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
    +2

    Comment number 194.

    re 176 banklash - football clubs have an arrangement where the tax man comes after other creditors. It's a disgraceful situation when small businesses are hounded by the Revenue - often for completely wrong amounts. I know as I've been there, where demands were made for sums paid months earlier, but you never get an apology.

  • rate this
    +3

    Comment number 193.

    182. I doubt all that many folks in Govan actually manage to watch the ridiculously over priced product on show at Ibrox.

  • rate this
    +12

    Comment number 192.

    Rangers have been chasing rainbows for years. Celtic are no better. The game in Scotland is dying a very slow and painful death. Re-structuring may salvage something but it has to happen now and it must reflect the wishes of the paying public and involve an expansion of the top flight. That wouldn't solve everything but giving your customers want they want is always a good start.

  • rate this
    0

    Comment number 191.

    Pretty much means Celtic will win the SPL from now 'til the end of time.
    What's the challenge in that?

  • rate this
    +2

    Comment number 190.

    @RichFirth. Are you actually serious? I no little about Cetlic or Rangers being a Scun United fan well south of the border, but I know enough to know that you are utterly insane if you think this is even feasible! Clearly you know very little about football.

    On top of that both clubs fill their grounds week in week out, so it's quite clear that the city can easily sustain both of these 2 clubs.

  • rate this
    +3

    Comment number 189.

    yeah, I agree, not all Rangers fans are bigots but the club is a focal point for the orange order and other unsavoury groups. Just check out the union jacks, ulster flags, etc. Then head along to the many Rangers pubs and there's plenty of guys standing at the bar with their UVF polo shirts on.

  • rate this
    0

    Comment number 188.

    It's 'company voluntary arrangement', not 'creditors' voluntary agreement'. It's not either a CVA or a winding up as the only options, as the story indicates. If a CVA isn't a goer, the administrators could sell the business (i.e the club) to a new company (e.g. rangers FC 2012 Ltd'). Whether the SPL would accept that club into the SPL is down to the SPL's rules, of course.

  • rate this
    +1

    Comment number 187.

    I'm with a few other commentators who have absolutely no sympathy for football clubs who live completely beyond their means and treat statutory taxes as some optional inconvenience.

    As a taxpayer, I want however many million pounds Rangers and any other clubs owe PAID IN FULL. And if this means that the whole unsustainable football edifice crumbles - so be it.

  • rate this
    +2

    Comment number 186.

    It's about time some of the clubs were shut down, maybe then the rest of them will stop being so complacent over debt, players wages, transfer fees, tax avoidance, bungs and backhanders. What might have been a game once is just another business, and NOT too big to fail. Portsmouth, Rangers and how many others are on the brink? It's not a beautiful game, it's just hard business fact.

  • rate this
    +1

    Comment number 185.

    My understanding is that Mr Whyte has the whip hand as a secured creditor, he can dissolve the company, form a new Ltd Co, and buy the assets of the old one, leaving an empty shell and it's debts behind. The down side to this is that no British Bank should / can offer facilities for a phoenix operation such as this. If you don't have the ability to bank takings you don't have a business.

  • rate this
    0

    Comment number 184.

    This might be the catalyst for the Scottish league to look at its great weakness, just two teams. The lack of competition has been slowly killing Rangers and Celtic for 20 years. It does not work. Maybe a salary cap for the clubs? Whatever it takes to rebalanace the league into one where there is a decent competative mix. The league needs get creative or it will continue to flounder.

  • rate this
    +2

    Comment number 183.

    Rangers in common with many football clubs in the UK has been living beyond its means, they will not be the last club to get into financial difficulties.

  • rate this
    +1

    Comment number 182.

    167.pokemon black teh

    "Something doesn't seem amiss? In poverty stricken Govan? Ah well then, go renew your season tickets."

    Yeah something does seem amiss, how can they afford season tickets if they are apprently in poverty?

  • rate this
    +1

    Comment number 181.

    In response to SIMPLY THE BEST - 3IAR

    FACT
    At the last OF match I attended as far as one could see, NO ONE was watching the game....... they were all more interested in the act of chanting towards the opposing fans .......... the game of football on the pitch was incidental.
    I'm sure there were a handful of football fans like myself somewhere in the stadium.
    I suggest you are in denial. :-)

  • rate this
    +2

    Comment number 180.

    lets all bring football back to reality with a bump by stop buying the sun and sky tv , coruption breeds coruption

  • rate this
    +1

    Comment number 179.

    I don't get why this is bad for Scottish football. It's been tedious and hopeless for all but the old firm for almost 3 decades. It doesn't need to be that way. And will they give back the trophies they bought on false pretences?

  • rate this
    +1

    Comment number 178.

    Disgraceful, the taxpayer will ultimately bear the cost of Rangers profligacy.Since 2001 RFC existed by cheating the taxman.It calls into question whether they won games on a level playing field with the rest of the SPL as they fielded players they might not have afforded if they hadnt robbed the rest of us.Hearts and Dundee utd are due money, how many others. Whyte needs banning as a Director.

  • rate this
    0

    Comment number 177.

    Am genuinely sad that Rangers have sunk this low for many reasons. However, it makes me even sadder that commentaries talk about the club's proud traditions conveniently forgetting the disgusting anti-catholic policy that dominated the club's employmement policy for most of its 'proud' history!

  • rate this
    +4

    Comment number 176.

    I ran a small business a few years ago and, if we were late with the monthly PAYE cheque, the local tax office were on the phone within a week to demand payment. Why is it different for Rangers? Or any other football club?

  • Comment number 175.

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

 

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