Rangers Football Club enters administration

 

Rangers fans give their reaction to the news the club is in administration

Rangers Football Club has entered administration - meaning it has been docked 10 points, effectively ending its Scottish Premier League challenge.

The club appointed London firm Duff and Phelps as administrators at 14:50.

The move followed an unsuccessful legal bid by HM Revenue and Customs (HMRC) at the Court of Session in Edinburgh to appoint its own administrator.

HMRC lodged its petition over alleged non-payment of about £9m in PAYE and VAT following Craig Whyte's takeover.

Mt Whyte confirmed on Monday that the club had filed legal papers to appoint administrators. He insisted Rangers would "come out stronger" and "always be here".

Joint administrators

It was initially thought that the club had 10 days to make a decision on whether to proceed, but the HMRC action on Tuesday changed the dynamic of the situation.

Start Quote

Administration news conference

All stakeholders involved with Rangers are working hard to ensure the long-term future of this national institution”

End Quote Paul Clark Joint administrator

Paul Clark and David Whitehouse from Duff and Phelps were later appointed as joint administrators and take over the day-to-day running of Rangers while addressing its massive debt problems.

Mr Clark said: "HMRC have been working closely with the club in recent months to achieve a solution to the club's difficulties. However, this has not been possible due to ongoing losses and increased tax liabilities that cannot be sustained.

"We are working together with management and its major creditors, including HMRC, to achieve a solution to the financial problems which will ensure the ongoing survival of the business, which is of paramount importance to all concerned.

"We would like to take the opportunity of thanking the fans for all their past and present support and hope we can rely on them in the future.

"Rangers has a long and proud sporting tradition - one we all wish to see continue. All stakeholders involved with Rangers are working hard to ensure the long-term future of this national institution."

Start Quote

Rangers will always be here as I've said before”

End Quote Craig Whyte Rangers owner

Following Tuesday morning's legal case, a spokesman for HMRC said: "We can't discuss specific cases for legal reasons but tax that has been deducted at source from the wages of players and support staff such as ground keepers and physios, must be paid over to HMRC.

"Any business that fails to meet that basic legal requirement puts the survival of the business at risk."

In a statement, Mr Whyte said the HMRC's move meant the club had to "accelerate" its plans.

He added: "The administrators are in today and looking at everything and I will work with them to help them all that I can and we'll have a plan to get out of administration by CVA [Creditors Voluntary Agreement] process as quickly as we possibly can.

"Rangers will always be here as I've said before. We will come out stronger and come out a better business and most importantly in a position to put as good a team as we can on the pitch and to win trophies which is what we all want as Rangers fans."

Sir David Murray Sir David Murray said he was "hugely disappointed" at Rangers' plight

Former Rangers owner Sir David Murray said he was "hugely disappointed" at the club's decision to appoint administrators and expressed surprise at the timing of the decision.

Sport Minister Shona Robison said Rangers' current plight was "a concerning situation for everyone involved in Scottish football".

She said: "Football is our national game and it is now for the administrators to take forward the process of assessing the business and securing an outcome in the best interests of the club, its staff, supporters and the game of football as a whole in Scotland."

Financial storm

Meanwhile, Strathclyde Police said it had now resolved issues over payment for policing which may have affected Rangers home game against Kilmarnock on Saturday.

A force statement said: "We have had a positive meeting with the administrators and received assurances about payment for the provision of police services at this weekend's match.

"We are working with the club and planning for the game as normal."

The financial storm engulfing Rangers has several fronts.

Craig Whyte Craig Whyte is believed to be Rangers' secured creditor

Mr Whyte has acknowledged that the club has a £10m deficit in annual running costs.

It was reported last week that the chairman had also borrowed up to £24m against four years of future season ticket revenue from Ticketus.

Most serious of all, Rangers awaits a tax tribunal decision over a disputed bill, plus penalties, totalling £49m.

Mr Whyte was reported on Monday as saying this potential liability to HMRC could reach up to £75m if the club lost the tribunal.

HMRC believes the Ibrox club owes cash over its use of Employment Benefit Trusts (EBTs) to pay staff over a 10-year period.

It alleges the Ibrox club did not administer the scheme properly and underpaid tax.

Rangers disputes this and has contested the claim in a first tier tax tribunal, which is due to report within weeks.

After the club signalled its intention to go into administration on Monday, Mr Whyte said the best outcome would be to reach a creditors agreement which would allow the club to continue trading.

Secured creditor

Mr Whyte is believed to be a secured creditor of Rangers and would have to be paid first ahead of others such as HMRC.

However, if HMRC holds 25% or more of the club's debt it can block a creditors agreement which is necessary for Rangers to exit administration.

If a creditors agreement cannot be reached - and if the club cannot be sold - it is possible that Rangers could be wound up.

The ramifications for the Scottish game, if this happened, would be far-reaching.

It is likely that existing TV deals, which provide significant revenue streams for Scottish clubs, would be scaled back or in extreme cases cancelled.

The absence of Rangers fans at other grounds in Scotland would also reduce revenue to competitor clubs.

 

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  • rate this
    -1

    Comment number 134.

    122.Honest_mistakes
    12 Minutes ago
    "This could actually help the SNP win the independence referendum !"
    I see what you mean. A Scottish failure to balance one's books is in point of fact, an English/British failure.
    Head, buried, sand!

  • rate this
    +30

    Comment number 133.

