cover our costs in the event of a Rangers win. That might be enough money for a complex case to make it unviable. Might.
 
Kinghornloyal said:
I just thought of something else. How can a company who are in Administration take someone to court. If we actually win the case and they need to pay our legal costs they wouldn't be able to. Something about this seems dodgy as feck. We all said at the time that Ashley was involved with Elite somehow. He will probably buy the business and he will be pursuing us.
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They have a very high chance of winning as we have already been judged to have entered the contract incorrectly.

They have suffered a loss because of it.

They are just needing to prove the level of loss.

Their exposure of them losing makes us a creditor who would need to accept pennies in the pound for our legal costs for an unlikely win. They would stand to gain millions or achieve a settlement with us out of court.

I would be surprised if they dont chase it, BDO chased others for costs as it is their legal duty to do so as administrators for the company.
 
LetsGo said:
3 years and it was ended after 2. And at that point we were told that we were free and clear of Sports Direct and also Elite.

The fact is that we have now paid £8m to SDI and are on the hook for another £9.5m to Elite. But Bisgrove is doing a great job, right?
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5 years for Elite, 3 years for Hummel, ended after 2 and those two years we couldnt actively do everything to promote them.
 
RangersEasyOK! said:
No judge ordered us to tear up the contract.

The £8m payment was because we never gave SD a chance to match it.
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According to previous poster I'm sure it was mentioned it was judge ordered us to tear up the contract but it's getting to be disheartening now
Someone should lose their job now
 
RangersEasyOK! said:
They are seeking compensation for losses because they lost out from a contract forced to be dissolved because of our error.

Not exactly hard to work out, its why we are exposed to this because we have lost the first legal argument about the contract initially so they are suing for the consequential loss caused by that failed contract that they had no fault over.
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So they get to write of £3million they owed us because it was dissolved, but can still sue without that money being brought into it? Seems odd.
 
GF1872 said:
So they get to write of £3million they owed us because it was dissolved, but can still sue without that money being brought into it? Seems odd.
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No they never got to write it off, we were old we cant pursue it because it would be a further breach of the failure to offer SD a match.

As we have lost the case then its an open goal for them to chase us for loss of earnings.
 
mart22 said:
I've got no experience in legal work mate. I took a short course in contract law at one time. It covered the basics. And it was utter drudgery. Really soul-destroying stuff.
The worst case scenario is Elite has a strong case and we really will have to pay them 9.5m. However, I'm hopeful capacity to contract is taken into consideration. Rangers were ordered to stop performing the Elite contract by a judge because legally we didn't have the capacity to contract with them. The reason being we didn't allow Sports Direct to match the Elite deal. Sports Direct was contractually given matching rights in their original contract with Rangers. If Rangers didn't have the capacity to contract with Elite then a legal contract never existed between us.
Kinda like a stolen car. If you buy one in good faith and the police turn up and return it to its rightful owner then there's nothing you can do.
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Thanks for explaining it
 
RangersEasyOK! said:
They have a very high chance of winning as we have already been judged to have entered the contract incorrectly.

They have suffered a loss because of it.

They are just needing to prove the level of loss.

Their exposure of them losing makes us a creditor who would need to accept pennies in the pound for our legal costs for an unlikely win. They would stand to gain millions or achieve a settlement with us out of court.

I would be surprised if they dont chase it, BDO chased others for costs as it is their legal duty to do so as administrators for the company.
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Where are you basing that assumption on?
 
RangersEasyOK! said:
No they never got to write it off, we were old we cant pursue it because it would be a further breach of the failure to offer SD a match.

As we have lost the case then its an open goal for them to chase us for loss of earnings.
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Fair enough, you seems to know more about this that me. Timing just seems very strange with the administration.
 
mart22 said:
I've got no experience in legal work mate. I took a short course in contract law at one time. It covered the basics. And it was utter drudgery. Really soul-destroying stuff.
The worst case scenario is Elite has a strong case and we really will have to pay them 9.5m. However, I'm hopeful capacity to contract is taken into consideration. Rangers were ordered to stop performing the Elite contract by a judge because legally we didn't have the capacity to contract with them. The reason being we didn't allow Sports Direct to match the Elite deal. Sports Direct was contractually given matching rights in their original contract with Rangers. If Rangers didn't have the capacity to contract with Elite then a legal contract never existed between us.
Kinda like a stolen car. If you buy one in good faith and the police turn up and return it to its rightful owner then there's nothing you can do.
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Thats really not the case here.

You are equating criminal law with civil and contract law.
 
