Rangers condemned to liquidation after creditors' deal is rejected

By Andrew Warshaw

June 12 – Crisis-torn Scottish giants Glasgow Rangers, one of the most iconic names in European football, seem certain to go out of business in their current guise after tax authorities rejected an offer to buy the ailing club by a consortium headed by former Sheffield United supremo Charles Green.

The landmark ruling means Green’s Company Voluntary Arrangement (CVA) will fail to achieve the 75 per cent backing needed from creditors.

Green will now push ahead with plans to buy the club’s assets for £5.5million ($8.5 million/€6.9 million) in the coming days with both HMRC and Ticketus, the other major creditors, not expected to challenge the newco purchase deal he has struck with administrators Duff and Phelps.

However, there is no guarantee the new entity will be allowed to play in the Scottish Premier League (SPL) next season because of strict rules, a move which itself could have a huge impact on television deals.

Whatever happens, any newly formed club would be barred from playing in Europe for three years, with the knock-on effect of a raft of players leaving.

HMRC, whom Rangers are listed as owing more than £21 million ($33 million/€26 million), believe their decision allows them to pursue individuals in the courts.

Rangers were forced into administration in February over millions of pounds of unpaid tax and a statement from the tax authorities read: “A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company’s financial affairs in recent years.

“A CVA would restrict the scope of such action.

“Liquidation will enable a sale of the football assets to be made to a new company, thereby ensuring that football will continue at Ibrox.

“It also means that the new company will be free from claims or litigation in a way which would not be achievable with a CVA.

“Rangers can make a fresh start.”

Rangers administrators Duff and Phelps said Green’s consortium would move to acquire the club’s assets immediately when the CVA is formally rejected at a meeting of creditors on Thursday morning.

“That transaction will be completed within a few days,” joint administrator Paul Clark (pictured above) added.

“The sum payable to creditors will be £5.5million ($8.5 million/€6.9 million), most of which has already been paid over to us by the Green consortium.

“We have been left in no doubt by HMRC the fundamental reason for the rejection of the CVA proposal is the historical non-compliance with tax liabilities by the former owners and directors of the club.”

Green claimed HMRC’s decision would actually result in less revenue for the taxpayer.

“I can understand HMRC deciding that football clubs which do not pay their taxes need to be punished,” he said.

“But by effectively banning Rangers from Europe for three years all that will happen is that there will be less revenue generated by the club and consequently less money paid over to the taxman.

“Also, I do not believe that by opting to vote against the CVA proposal, HMRC will generate more cash by pursuing those they believe as responsible – but that is a matter for them.”

Green added: “The solemn promise I can make to Rangers fans today is that this club will continue as Rangers Football Club and will continue to play at Ibrox Stadium.

“We will be liaising with the football authorities at the earliest opportunity to establish our position regarding the SPL.”

Green, who had been talking in recent days about raising up to £20 million ($31 million/€25 million), could now lose players for nothing with the additional blow of a 12-month transfer embargo already imposed by the Scottish Football Association.

Although Rangers have successfully challenged that ban in court, Green has not ruled out accepting it since alternative sanctions include suspension or termination of membership.

Rangers Supporters Assembly vice-president Ross Blyth described the latest developments as a “pretty catastrophic day” for the 54-time Scottish champions who might have to resume life in the Scottish Third Division.

But he added: “The way the world is economically just now, and football and Scottish football especially, these guys can’t really afford to do without Rangers and the income and revenue that Rangers generate through commercial and television deals, sponsorship deals and travelling fans to the games.”

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