Administration leaves Rangers future in doubt -- and Celtic in SPL driving seat
Published 15/02/2012 | 05:00
Rangers formally placed themselves into administration yesterday, as the brinkmanship between the club and the Revenue reached Scotland's supreme court.
The Ibrox side were immediately docked 10 points, leaving Celtic 14 points clear at the top of the Scottish Premier League and all but certain to win their first title in four years.
Rangers lodged their intention to appoint an administrator on Monday, which allowed them 10 days to negotiate with the Revenue, who are owed £4.2m from a previous tax bill and penalties, £9m in unpaid taxes since Craig Whyte bought the club last May, and a potential bill of £36.5m, which could rise to £49m once penalties and interest are added, when a tax tribunal reaches a verdict on Rangers' use of employee benefit trusts.
That decision is expected next month. Revenue themselves applied to the Court of Session in Edinburgh yesterday morning for an administrator to be appointed by the court. The judge responded by granting Rangers until 3.30 to appoint their own administrator, and Paul Clark and David Whitehouse from the firm Duff and Phelps took control of the club in the afternoon.
They will now seek to stabilise the cash flow -- Whyte claims the club runs an annual £10m deficit -- while trying to strike an agreement with the creditors to come back out of administration.
This course is considered unlikely and the future is uncertain for the Ibrox side. The club also owes Whyte's company, The Rangers FC Group, £18m after he paid its debt to Lloyds TSB Bank when he bought the club from David Murray for £1 last May, and Ticketus, a finance firm that lent Rangers £24.4m.
"Administrators will work towards a solution that will be in the interests of the club and its creditors. It remains our firm belief that the club's future can be secured and we hope this period of administration will be as short as possible," said Whyte.
It is theoretically possible for Whyte to arrange a pre-pack administration, where he receives the club's assets -- the stadium, training ground, players and staff -- in lieu of his debt, forms a new company and club, then applies for re-entry to the SPL, in the same manner as Leeds United in 2007.
There will be no return for the former owner Murray, who expressed his regret at events, but also stressed the club could not revert to his control. (© Independent News Service)
SPL top three
P W D L F A Pts
Celtic 26 21 2 3 53 16 65
*Rangers 26 19 4 3 51 15 51
Motherwell 25 12 6 7 31 29 42
*Rangers deducted 10 points for entering administration