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.