'Very serious' threat of liquidation at crisis-hit Rangers

By Mike Farrell

Financial experts have warned that crisis-hit Rangers could be liquidated after plunging into administration over a £9m tax bill.

As concern over the future of the Ibrox club increased, owner Craig Whyte flew to London hours after administrators Duff and Phelps were formally appointed at the club.

Administrators Paul Clark and David Whitehouse said on Wednesday: "In broad terms, supporters can be reassured that Rangers will continue as a football club and we hope to reach a stage as soon as possible where the club can emerge from administration."

They took over the running of the club on Tuesday after a dramatic attempt by HM Revenue and Customs to get a court-appointed insolvency expert in at Ibrox. In a statement released on Wednesday afternoon, they said "very good progress" had been made since taking charge, while they confirmed the club's Hall of Fame dinner this weekend had been cancelled and will be held at a later date.

The insolvency firm revealed that HMRC made the late Court of Session move because Rangers owed £9m in PAYE and VAT dating back to Craig Whyte’s takeover of the club last May.

Neil Patey, football finance expert with Ernst and Young, told STV’s Scotland Tonight programme on Tuesday that the unpaid HMRC money could jeopardise any attempt to a creditors voluntary agreement to bring Rangers out of administration.

He said: "I think it [liquidation] is a very serious possibility. The administrator needs to reach agreement with 75% of the creditors by value. We know that HMRC are a major creditor, but the administrators will need the agreement of HMRC if they are going to get a CVA.

"I fear the revenue is going to take a very tough stance on this one and while normally a good underlying business would come out of administration, with this one, on the balance of chances, it might have to go down the liquidation route."

If the club goes bust, Rangers would lose its place in the SPL and a new company would have to be formed to take on the name of the Ibrox side, before applying to be let into the league.

On Wednesday, the administrators returned to the home of Rangers where they have begun looking into the club’s current financial position, with a view to making significant savings to pay off creditors.

Duff and Phelps said that Rangers had postponed the club's Hall of Fame Dinner scheduled to take place at the Hilton on Sunday as the timing was "not considered appropriate".

In a joint statement released on Wednesday, Mr Whitehouse and Mr Clark confirmed Saturday's game against Kilmarnock would take place. They also said: "The cost structure of the club and ongoing losses were such that the club had outstanding liabilities to HMRC. These were the subject of discussion and clearly HMRC wished to see them resolved as a matter of urgency.

"We are involved in dialogue with HMRC and will work with them constructively, as is the case with all other key stakeholders."

Owner Mr Whyte flew to London overnight on Tuesday, while manager Ally McCoist and director of football Gordon Smith attended meetings at Ibrox with the administrators on Wednesday morning. It is not yet know when Mr Whyte is scheduled to return to Rangers or whether he will attend the club’s home game on Saturday.

Answers

Fans erected a banner demanding "answers" from Mr Whyte across the road from the Main Stand at Ibrox on Wednesday, in protest at what has been described as one of the darkest days in the club's 140-year history.

After filing a notice of intention to appoint administrators on Tuesday, Mr Whyte was booed and heckled by a group of fans as he attempted to make a statement about the club’s situation on the steps of Ibrox.

Administrator Mr Clark told Rangers TV on Tuesday night: "We will be conducting regular meetings with the staff and, wherever we can, will keep giving messages to the fans who we know have an interest in the work that we are doing.

"I can't give any firm commitment but certainly over the next day or two we hope to get control of the finances of the club and to better understand what we need to do in the coming days and weeks.

"The club had been in such a period of uncertainty that the administration will actually relieve that uncertainty and start to build the future."

Once they had formally gone into administration, the current champions were automatically docked ten points by the Scottish Premier League, leaving them 14 points behind leaders Celtic in second place.

Rangers are also awaiting the result of a crucial tax case against HMRC, which Mr Whyte has claimed could leave them with a bill of up to £75m.

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