    Why should Rangers (or any other football club) be allowed to avoid paying taxes and other costs. These are businesses, and, if they fail financially, they should not be allowed to rise from the ashes.

    Football has been awash with money for years, and it seems to have forgotten that bills need paying - everyone has been far too busy buying flash cars, etc!

    Time to face the truth!

  • rate this
    +13

    Comment number 132.

    The football club has been mismanaged. The Rangers fans have seen success built upon sand to the detriment of other clubs. Let the club fold. No different to any other business. I hope HMRC stick to their guns and hold out for all the money that is due.

  • rate this
    +1

    Comment number 131.

    Administration not liquidation - that is the key.
    Cut costs, sell assets. The only major assets are the players, Ibrox and Murray Park. The players will be sold or sacked. The value of Ibrox and Murray Park is directly linked to the rental yield provided by future tenants. HMRC must provide assurances that RFC will be around to provide tenants or the assets are worthless - taxpayer gets nil.

  • rate this
    0

    Comment number 130.

    Comment number 15. Ronnie M
    "Scotland will start to be a nicer place when both (Rangers and Celtic) are gone."

    How did this get a score of 16+? You want to see the two most successful teams in Scotland, two of only three Scottish teams with major European honours to their name, go bankrupt because a few thugs shout sectarian abuse from the terraces?

    There's something very wrong with you.

  • rate this
    +1

    Comment number 129.

    Rangers fans shouldn't worry too much - how many truly big clubs have ever folded? With such a large fan base (ie guaranteed income), I'd be shocked if it actually happened.

    It has clearly been severely mismanaged over the last few years (income is fairly predictable, so just a case of not being silly enough to spend what you don't have), you'll be better off with new owners in the long run...

  • rate this
    +3

    Comment number 128.

    "Football is our national game and it is now for the administrators ... securing an outcome in the best interests of the club, its staff, supporters and the game of football as a whole in Scotland."

    This seems to suggest football teams should treat loans they secure as free money, as it seems to try to pressure the administrators into ignoring the best interests of the creditors.

  • rate this
    +5

    Comment number 127.

    'Sir David Murray said he was "hugely disappointed" at Rangers' plight.'

    Why is he not being asked serious questions about it? Why are HMRC not being questioned, either?

    I refuse to believe that a tax bill as large as this was allowed to pile up without the knowledge of either party.

    Furthermore, allowing a 'dodge' that means Craig Whyte is entitled to payment before HMRC is unacceptable.

  • rate this
    +2

    Comment number 126.

    Accrue £9m worth of unpaid taxes in a business role? That's the sort of stuff you put on your C.V. "how I swindled the British government out of £Xm" when applying for your next job.

  • rate this
    +1

    Comment number 125.

    93.coram-populo-2010
    14 Minutes ago
    A tasty piece of prime real-estate - ripe for the picking at a knock down price no doubt?




    Brighton football mob sold its playground to builders then cried so loudly and so long on the coucil's shoulder that it was allowed to wreck a large area of countryside.

  • rate this
    0

    Comment number 124.

    Oh no. A 10 point deduction will move them down from Second Place all the way to... errr.... Second Place.

  • rate this
    +9

    Comment number 123.

    EBT's were challenged around 3 years ago by HMRC.

    Basically it's a Tax Avoidance Scheme whereby the recipients of large amounts of money do not pay tax or national insurance (and nor does their employer).

    Inevitably HMRC have caught up with all of these schemes.

    Whoever advised Rangers 10 years ago should be exposed as the true root of their current position.

  • rate this
    -5

    Comment number 122.

    This could actually help the SNP win the independence referendum !

    All those union jack waving folk who turn out for the Rangers games will have a "light bulb" moment. HMRC are the British tax people - would a Scottish tax authority have been so difficult to deal with and hound a club out of business ? I don't think so. An upsurge of support for the SNP is on the way.

  • rate this
    +10

    Comment number 121.

    This is great news for football. The minnows will be so happy. Let's hope this happens to more clubs and footballers wages are slashed.

    The problem with football is wages paid. Rangers deserve all the flack and pain they are due.

  • rate this
    +8

    Comment number 120.

    It's time footballers also took responsibility for financially crippling their clubs. Are they really worth their pay?! Quite ridiculous.

  • rate this
    +15

    Comment number 119.

    Let us not forget here, that many local small businesses sell to Rangers.

    There is a high chance that none of their bills will be paid, adding to their suffering.

    However, the way these things work, a 'new' Rangers will emerge and leave behind all of these small creditors.

    If a company does bust, it should not be permitted to re-invent itself and walk away from its debts, Rangers, or no Rangers

  • rate this
    +2

    Comment number 118.

    The old firm have syphoned as much cash out of the Scottish game to fund there Euro ventures to the detriment of domestic game.
    Rangers still couldn't manage they're finances, or find success on the park.
    Whyte says they'll return stronger. If they do return I hope it's wiser. No team will find success in europe unless they play in a strong domestic league & that's what's needed.

  • rate this
    +24

    Comment number 117.

    i hope that HMRC get some of my money back as everytime one of these football clubs fail to pay up there is less money for hospital, schools and doctors.

  • rate this
    -3

    Comment number 116.

    disgrace that Whyte signed Daniel Couzin just before filing papers however reality check is that the Establishment will never allow Rangers to go to the wall - come on its the Royal team in Jubilee year.

  • rate this
    0

    Comment number 115.

    They can play football, but looks like Fitba clubs canna balance the books!!

 

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