Rangers liquidation: FAQ
The fallout from HMRC’s rejection of the Rangers CVA has, of course, only just begun. Journalists and bloggers, us included, will be spending a considerable amount of time speculating wildly about the likely outcome of the club’s now-inevitable liquidation. So let’s quickly take stock of what’s fact and what’s guesswork.
(Please bear in mind that Wings Over Scotland is not a lawyer, and that your house may be at risk if you don’t pay tax on it for 20 years.)
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MYSTERIES WRAPPED IN RIDDLES WRAPPED IN ENIGMA
Will creditors now receive any money?
As things stand, no. If Duff & Phelps are allowed to sell the club’s assets to Charles Green’s consortium (Sevco), the £5.5m price will be entirely swallowed up by D&P’s fees and legal costs, leaving not a penny for any of the creditors.
Will there be a newco Rangers playing football next season?
In theory. The creditors, however, may mount a legal challenge to the fixed-price sale to Sevco, in an attempt to force the assets – chiefly the stadium and training ground – to be sold on the open market in the hopes of obtaining a better return. As the creditors have literally nothing to lose (see above), this seems a likely outcome, particularly as Duff & Phelps don’t appear to have any authority to act as liquidators (as opposed to administrators) in the first place.
Any challenge to the sale of the club’s assets to Green will – at the very least – greatly slow the process of forming a newco, almost certainly beyond the start of the 2012-13 season. And in such circumstances the assets might be bought by a new owner for purposes other than running a football club.
One thing IS known – under the CVA document, Green’s purchase is conditional on Rangers continuing to play in the top division of Scottish football. Since the failure of the CVA and the liquidation of the club means that no such guarantee can be in place by Thursday, the “binding obligation” on Green to complete the purchase seems meaningless. This would open the way to previous bidders, such as the “Blue Knights” group, to attempt to form a newco, as well as to potential non-football purchasers such as property developers.
Would a newco Rangers be admitted into the SPL?
Nobody knows. Recent comments from other SPL chairmen suggested a hardening of the other clubs’ attitude towards a newco Rangers entering the league, as a result of the club appealing its transfer ban at the Court of Session and feedback from angry supporters. However, it’s been speculated that Charles Green will negotiate a vote in favour in return for an alteration of the SPL’s 11-1 voting rules, enabling the smaller clubs to secure a greater share of revenues both from TV contracts and gate receipts.
The attraction for the other 10 clubs is obvious – they get to keep the lucrative Sky/ESPN deal, but get a bigger share of the money, and still get most of the benefits of Rangers being expelled because the newco will be enormously weaker than the existing club. Any such deal would be chiefly to the detriment of Celtic, but the Parkhead club could be outvoted.
(Trivia fact: the oldco Rangers would still hold an SPL share, and would therefore get a vote in whether or not to accept their replacement by the newco. An 8-4 majority in favour is required.)
What happens to the Big Tax Case?
As far as the football club goes, the BTC is effectively dead. HMRC’s press statement says that the CVA was rejected specifically to better enable the pursuance of action against those responsible for Rangers’ tax evasion, which is bad news for David Murray, Craig Whyte and the other members of the Rangers board over the last decade or so.
What happens to the SFA’s dual-contracts investigation?
Theoretically, the same would apply. Since Rangers FC will no longer exist, there’s little point in the SFA continuing with its probe. However, this could depend on the terms of acceptance of any newco Rangers into the Association. Most pundits are saying that a newco’s admittance to the SFA would be conditional on it accepting punishment for dual contracts if found guilty, but it also seems well within the realm of possibility that the SFA could accept the newco Rangers with a clean slate, as those responsible for any wrongdoing would not be part of the new club.
And the Appellate Tribunal’s new sanctions on the disrepute charge?
See above.
Is the £5.5m Charles Green wants to buy Rangers’ assets with a loan, to be paid back by the new company?
Nobody seems to know. As the £8.5m he was providing for the CVA was a loan to be repaid with interest, it seems likely the same would apply to the £5.5m.