RangersEasyOK! said:
The fact we have lost a court case for not offering SD a chance to match the Elite deal and had to pay £8m in compensation
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If they have a ”very high chance of winning” then why have they waited till they are on the brink of administration?
Im tending to suppose the opposite. They looked at it earlier and thought it wasn’t worth the risk, they now need to find capital to divert liquidation so are using this court case to claim they are potentially £9.5m better off.
 
TerryMunro said:
If they have a ”very high chance of winning” then why have they waited till they are on the brink of administration?
Im tending to suppose the opposite. They looked at it earlier and thought it wasn’t worth the risk, they now need to find capital to divert liquidation so are using this court case to claim they are potentially £9.5m better off.
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They waited for the court case with SD to finish as it gives them the basis of their case.

The action was started earlier, they and their administrators also had a duty to chase down any money they thought they would be due.
 
Kinghornloyal said:
I just thought of something else. How can a company who are in Administration take someone to court. If we actually win the case and they need to pay our legal costs they wouldn't be able to. Something about this seems dodgy as feck. We all said at the time that Ashley was involved with Elite somehow. He will probably buy the business and he will be pursuing us.
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Rangers oldco administrators did the very same thing, so must be Ok to do.
 
ibroxbound said:
I assume the profit will be calculated minus any commision that would have been made to Rangers for the sale of the items.
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Yes, for sure, it will have to be a proper and justified attempt at what the financial outcome would have been for Elite if the (alleged) breach of contract hadn’t happened and they delivered on their contract - it will need to factor in all elements that would have applied if the contract wasnt terminated. The next number put forward by Elite (once they have the sales figures) will still Inevitably be on the higher end of the scale but any attempt at totally frivolous numbers would piss off the judge rather than serve any positive purpose for Elite. The next number presented to the courts by Elite will be the worst case position for us and I would still expect that to be much lower than the current headline figure of £9.5m. As I said in a previous post, I don’t expect much of an additional hit to our financials beyond what we’ve already factored in.
 
FrazerK80 said:
Yes, for sure, it will have to be a proper and justified attempt at what the financial outcome would have been for Elite if the (alleged) breach of contract hadn’t happened and they delivered on their contract - it will need to factor in all elements that would have applied if the contract wasnt terminated. The next number put forward by Elite (once they have the sales figures) will still Inevitably be on the higher end of the scale but any attempt at totally frivolous numbers would piss off the judge rather than serve any positive purpose for Elite. The next number presented to the courts by Elite will be the worst case position for us and I would still expect that to be much lower than the current headline figure of £9.5m. As I said in a previous post, I don’t expect much of an additional hit to our financials beyond what we’ve already factored in.
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Still a shitshow for our board to get into this mess but at least this one will draw a line under it.
 
blueballsbear said:
it doesnt stop the claim no, but they are claiming for a years revenue that they couldnt fulfil as they have gone to the wall
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Which they can argue the failure to uphold the contract contributed towards the failings of the company and the loss.

They can and will still be claiming for the full contract value, what happened to them after we broke the deal with them is irrelevant really in what they are arguing.

We probably have a clause for no consequential loss but we do have a liability for the loss of revenue for the full contract
 
RangersEasyOK! said:
Which they can argue the failure to uphold the contract contributed towards the failings of the company and the loss.

They can and will still be claiming for the full contract value, what happened to them after we broke the deal with them is irrelevant really in what they are arguing.

We probably have a clause for no consequential loss but we do have a liability for the loss of revenue for the full contract
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if the loss of one contract put them under, then they shouldnt have bid it
And we should not have awarded it of they were that financially unstable
 
RangersEasyOK! said:
It wasnt, you seem to be struggling to grasp that they are suing because of our failures.

No fault of theirs.
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no they are correct to sue
you are missing the point, that if the loss of a single contract in effect put them down then they should never have take n that on, and with them being down then they couldnt have fulfilled it anyway.
I dont disagree that they should be compensated but 9.5m, I dont think so
 
blueballsbear said:
no they are correct to sue
you are missing the point, that if the loss of a single contract in effect put them down then they should never have take n that on, and with them being down then they couldnt have fulfilled it anyway.
I dont disagree that they should be compensated but 9.5m, I dont think so
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Think the value is plucked a bit but ultimately its an argument they want to make and looking for the Castore sales figures to justify their claim
 
Looks like we are still the cash cow for Tom Dick and Harry?
We must have the worst business men in Britain on our board of directors.
It's high time we got rid of the car salesman and his boardroom parasites?
 
If the people or person who entered these contracts are still at the club, they should be fired without delay

Our legal and compliance activities under the new board are a Complete and utter shambles …. incompetence of the highest order :mad:
 
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