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By Tom Winnifrith | Friday 2 October 2015
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
One of the joys of being in London is that folks come to see me from the Square Mile bearing documents of great interest. I shall not name my City Source. But I have obtained documents showing why the £10 million claim by Law Financial against Rangers (RFC) is utterly bogus, that Worthington (WRN) knows it is bogus and how Worthington boss Doug Ware tried to line his own pockets in an obscene fashion at the expense of Worthington going behind the back of poor Aiden Earley and Craig Whyte.
The documents I now possess are from 7 June 2013. On that day Worthington CEO Doug Ware contacted the then Nomad to Rangers FC, Cenkos, offering to settle the outstanding Law Financial litigation which you will remember that Worthington values at £10 million. Ware stresses that Whyte and Earley know nothing of his approach and asks the Cenkos chappy (Jim Durking) not to reveal what is proposed.
Ware admits that Worthington is on the “point of an insolvent liquidation”. That rather contrasts with what Ware was telling investors via RNS statements. And on that basis he offers to sell Law Financial to Rangers for just £475,000 in cash to make the problem go away.
Actually that would not be £475,000 because Rangers would have been given – as part of this deal - £345,000 of convertible loan notes which came with a first charge on the one assets Worthington then owned that had any value – its old factory in Keighley Yorkshire which was worth c£500,000. And so the net cost to Rangers to get rid of this litigation would have been just £130,000 – for that it would have owned all of Law Financial.
There are however a few other conditions. Ware suggests that an independent tribunal look at the claim and if it is worth any more the difference be paid inRrangers shares at a later date.
Ware also asks for a few other minor matters. Notably that he be appointed as a Non-Executive Deputy Chairman of Rangers (RFC) on a salary of £120,000 per annum plus expenses plus a golden handshake payment in cash up to the non-taxable limit plus a share option deal on a par with the executive directors of Rangers. Oh and that Doug’s pal from Worthington Richard Spurway should also get a £150,000 one off payment in the most tax efficient way or be employed at £40,000 per year until retirement and that Spurway get 500,000 share options in Rangers as well.
My source confirms that Cenkos was not greatly taken with this proposal.
So what does this tell us?
1. Doug Ware is a greedy bastard who wished to line his own pockets at the expense of shareholders in Worthington. Those shareholders – including poor Aiden Earley and Craig Whyte – should sack him at once.
2. Worthington was insolvent but neglected to tell its shareholders this as it should have done under LSE Rules
3. Worthington was happy to sell its claim for just £130,000 in cash plus perhaps a few Rangers shares at a later date. Yet it has repeatedly insisted that its claim is worth £10 million. Of course it is not. The claims are groundless as we all know.
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