What? So he was essentially planning to buy the club with its own future revenues rather than putting up any cash of his own? In that case, can I bid £100m on the same basis?
It’s hard to see why not. Give it a try!
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KNOWN FACTS
Would any newco Rangers be banned from playing in European competitions for three years?
Yes. This is a non-negotiable penalty under UEFA rules for clubs which undergo liquidation, and new clubs cannot enter UEFA without three years of accounts.
Would the playing staff be automatically transferred to a newco?
No. Players’s contracts are terminated by the liquidation of the employer. They CAN switch to a newco club which might arise, but they are free agents who can walk away if they choose to. It’s hard to imagine why any would voluntarily move to the newco, given that it would be financially stricken, unable to pay their previous wages (though technically it would be legally obliged to), and offer the players no prospect of European football.
Could a newco Rangers retain its history and honours roll?
On the face of it, absolutely not, even if the SFA wished to allow it. Insolvency law expressly forbids any “phoenix” company* from passing itself off as the old company, and retaining Old Rangers’ league titles and cup wins would plainly appear to be implying that the new and old clubs were in fact one and the same. For the same reason, it could not – despite what both Duff & Phelps and Green are currently claiming – be allowed to compete under the name “Rangers”, although related names such as “Glasgow Rangers” might well be permitted.
Also, as touched on above, treating New Rangers as a continuation of Old Rangers would force the SFA to continue the dual-contracts investigation, and were the club to be found guilty (as seems overwhelmingly likely) the SFA would have little option but to expel New Rangers from the Association. In the meantime, of course, it would also have had to impose whatever penalty the Appellate Tribunal laid down for the disrepute charge, which is likely to be at least a suspension, effectively killing the newco at birth.
* As not-lawyers, the one thing we’re not entirely clear about with regard to the naming of a phoenix company is whether the rules apply if the directors of the new company are completely different to those of the oldco. Anyone better informed than us, feel free to clarify.
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Any questions we haven’t covered? Feel free to ask below and we’ll do our best to answer them. Anything we’ve got horribly wrong? Point it out and we’ll fix it.
I don’t quite understand how Duff & Phelps can have agreed a binding deal with Green about purchasing the assets given that they’re not the liquidators (BDO are). Will BDO be bound by any deals made by D&P?
I don’t see how BDO can possibly be bound by the arrangement between Green and D&P, unless the creditors agree. And they have absolutely no incentive to do so.
From tweets i’ve seen, its seems that now that the liquidation is underway and there will be a more forensic (as said by alex thompson) view on the whole Murray, Whyte and board. I hope that Mr Ogilvie will be included in this as his continued position is untenable (has been actually since the whole EBT thing came out)
RFCs strategy for success over the past 12 years or so has been exposed as little more than a series of short term tactical ploys that have led the club to ruin. In short, a house of cards was built. The SFA and SPL have a hard question to ask themselves…”what is the strategy to advance football in the country?”
In short, what is the overarching blueprint for success for the ext 25 years?
Surely, any nods to those that insist the game needs to keep Rangers in the top flight will be doing little more than showing us they have little more to offer than promulgating the tactics of failure and short termism. Rangers ruin is not ruin for the game – noting such is what led RFC to their current collapse; it reflects everything that is wrong with the game in Scotland. It is time to stop the rot and time to start the new approach.
Time for clarity, honesty, transparency, accountability, disclosure and defined steps to be put in place. It is time to remove RFC from the discussion ASAP. We need to refocus the conversation surrounding success in Scottish football.
In short, it is time to move past this story. Let RFC do what they want and allow them to reenter the game via normal process. The SPL and SFA have a unique opportunity to start again – lets hope they seize it.
why is the fact that you need 3 years annual accounts to enter division 3 being ignored by everyone? were all getting screwed one way or another here, i like most, just want the rules adhered to ie. 3 years in junior football leagues before attempting to enter division 3.
