CVA appears an impossible dream for Ibrox former football club

Anyone wondering whether or not former football club, Rangers, will be able to agree a CVA with its creditors in the weeks ahead would do well to pay attention to joint administrator, David Whitehouse, of Duff and Phelps.

In his retort to Friday’s press conference by Paul Murray and Brian Kennedy, Whitehouse told Ewan Murray of the Guardian:

“HMRC have made it very clear that they don’t believe in the football creditor rule so it would be contrary to stated policy to accept what the Blue Knights are proposing. Brian Kennedy and his lawyers and advisers are aware of that.”

HMRC conditions for supporting a CVA require debtor companies to “treat all creditors within the same class equally”.

In this instance, HMRC is an unsecured creditor, they therefore require all unsecured creditors to be offered the same deal.  Unfortunately for Rangers, the other football clubs they owe money to are also unsecured creditors.

Rangers are in the horns of a dilemma.  Pay Hearts, Rapid Vienna, Arsenal, Celtic and others the circa 5p in every £1 they will offer HMRC, which would be unacceptable to domestic and European football authorities, not to mention the clubs, or pay football debts in full, which would ensure that no amount of lobbying last week from the First Minister would be sufficient to force HMRC into accepting a CVA.

It’s not clear why Mr Whitehouse was so open on the hurdles Mr Kennedy’s plan faced but was less forthcoming when Mr Green presented the same plan to the media yesterday.  Perhaps he forgot.

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