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Rangers 'made financial incentives' for Bain case help

21 October 11 13:03
Martin Bain

Martin Bain's lawyer has claimed that Rangers offered "financial incentives" for help in a court battle against its former chief executive.

Nicholas Ellis QC's comments came during a hearing at the Court of Session in Edinburgh.

Mr Bain is pursuing a £1.3m damages claim against his former employer over alleged breach of contract.

Rangers is contesting this and has made a counter claim alleging breach of fiduciary duties, which Mr Bain denies.

The former chief executive raised his damages claim following the takeover at Rangers FC by venture capitalist Craig Whyte from former owner Sir David Murray.

Last month, Mr Bain successfully applied to have £480,000 of Rangers assets ring-fenced pending the outcome of his case.

Judge Lord Hodge granted the move over fears the club could go bust before his case is heard in full.

Insolvency risk

He said there was a real risk of insolvency over a disputed £49m tax bill facing the club.

Earlier this week, Rangers' former financial director Donald McIntyre, who is also suing the club alleging breach of contract, was granted an order freezing £300,000 of assets on the same grounds as Mr Bain.

During the latest hearing on Friday, Mr Ellis QC told the court that Mr Bain was anxious to make progress with his damages action because of "what might be described as the parlous financial state" of the Ibrox club.

Mr Ellis said that if Rangers "go into some sort of insolvency arrangement" then Mr Bain's claim would be defeated as he would be at the back of the queue of creditors.

The senior counsel said it was feared that the ex-chief executive's claim would suffer "a technical knock out" because of a lack of resources at Rangers to make payment if he succeeded in the court case.

Judge Lord Menzies raised with him that Rangers indicated they were being hampered because of emails being deleted from a computer.

Mr Ellis said: "The pursuer (Mr Bain) did not delete any emails from his computer. He is aware his secretary, not at his request, but of her own volition, deleted some emails."

The QC said she explained she went through all the emails on his computer at work and "deleted all emails personal to him" including those over the death of his father.

"She explains she did that after the takeover of Rangers in the expectation that Mr Bain would not be remaining in his employment with Rangers," he said.

Mr Ellis said it was not a block deletion of messages and added: "It cannot be correct to say there are two years' emails missing.

"Even if it were possible for an IT expert to reconstruct the emails, which may be the case, again there has been plenty of time for that to be done."

He told the court: "We know the defenders have trawled about trying to find matters in relation to the pursuer that they can characterise as a breach of contract.

"On our information they have offered financial incentives for assistance in the case against him," Mr Ellis said.

"Mr Bain is anxious to make progress because of what might be described as the parlous financial state of the defenders.

The QC added: "The cash position is just going to get worse in the season, particularly as there are no European games the club can rely on for income."

Full hearing

Alan Dewar QC, for the club, said an IT expert had been instructed to investigate the emails situation.

He said: "It may be the defenders have of necessity had to take time to come to grips with the material and to work out what additional material there may be and to take steps to bring about the discovery of that material."

He said the counter claim brought by Rangers was in "relatively skeletal form" and it was intended to expand it quite considerably.

Mr Ellis asked Lord Menzies to reserve dates for a full hearing of the action and the judge agreed to set aside three weeks of the commercial court's time beginning on 24 July next year for the case.

The judge said: "It seems to me that there is force in what the pursuer says that he should be entitled to a proof diet as soon as possible."

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