“why is the fact that you need 3 years annual accounts to enter division 3 being ignored by everyone? “
Because in almost all instances the SPL/SFL rules allow the governing body to grant exemptions at its discretion.
games a sham, i wont be back neither will my son or daughter if sport isnt on the agenda. 1 rule for all!
Got to be honest grudge1903 (fellow Dons fan, per chance?), I’m quite happy for Rangers to start in Division 3. The Rangers we all know and despise are about to have their life support switched off, so there’s no need to kick them while they’re down. The minimum of three years they’ll spend outside the SPL will be long enough to prove the theory that Rangers are not essential to the survival of Scottish football, and thus remove their power even when they do get promoted back up.
I’m pretty keen on the wrongful player registration investigation being completed and them having their silverware taken off them, though. They’ve been cheating for well over a decade, and do not deserve to have their name on those trophies.
If Green buys the assets for 5.5 million we all know Ibrox and Murray Park would be two of the assets in the deal but other than them what other assets are involved?
I’m not sure I Can’t Believe It’s Not Rangers would progress through the SFL quite as quickly as everyone thinks. They’d be stony broke and starting from scratch, and their fans are famously disloyal in times of thin pickings successwise. (Though in fairness I think the special circumstances would make a few more stick around.)
And how many top players are you going to attract with the prospect of glamour ties against Annan Athletic and East Stirlingshire?
“If Green buys the assets for 5.5 million we all know Ibrox and Murray Park would be two of the assets in the deal but other than them what other assets are involved?”
Very little, other than the leasehold on their large car park.
im sure a few highland league teams, junior teams wanting access to the sfl will be spitting feathers, being leapfrogged by a club with a history of sectarian signing policy, cheating, bringing the game into disrepute and basically being the most corrupt organisation in the history of scottish sport.
all the while these wee teams have been run within the rules and are trying to meet the correct criteria.
Rev. Stuart Campbell says:
June 12, 2012 at 3:58 pm
“why is the fact that you need 3 years annual accounts to enter division 3 being ignored by everyone? “
Because in almost all instances the SPL/SFL rules allow the governing body to grant exemptions at its discretion.
Discretion?
Whose discretion?
Cambell Ogilvie’s?
Neil Doncaster’s?
The governing bodies of Scottish football need tread carefully in any regard requiring discretion.
“im sure a few highland league teams, junior teams wanting access to the sfl will be spitting feathers, being leapfrogged by a club with a history of sectarian signing policy, cheating, bringing the game into disrepute and basically being the most corrupt organisation in the history of scottish sport.”
I’m sure they would, and rightly so. But let’s be absolutely fair – nothing’s happened so far. It may yet be the case that in the light of all the messy stuff that’s still to come, the SFA/SFL might decide to keep things simple and tell Rangers to sling their hook altogether.
Do Rangers FC (deceased) still get a vote on the board of the SPL?
This has been puzzling me….
How can an entity, which effectively no longer exists, still have a say on whether or not it remains in one form or another in the SPL
As noted in the article, yes they do. Bust or not, they hold the SPL share until such times as it’s transferred to someone else.
Surely if all LOYAL Rangers fans stump up £300 each, we can offer more than This GREEN Character and this get the club bought without being in massive Debt
Who is with me!
Hello?
Hellooooo?
Apologies for my ignorance here.
What is the difference, if there is one, between Rangers going into Division 3 and what happened to the likes of Livingston and Gretna?
If my over stretched brain cell is working correctly both Livingston and Gretna were, unceremoniously, kicked out of the SPL and both ended up in Division 3.
Oh yeah Rev.
What’s wrong with playing Annan or East Stiling?
Don’t you know Annan almost got into the play offs again. 😆
Rangers clearly ought to suffer the same fate as Livingston and Gretna for being liquidated, quite aside from any other crimes. That there’s even a debate over whether they will or not shames Scottish football.
