In the event of Rangers facing financial Armageddon after the resumption of their HMRC tax hearing a quick – very quick – recovery scenario is available to them. At any point during next month’s hearing they may consider their position is no longer tenable and, unable to meet the tax bill, a new company could be formed which attempts a prepack administration.
A prepack offer from a new company, for example, Rangers Newco FC Ltd, would offer an administrator a deal for all assets of the club, including stadium and offer to meet outstanding player wages. Deals like this seldom offer unsecured creditors much but even a small percentage might realise more cash than the administrator would gamble on raising in an unstructured sale.
In such circumstances, the administrator could accept as little as £4m for the unsecured creditors.
In normal business Rangers Newco FC Ltd would begin trading and this would be the end of the story but football is not normal business. Rangers Newco FC would own a stadium and would employ some footballers but they would not be part of any league structure. They would need to apply for membership to the Scottish Football League or Scottish Premier League.
In this scenario, the death of Rangers Football Club would leave a vacancy in the SPL, presenting several financial, logistical and sporting challenges. Without Rangers, the league would have to invalidate all this season’s results involving the club, one team would be without a game each weekend for the rest of the season, current TV contracts and sponsorship deals could be jeopardised, while future contracts would be worth a fraction of their current values.
Every team in the league would have to downsize and some would have to win fresh support from their bankers, which may or may not be forthcoming.
There is, of course, a resolution to this problem.
Rangers Newco FC Ltd could present an offer to the SPL. The new company, with its stadium and thousands of potential supporters, could take the obligatory 10 point punishment for going into administration and adopt the place of Rangers FC, complete their fixtures and allow every other team in the league to fulfil commercial obligations.
If these events took place before Christmas, Rangers Newco FC could be debt-free and signing players in January to enhance their league challenge.
To force the deal through, Rangers Newco FC would require 10 of the remaining 11 SPL clubs to vote in their favour. If any two clubs stand against them, they would have to apply for membership of the Scottish Football League, but, having researched this story for several days, I expect Rangers Newco FC Ltd would get enough support to pick-up the place of the defunct Rangers FC.
Any natural sympathies towards Rangers aside (which will not exist in all places), money talks and, apart from Celtic, this league is neck-deep in debt. Celtic might be in a position to survive Rangers failing but it would cost our club tens of millions.
Crucially, if the other SPL clubs back Rangers Newco FC, they create a template for a snap recovery from their own troubles. Instead of repaying your debts, simply get yourself into a safe league position, ditch the company, prepack and start again with a clean sheet.
This would create a clear incentive to stiff creditors. While the banks will get wise and not offer unsecured facilities in future, HMRC and small traders are likely to become perennial fall guys. Why would any mid-table team pay millions in tax, rates and policing bills, when they have a sporting incentive to ditch creditors without punitive penalty, freeing income streams to buy football bling in the next transfer window?
This would make a mockery of the Uefa predident Michele Platini’s Financial Fair Play initiative and make our league the poster-boy for Financial Doping.
Scottish football will be mortally wounded if it were to parachute a club straight into the upper echelons of the game while establishing a blueprint for the abandonment of creditors.
It is incumbent on all who care about the game, in Scotland and throughout the world, that we insist Scottish Premier League clubs do not allow a prepack company to phoenix into the shoes of a dead football club.
Celtic fans, as well as those from Aberdeen, Hibernian, Dundee United and St Johnstone, together with fans from Motherwell, who could become genuine championship contenders, and from those clubs who would avoid relegation if Rangers failed, must insist their club votes against any prepack company parachuting into the league.
The SFA executive must use whatever influence it can to prevent the name of Scottish football being brought into disrepute. Politicians, who either have, or aspire to have, tax raising responsibilities, must register their abhorrence that a self-serving oligopoly should attempt to vote themselves an escape from paying tax.
Fifa and Uefa must explain to the Scottish FA that the days of shady financial deals in football are gone.
Watch the media coverage of these events carefully. If and when the decision time comes, the case to acquiesce to Rangers Newco’s demands will be overwhelming. Sincere ‘impartial’ observers will do their upmost to convince us all we must do whatever necessary to save Rangers for the good of the Scottish game. Some voices will even tell you Celtic need Rangers Newco. Whatever part of my club is dependent on Rangers I am willing to lose.
