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
    +3

    Comment number 174.

    Even the biggest clubs must realise that the game is over priced and under financed. long gone are the days when self made local millionaires could indulge their childhood dream propping up their local club. It is time the players joined the Greek creditors and take a "Haircut" on their obscene wages. How can a player earn in a week the equivalent of a couple of thousand spectators admission fees?

  • rate this
    +1

    Comment number 173.

    It's apparent now that Glasgow cannot support two football teams, so how about a merger between Rangers and Celtic? 'Glasgow United' could be one of the best supported teams in Europe, and it surely would be a great success.

  • rate this
    -4

    Comment number 172.

    Not sure why this is considered more important than Portsmouth's dilemma. Why no HYS about them?

  • rate this
    +1

    Comment number 171.

    Talk of 10 points deduction - Dundee were deducted 25. Need to reconcile SPL and SFL rules, or do we favour the bigger clubs?

    Rangers, in the lower reaches of the league, with a reduced budget, would be fair game. Bring em on!

  • rate this
    +1

    Comment number 170.

    I'm surprised no one's made the connection with bankers yet. Rangers will have been advised by one of the big firm of tax accountants when setting up these EBTs but one of the clauses in the legal document is that the tax advisors can't be sued if a tax tribunal rules that the EBT isn't allowable. These financiers are all in bed together and must be laughing themselves silly.

  • rate this
    0

    Comment number 169.

    They're called Employee Benefit Trusts, not Employment Benefit Trusts.

  • rate this
    +5

    Comment number 168.

    Late Kick Off's
    HMRC 0 - Vodaphone 5
    HMRC 0 - Next 4
    HMRC 0- Goldman Sachs 48

  • rate this
    +8

    Comment number 167.

    Will all of the zombie Rangers supporters continue to support the new club despite its massive £75 million tax bill and its main people all living in mansions and driving sports cars? Something doesn't seem amiss? In poverty stricken Govan? Ah well then, go renew your season tickets.

  • rate this
    -5

    Comment number 166.

    139. Kristofferson , Your a disgrace, I have attended Ibrox for years, my wife and daughter are both Catholics so keep your pathetic comments to yourself. I assume for you to tar a whole stadium as bigots you are one yourself.
    Keep the faith, If Dundee can come back from owing £20m we can rise again. WATP. 3IAR.

  • Comment number 165.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +4

    Comment number 164.

    Football clubs really need to understand that they have to pay their tax like everyone else, all too often they seem to take the attitude that's it just a nuisance they can ignore.

  • rate this
    0

    Comment number 163.

    Apart from throwing away this year's title and possibly losing a couple of players, Rangers will probably benefit as they won't have the massive tax bill hanging over them and it'll probably allow a decent owner to step up and take the club back to more settled times.

    David Murray was desperate to escape the club and Craig Whyte has had no answers to any of the questions at Rangers..

  • rate this
    +5

    Comment number 162.

    My Dad played football in Scotland prior to WW2 for Arbroath and Dundee Utd...paid 1.85p per week (same as everyone else) 40p bonus for scoring and 50p bonus for a win...he's till alive at 94 and can't believe the money that is paid to players today. As with all business you have to balance the books...football is far from doing this!

  • rate this
    0

    Comment number 161.

    goodbye rangers this is good for scottish football it's such a boring leauge anyway

  • rate this
    +5

    Comment number 160.

    Money owed to HMRC = money owed to all taxpayers.

    I see no reason whatsoever that I should pay these debts out of my taxes simply to subsidise a load of overpaid so-called sportsmen kicking a ball around.
    All football clubs should be paying ALL their taxes and dues, even if it means they charge their fans more for their pleasure or cut the players wages.
    Cut their coat according to their cloth?

  • rate this
    +2

    Comment number 159.

    I wonder if all those highly paid Rangers players/ex-players and agents will all contribute to bail out Rangers ??? I won't hold my breath - it's about time fans stop idolizing these overpaid football players who are distroying football.! game!

  • rate this
    -8

    Comment number 158.

    I AM ON BIG FAN OF FALKRIK FC THE BAIRNS ALL THE LOCALS OF LIKE RANGERS IN FALKIRK AND GRANGEMOUTH WILL MOVE TO THERY LOCAL TIME. IF RANGERS FC GO UNDER NO MORE TIME FALKIRK FC CAN ME MORE BETTER FAN RANGERS NOT ANY ANY LEGS THEN FALKIRK FC CAN WIN SPL VERY SOON COME ON FALKIRK FC WE HOPE RANGER FC NO MORE RANGERS ANY MORE FALKRIK FC IS DOWN SO WILL NOW AND WE NOT IN ANY DIET NOW LIKE RANGERS FC X

  • rate this
    +1

    Comment number 157.

    HMRC 1 Rangers 0
    HMRC 0 Banks 1

  • rate this
    +2

    Comment number 156.

    Sad day for Scottish football. I do hope though that this is the beginning of the end for the ridiculous financial state the game has got itself into all over Europe with unsustainable debt brought on by the relentless growth in player wages. I hope this is football's RBS wake-up call.

  • rate this
    +1

    Comment number 155.

    Donald Unpleansant

    I think you'll find the most effective way to stop a disease is the kill the host. Rangers going out of business would go a way towards eradicating problems that the minority of the club's supporter base bring with them. Scottish society wouldn't miss what the Old Firm games have been allowed to become.

 

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