How will Rangers FC survive liquidation?

Sports finance specialist Alex Miller looks back over the Rangers FC case to analyse what went wrong and what will happen next at the Glasgow club.

Glasgow Rangers are heading for liquidation after HMRC rejected the company voluntary arrangement proposal made by prospective owner Charles Green.

Green hoped dominant creditors would vote in favour to avoid the assets being sold off. However, HMRC - which confirmed to AccountingWEB it was owed approximately £21m by the club - rejected the offer, based on its general principle of “not agreeing to a CVA where there is strong evidence of non-compliance by a company with its tax liabilities”.

HMRC considered the proposal of a best-case scenario of eight to nine pence in the pound, but decided the club’s combined debts of £55m to unsecured creditors listed in the CVA made it unacceptable.

The rejection of the CVA was not connected to the looming employee benefits trust tribunal case between HMRC and Rangers. It is estimated the club may have to pay the taxman an additional £50m in back taxes if it loses.

Continued...

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Comments

What's in a name ...

mikewhit | | Permalink

"Rangers will continue to operate, but within a new company structure"

How about calling the new club Phoenix Rangers ?

  Debt Rearrangers?

carolbishop | | Permalink

 

Debt Rearrangers?

The Rangers FC    1 thanks

billy dixon | | Permalink

Murray must be held accountable as he must have known he was for trading whilst insolvent (as did Whyte no doubt, who just didn't pay anybody) and as such may face criminal charges.

Rangers FC    2 thanks

johnporter | | Permalink

Why did HMRC not  claim Ibrox & Murray Park reportedly worth £100m  & sold off to Tescos or otherwise for greater figure than £5.5m most of which goes to Administrators for 5 months work! 

Also surely the players could have been sold on for £10m + 

Yes the poor old Tax payer gets shafted again after the Banking scandal re Bonuses etc.now finding they have benefited  rich footballers with EBTs or whatever 

Time to simplify the Tax system me thinks to many loopholes for the Companies,the rich etc to hide behind. Probably first should be that Managing Directors personally become laible for Unpaid PAYE etc when Company continues to Trade insolvent or without confirmation form HMRC.

And the government wonder why they have no monies to fund Health Service, Pensions etc 

Note

If it had been a self employed/partnership business they would have been lucky to be left with only their undies to stand up in.

 

being rescued?

david5541 | | Permalink

Two Glasgow businessmen are preparing a bid to take control of Rangers.

Housebuilders and property developers Allan Stewart and Stephen McKenna plan to bid about £11m for the club.

They hope to run Rangers for two to three years before floating the company on the Stock Exchange and handing the club over to the fans.

The pair plan to meet current owner Charles Green, who bought the club's assets for £5.5m, in the coming days.

The Glasgow-based company being used for the takeover is called ALEFTAV but Stewart and McKenna are land developers.

A source close to the bid said: "The money is in place, it's now up to the owners.

"I believe people who know Scottish football should be in charge of the club. The plan is to run Rangers for a few years before handing the club and the stadium back to the fans."

Meanwhile, a new document released by administrators Duff & Phelps has revealed which parties voted for and against the ultimately rejected company voluntary arrangement proposal that preceded Green's consortium's purchase of Rangers' assets to relaunch the club.

Major creditor HM Revenue and Customs said in advance of the formal vote they would not support the proposal and, because the debt due to them represented more than 25% of the total amount owed, Rangers Football Club plc began the process of being liquidated.

The document states the total debt due to HMRC could be almost £95m, with the result of a recently concluded tax tribunal still pending.

However, another of Rangers' main creditors, Ticketus, voted in favour. The ticket firm, whose cash advance funded Craig Whyte's takeover of the club in 2011, are listed as being owed over £27m - another total still in dispute.

Several clubs understood to be owed transfer fee money are also listed with Arsenal and St Etienne voting in favour of the pence in the pound deal being offered and Orebro and Palermo voting against.

The total potential debt is listed as more than £124m.