So, finally, it happened.
Rangers in Administration!
Drama in the newsfeeds and in the Court of Session.
I think some Celtic fans have almost imploded in joy seeing their rivals right in the grubber.
I’ll admit to having a right good chuckle over it myself.
It now gets interesting, HMRC played their cards today to force Administration on Rangers, earlier than Craig Whyte originally planned.
Possibly Whyte knew that and Monday’s announcement to appoint an administrator was maybe an attempt to forstall HMRC and draw out more time to prepare.
Whatever the background, an action raised today at the Court of Session over a £9 Million sum of taxes ran up since Whyte took over at Ibrox focussed the situation and Whyte got to appoint the accountants he intended.
The Administrator now has to examine the books, decide what can be kept running or not, take a view on the Company’s assets and if they can be sold on. They will also have to deal with the company’s creditors, suppliers and employees.
Has this been Craig Whyte’s plan all along?
What are his motives and what will be the end game?
He holds secured debt on Rangers by purchasing out the £18 Million debt formerly owed to Lloyds Banking Group and has a hold on Ibrox Stadium, Murray Park and the Rangers ‘Brand’.
My interest will be on how things unfold now, Given the “Rangers Tax Case” with speculation about sums from £49 Million to £75 Million owed through so called tax efficient schemes created by Rangers from the early part of the last decade, The HMRC are certain to have a say in what happens to the Club. They have a duty to recover what they can, but they also will want to set a marker and a warning to other football clubs.
The Administrator may look to trade to the end of the season, cut spending, work behind the scenes to create a leaner company. Administration gives a chance to talk around the debt and potentially for a Creditors Voluntary Agreement to be agreed.
This may allow the original company to resume trading, but creditors will have to take a smaller sum in lieu of potentially nothing.
HMRC have an obvious input being owed such huge amounts, but their debt is unsecured, if they hold out, they may be able to take Rangers under.
Therefore, this version of Rangers is stone dead. There’s no white knight that’ll pay off the tax man and other creditors. No sane businessman has money to simply wash away.
The endgame is ultimately liquidation. It removes the tax burden, it gives a fresh start. Whyte holds the cards, he can package up a new Rangers or Rangers Athletic, Rangers United, Rangers 2012, Rangers Phoenix, Glasgow Rangers, pick whatever combination of a title that suits, created from a shelf company, if it doesn’t already exist, sprinkle on the stadium, training ground, the Rangers Brand and Whyte is almost there and ready to restart.
Now comes the tricky bit, the SFA, the SPL, the SFL, Rulebooks, Blazers.
I’ve seen speculation that ‘New Rangers’ will be allowed in the SPL for 2012/13, albeit with penalties in terms of an automatic points deduction and a ban in place from European competition for three years.
Yeah, Aye Right, that is such punishment for years of financial doping, for trophies gained under a dodgy tax scheme. Maybe its a different badge or changed name of the holding company, but it gives business as usual for Rangers fans.
Unpalatable to me and others that want to see change as a result of Rangers move to administration, but it does such a move keep sweet the SPL’s television partner and preserves the ‘Old Firm’ game for them?
Is there another path that could realistically be taken?
Would the other SPL clubs be brave enough to expel ‘New Rangers’ into the SFL?
Sadly, I don’t think so. A fudge will happen, Rangers will likely mutate into ‘New Rangers’, a mass exit of players as the club restructures under its new guise. A settlement made to hold the SPL’s deal with television.
The only thing killed off today is the debt owed to the HMRC.
Hardly reason to have Jelly & Ice Cream in celebration.