And hey, Annan and East Stirlingshire should be flattered that they’re the only Division 3 sides anyone can name 😀
The BBC, as in Reporting Scotland, are talking as though the Green purchase of the assets of RFC will go though and there is no mention of BDO in name except to say that the Liquidator will be looking closely as to how RFC got into this situation and the part certain individuals had to play in the debcle.
Rev.. I raise you ‘Montrose’ lol
East Stirlingshire sell great pies in their cafe and have a nice wee ground so it’s not all bad news for Rangers. Apart from the bloke who takes his drum to all the games and makes a racket.
If Rangers are stripped of their titles for last 10 years will Dundee United be awarded the cup from a couple of years back when Boyd dived and won them the game at Hampden ?
@ Rev. Stuart Campbell
Hey, there’s Queen’s Park too. Do they still play at Hampden Park in front of nobody?
daneel, how can Queens Park play in front of nobody, I’m sure Annan send at least ONE bus load of supporters to Hampden when THEY play there 😀
do not diss the Spiders
Who me?
I aint dissing no one Random.
I’m the last person to diss ANY football club. After all what do I know, apart from nothing! 😀
According to The Guardian, the CVA will be put to a nominal vote on Thursday, then:
‘After that, Green, who has said his backers include some offshore trusts, of investors based in the Far East, will buy Rangers’ assets for £5.5m. That will happen “as soon as the CVA proposal is formally rejected”‘
What I completely fail to understand is why this is happening in such haste. Surely the creditors would be better served in a liquidation to have an auction of these assets, rather than one bid? There’s no necessity to consider the football club as a going concern, so why not sell off Ibrox for development?
Grant..
They reckon Ibrox etc is in a poor area with limited potential for redevelopment. The cost of demolition and putting in housing would be too high. Especially with the crash in the market and the coming depression / chaos.
Selling as a going concern with 50,000 supporters paying £500 a year is far better for future tax revenue for the govt.
“They reckon Ibrox etc is in a poor area with limited potential for redevelopment. The cost of demolition and putting in housing would be too high. Especially with the crash in the market and the coming depression / chaos.
Selling as a going concern with 50,000 supporters paying £500 a year is far better for future tax revenue for the govt.”
This may well be true (though it comes with many qualifications, such as whether Rangers will be expelled from the SFA, whether 50,000 fans will continue to show up to watch a weakened team, whether they could charge £500 for season tickets in Div 3, whether the area would become more attractive specifically because it wasn’t infested with hordes of Rangers fans every other weekend, etc etc), but with the administration having failed to save the club the liquidator now has one duty and one duty only – to maximise the return for the creditors.
Unlike the administrators, the liquidator has NO duty to keep the business alive – that approach has already failed. If some developer is willing to take the risk on Ibrox and bids £6m for it, the liquidator’s responsibility and obligation is unequivocally and unambiguously to accept their offer over one of £5.5m from Charles Green.
And what about the player contracts…shouldn’t they be liquidated too, rather than transferred to newco where they can walk away if they want?
There was some suggestion that early on the Treasury was putting pressure on HMRC to keep the football club going; I hope this isn’t the reason other creditors are being shafted by a stitch up between Green and the administrators.
The Telegraph say that BDO are hard negotiators…but what’s to negotiate if the administrators can take all of the assets and sell them, after the company has moved from administration to liquidation? All that will be left to liquidate will be a shell.
Radio Scotland reporting that 2 new bids have come in for the assets.
What a mess.
I am glad to see Rangers liquidated, it restores my faith alittle. I did expect them to walk away from this unscathed. I hope the SFA and the other clubs do the right thing and preserve sporting integritty by relegating Rangers to Div 3, and I hope Rangers fans get a new club that serves them well. Rangers fans are not to blame for this, but they are the ones hurting most. I’m sure Craig Whyte and David Murray hardly even think of Rangers, but thiersupporters, not only think about them every minute of every day,but are kept awake at night worrying about thier club. These people Deserve better. And Murray and Whyte deserve jail time. (Wasn’t it tax evasion Al Capone ended up in prison for???)
