Rugger Guy looks at the Court of Session ruling

I asked my egg chasing buddy in the Square Mile for his take on the ruling today in the Court of Session.

This is what he sent me:


Phil, I am writing in answer to your request to consider what the ramifications are in respect of today’s court ruling.

My first thought is that as we have not had a formal response by Mr King, then the conclusion is not 100% crystal clear. However, it is probably worthwhile considering the implications based on two outcomes.

  1. Mr King complies with the ruling.
  2. Mr King does not comply with the ruling, (I may be mistaken but do not think there is any recourse remaining in terms of further appeals).

Should Mr King agree to the court order, despite claims of being penniless, and makes a formal offer for the remaining shares that are owned outside those of the “concert party.”, he will have to produce an offer document which will cost comfortably in excess of £1m.Of more concern for Mr King is that the level of disclosure is substantially more detailed than those of the financial accounts, and requires to be signed off not only by accountants but lawyers and financial advisors. Full disclosure of all contingent liabilities, not just those that Mr King considers to be material, will be required and all of the issues regarding relevant necessary repairs to the ground etc… Must be disclosed. Full cash flow requirements of the business coupled with potential contingent costs will, in my opinion, lead to the conclusion that THE SHARES ARE WORTH CONSIDERABLY LESS THAN 20P.

I suspect that there may well be public relation exercises taken to try and talk up the value of shares coupled with the emotional attachment to supporters to hold on to their shares, but on an objective clinical analysis, it will be self-evident that a 20 p offer is considerably more than what the shares are worth. IN THE EVENT OF AN ADMINISTRATION EVENT, the shares are Worthless, all the control will pass on to the creditors, not the shareholders.


Should Mr King not agree to the court order, this also opens up the proverbial “can of worms”.

Firstly, contempt of a court order could result in a custodial sentence. Should Mr King remain as a director of RIFC, then the company will suffer all the cold winds emanating from financial cold-shouldering. All professional companies, lawyers, accountants, financial advisors, banks, financial companies etc… would have to disassociate themselves from the company, rendering their ability to trade normally being severely compromised. In addition, should Mr King resign in order to mitigate the risks associated with financial cold-shouldering, and revisiting his impecunious state, it raises an enormous question over the accuracy of the recently published financial accounts. Mr King through his NOAL investment is the only remaining lender of last resorts and the going concern status of the company is dependent fundamentally on his financial support. I would imagine that the auditors of RIFC are following events very closely indeed.

When you asked me to analyse the recent financial statement of RIFC, I signed off by saying the situation was very precarious. As of today, the situation is considerably worse, RIFC is staring over the edge of a cliff.

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