Rangers consigned to liquidation

 

Rangers have been consigned to liquidation after Her Majesty's Revenue and Customs decided to reject an offer from Charles Green's consortium.

The decision means Green's Company Voluntary Arrangement (CVA) will fail to achieve the 75% backing needed from creditors.

Green will now push ahead with plans to buy the club's assets for £5.5million in the coming days with both HMRC and Ticketus, the other major creditors, not expected to challenge the newco purchase deal he has struck with administrators Duff and Phelps.

But there is no guarantee the new entity will be able to play in the Clydesdale Bank Premier League.

SPL clubs would themselves decide on any application to acquire the club's share and could impose sanctions.

Dundee United chairman Stephen Thompson last week doubted whether Rangers would have enough support and some fans have been rallying their clubs to reject any proposal, although commercial interests could outweigh any principled stand, especially with no confirmation that television deals will continue without Rangers.

A 'newco' Rangers would not be allowed to play in Europe for three years and Green faces the prospect of losing players.

HMRC, whom Rangers are listed as owing more than £21million, believe their decision allows them to pursue individuals in the courts.

The tax authority forced Rangers into administration in February over millions of pounds of unpaid tax under Craig Whyte and could also pursue former owner Sir David Murray over a tax case, which could result in a £75million bill.

A statement from the tax authority read: "A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company's financial affairs in recent years.

"A CVA would restrict the scope of such action.

"Liquidation will enable a sale of the football assets to be made to a new company, thereby ensuring that football will continue at Ibrox.

"It also means that the new company will be free from claims or litigation in a way which would not be achievable with a CVA.

"Rangers can make a fresh start."

Rangers administrators Duff and Phelps said Green's consortium would move to acquire the club's assets immediately after the CVA is formally rejected at a meeting of creditors on Thursday morning.

"That transaction will be completed within a few days," joint-administrator Paul Clark added.

"The sum payable to creditors will be £5.5million, most of which has already been paid over to us by the Green consortium."

Clark added: "It was with HMRC's approval that a proposal was placed before creditors for consideration.

"However, it is the commercial view that the level offered within the CVA was not enough to merit departure from their normal policy of seeking a detailed investigation via a liquidator.

"However, we have been left in no doubt by HMRC the fundamental reason for the rejection of the CVA proposal is the historical non-compliance with tax liabilities by the former owners and directors of the club."

Green claimed HMRC's decision would result in less revenue for the taxpayer, but it also means his group will have to pay less.

Green said: "Frankly, I do not see what benefit will be achieved by this decision.

"My consortium's offer for a CVA amounted to a total of £8.5million.

"Now that we will have to complete the purchase via the formation of a newco, the purchase price and therefore the amount available to creditors will be £5.5million.

"I can understand HMRC deciding that football clubs which do not pay their taxes need to be punished, but by effectively banning Rangers from Europe for three years all that will happen is that there will be less revenue generated by the club and consequently less money paid over to the taxman.

"Also, I do not believe that by opting to vote against the CVA proposal, HMRC will generate more cash by pursuing those they believe as responsible - but that is a matter for them."

Green added: "The solemn promise I can make to Rangers fans today is that this club will continue as Rangers Football Club and will continue to play at Ibrox Stadium.

"We will be liaising with the football authorities at the earliest opportunity to establish our position regarding the SPL."

Green, who had been talking in recent days about transfer targets and raising up to £20million, could lose players for nothing as PFA Scotland previously stated that no one is obliged to transfer their contract to a newco under employment law.

The club's ability to sign players is also in doubt given uncertainty over a 12-month transfer embargo imposed by the Scottish Football Association.

Although Rangers successfully challenged the ban in court, Green has not ruled out accepting it as the alternative sanctions include suspension or termination of membership. The SFA board would also have to approve a newco application.

Ticketus, who are owed almost half of the club's £55million confirmed debt, had not decided on their approach to the CVA before today's announcement but they plan to pursue Whyte for the shortfall.

The CVA document shows that less than £1million will be shared between unsecured creditors under a newco with most of the money going to administrators' fees and legal costs.

PA

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Career Services

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?