I think Starting in division three and EARNING the right to play in the SPL will go some way to making up for cheating thier way to nine in a row.
Everyone says the Rangers fans aren’t to blame, but aren’t they? Hardly any of the fuckers turned up in the 80s when Rangers were shit – the only way Murray could get them through the turnstiles was by buying success at any cost.
It’s a bit worrying that anyone could buy any football team and cause this sort of chaos. Something needs sorting out.
In the meantime, it’s an interesting show.
And the fat lady isn’t singing yet.
“Hardly any of the fuckers turned up in the 80s when Rangers were shit – the only way Murray could get them through the turnstiles was by buying success at any cost.”
Ooohh dear a wee bit of bile spurting out there, quick break the glass and get the Gaviscon….how are those attendances trending up in Aberdeen over the last few years ? Doesn’t seem so long ago they managed to avoid relegation by throwing Falkirk under a bus based on a technicality on stadia….not quite sporting etiquette but it’s different for the Dons of course as they are special.
Those Rangers fans are crazy fuckers, imagine them craving success for their team. What is it with those huns. It must be Aberdeen’s turn soon….surely.
On the positive side when the Gers are in SPL3 or defunct then you won’t be sweating about the league split every year, you should make top half most of the time.
“Ooohh dear a wee bit of bile spurting out there, quick break the glass and get the Gaviscon….how are those attendances trending up in Aberdeen over the last few years?”
When Aberdeen were involved in a relegation play-off with Dunfermline a decade or so back, average attendance at Pittodrie that season was HIGHER than it was the previous year when they finished either 3rd or 4th (can’t remember which). Since then the trend is indeed downwards, but on nothing like the scale of Rangers in the early 80s. At their lowest, Pittodrie average attendances are around 30% lower than in the glory days, a remarkably small drop considering the length of time it’s been spread across and the staggering fall in the quality of the “product” on offer.
“On the positive side when the Gers are in SPL3 or defunct then you won’t be sweating about the league split every year, you should make top half most of the time.”
I agree.
For everyone with a keen interest in the ongoing Rangers scenario might find this interesting.
http://www.bbc.co.uk/sport/0/scotland/18440161
Read from 1457!
Currently(till tomorrow) there are 42 clubs in the Scottish game. 18 of the possible 41 teams have their record attendances against Rangers.
In comparison its just 6 for Celtic.
Certainly the attendances during the Greig era were low but to make the assertion that Rangers fans were less loyal then and therefore brought this on themselves is a Herculean leap.
The fans had no control over the management of the club finances. The decisions on dodgy tax, non payment of bills and signing of players were all outside of the control of the fans. Do you blame yourself for the current banking crisis ? I mean you have a bank account, a credit card and possibly a mortgage,
The schadenfreude of other fans I can accept and the piss take opportunity is exactly why I like football. The fact that its happening to arguably the countries biggest club is a massive cultural factor as well, I myself hate Man U and Chelsea and want to see them pumped at every opportunity. Bizzare as that may seem for a Aberdeen fan to imagine that I as a Rangers fan would dislike the big teams.
What I do find trouble swallowing is somehow attributing guilt to the fans as they have a desire for their team to win. The board were all big boys who in many cases ran big businesses, hardly fertile ground for shrinking violets.
I doubt fan pressure made them do it guv. I suspect their very own inflated ego’s was where the root of the issue lies. The fans were suckerd by shiney baubles and big talk, in hindsight of course its possible to see foolishness but when was good sense to the fore in football fans thinking. I for one loved it but on reflection and with that hindsight I might want to change it again.
I can tell you that I gave my season ticket up in the last 2 years of the 9 in a row period as it became dull and repetitive with little or no excitement.
“I can tell you that I gave my season ticket up in the last 2 years of the 9 in a row period as it became dull and repetitive with little or no excitement.”
Yeh, gets boring when you cheat.