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
    0

    Comment number 214.

    Its quite simple. Once upon a time the Old Firm could claim to be among the top five or six clubs in Britain. Now they wouldn't make the top 15 or 16 but they still spend as if the EPL and its huge media deals had never happened and the Old Firm can rival Englands clubs. Historically maybe but that counts for nothing. Sadly Rangers have found that out today.The SPL must reform or die.

  • rate this
    +1

    Comment number 213.

    feel sorry for the many rangers fans they have been sold down the river by craig whyte and to some extent david murray they new this was the only outcome i also feel sorry for my team dundee united who will not get the money they are due from rangers

  • rate this
    +5

    Comment number 212.

    This could be the best thing to happen to Scottish football in years. If Rangers have to restart as a new team in the 3rd Division, it means that the rest of the SPL teams will no longer be hindered by the Rangers/Celtic duopoly who veto anything that is good for the overall game - for example only 2 "no" votes are required to veto any financial changes - guess what two teams don't want change?

  • rate this
    -3

    Comment number 211.

    @206 - "No doubt the tic are not far behind :-)" - Sorry to disappoint but not the case at all.

  • rate this
    +7

    Comment number 210.

    The beautiful game is now nothing more than a business, operated for the stakeholders and owners' benefits. The fans are merely a means to an end. They are seen as consumers.

    I am not a football fan, but I have an interest in this story as I would like to see this big business paying its dues and its tax. This money is surely better off in the public purse.

  • rate this
    +1

    Comment number 209.

    What will happen if Rangers go? the papers will have nothing for their back pages any more and may even have put another Scottish team on the back for the first time in about 30 years. Hold on, Celtic are still here....phew, we can still have half an old firm centric media.

  • Comment number 208.

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

  • rate this
    +7

    Comment number 207.

    The football bubble had to burst some time. I hope more go under. Jealousy or a sense of fairness? Probably both. But I think society would be better.

  • rate this
    0

    Comment number 206.

    I heard it said, many times........... 'the OF are too good for the SPL....... and will make moves to the EPL.........
    I wonder if these deluded raving nutters still feel the same?

    Spending money they don't have certainly counts the Grangers out........
    No doubt the tic are not far behind :-)

  • rate this
    +2

    Comment number 205.

    It'll be a start if they close, maybe then most folk will then play tennis,
    live in proper houses,get paid a decent wage
    and love and peace will reign throughout the world,
    meantime I'll settle for just a little bitT less hate. X X

  • rate this
    +6

    Comment number 204.

    I thought it was illegal to own a company, run up a large debt you can't pay back, transfer the assets to another company you own, crash the first company to avoid paying your debts and then ' phoenix' the company from the ashes
    If it's not illegal it's immoral.

  • rate this
    -6

    Comment number 203.

    For those expecting Rangers to fold, I think that is unrealistic. The league will step in to ensure Rangers continue - even if it league run club for a while. No one in Scottish football can afford for Rangers not to play. Much too important for TV, media coverage and all the other clubs.

  • rate this
    0

    Comment number 202.

    I can understand attacking the club for spending more than it has, but why attack the fans? Most of them are decent people, don't allow the sectarian thuggery of the minority cloud your judgement to the extent that you'd rather both teams went bust and Glasgow lost loads of revenue and became even more downtrodden than it already is. Seems fair to me, but maybe I'm missing something.

  • rate this
    +3

    Comment number 201.

    What a sad state of affairs. Quite how club which exists by competing in the worlds oldest two horse race can get into so much debt I will never understand. The competition must be made more viable with an end of season knock-out play-off for the title. That might just attract a modicum of interest and help keep the wolf from the door in future.

  • rate this
    -2

    Comment number 200.

    195.Its not always what it seems

    "...you can't defraud the tax man for nine years and expect to get away with it."

    Why not? Can't mention names (BBC would never allow it) but some people have been doing it for longer and getting away with it.

  • rate this
    +3

    Comment number 199.

    On the very day the club makes this announcement, the leadership turns up in a "Range Rover" & the only sad loss will more likely be the low paid support staff who have mortgages ect.

    Says it all, what a "Team" effort.

  • rate this
    +1

    Comment number 198.

    "One of the UK's biggest football clubs"

    In your dreams! One of Scotlands top two, but no more than an Championship side in England.

  • rate this
    0

    Comment number 197.

    Sad days..
    Greece in trouble.Even though they are members of the Common Market.
    An organisation they thought would protect them.
    Rangers FC in trouble.
    No sign of SKY TV or the SFA coming to their rescue.
    Must be nice to have friends you can rely on.
    Or Politicians or Bankers you could trust.
    Then,again..Trust has to be earned.
    Who spoiled it for Rangers FC?

  • rate this
    -1

    Comment number 196.

    191. Mike from Brum

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

    --

    Yes, it will be about as exciting as watching Manchester United do the same in England.

  • rate this
    +2

    Comment number 195.

    A terrible day for Scottish football but one entirely of Rangers own making.

    Ignoring the fact they kept spending money they didn't have - you can't defraud the tax man for nine years and expect to get away with it. All to pay for expensive foreign players to the detriment of developing local talent.

 

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