Rangers-HMRC tax hearing resumes next month, when there is also a two week international break. The most important element of making a prepack offer succeed is to offer a fait accompli: ‘Here is a solution, you have no time and you have no alternative’.
Should Rangers go into administration, I believe this is a very, likely scenario. If you are a supporter of Celtic or any other club, make your views known.
Read issue 3 of CQN Magazine free online here or buy a print version at Magcloud.
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my wife still hasn’t had her money back from pre pack, the went under before christmas and she didn’t even get 10p in the pound
Barcabhoy. They wouldn’t get entry to european competition for three years, so any coeficient problem will be there for a long time. They really have done us over. The more I think about it, the angrier I become.
Absolutely disgraceful phone-in on Real Radio tonight – the ‘Let’s Hound Neil Lennon out of Scotland’ (Part 2) campaign is gathering pace.
Warchest.
The absolute clown behind this is deemed reputable to be given a strong voice on licence fee payers BBC Scotland radio hun and a newspaper going the same way as his career. Down hill from no great height.
Mersey
Your of the darkside pal,you would have a wee bit more respect if you just admitted it,as for replying to you,I don’t wish to wrestle with a pig as I’d only get covered in it.
anyone seen kojo?
Whatever part of my club is dependent on Rangers I am willing to lose.
I agree wholeheartedly. Rangers decade of finacially doping competition in Scottish football cannot go unpunished, and cannot go without being seen to be punished. Re-entry into the SPL must come through merit, qualifying through the SFL, gaining the promotion necessary, starting in division 3. Any other means of entry is simply more cheating. Surely would have something to say?
The SFA must also ensure that the newhuns make no referenceee to their history, no stars on the jersey,
Rangers no more( sounds like a song),
Good evening folks,
Hamiltontim
I hope you managed that wry smile during the second half last night.
Celtic gave them that doing.
Scant consolation I know – as long as it brought a smile, the bhoys did a job well done.
Hail Hail
brucecassavetes says:
27 October, 2011 at 20:11
What has he done now – guilty of being too muted?
I have never made a post on this site or elsewhere calling ANY PERSON a HUN.
Without very convincing evidence, I never will.
To call somebody this greatest insult we can imagine, without compelling EVIDENCE, makes the perpetrator worthy of that ignoble title.
Please be careful about how you use this gravest insult.
Don’t jump to childish conclusions.
Anger as ranjursnew co is announced
Craig Whyte ducks press conference about pre pack
Paul67 – Spent the last while reading your leader and the contributions. Pretty depressing, but a good leveller. I always thought that they would try pull the whole of scottish football under with them as their fingertips slipped from the edge of the life-raft.
This needs to be out in the open now. Best to have the debate about them being able to wander on with little penalty sooner rather than later. More time for everyone to consider what they may be up to.
Wouldn’t like HMRC, other teams, or anyone else caught on the hop and having to make quick/rash decisions.
TinyTim says:
27 October, 2011 at 18:28
I can’t find anything online re Farsley Celtic’s phoenix club being banned from incorporating, “Celtic,” in their name, but on the AFC Farsley wikipedia page, there’s an interesting reference which I can’t get to open, headlined, “Farsley forced to drop the Celtic,” from Non League News 24, of the 12th June 2010.
http://en.wikipedia.org/wiki/Farsley_A.F.C.
I suppose the question is, WHO forced them to drop the name? It could have been the league or HMRC, and there’s NO CHANCE the SPL/SFA would ban the neworcs from calling themselves, “Rangers.”
In a pre-pack scenario, how could Rangers Newco FC inherit/take on the previously accumulated points of a dissolved/liquidated/wound-up club/company? At a stretch I could see some new entity taking on the future fixtures of the old club but not the points or honours or history etc. They die with the old club or HMRC still has a case against the pre-pack. Doesn’t mak sense tae me. Hunguffry?
Chris
Lennon n Mc….Mjallby
You just have replied to me, you ass!
You sound as stupid and ignorant as those who you suggest I follow, follow! Cheapshot insults make you feel big, I suppose!
Thought I told you to scroll on!
G’d Evening Folks… Que Pasa?
Talk about a game of two halfs
Dunno where Kayal and Ki’s mojo went last night, but they need to go hunt it down
Second half – Forrest (obviously), Matthews, Ledley, and Stokes did the business to turn it round imo. Hopefully Hoops will take confidence from his goal and bring back some of the form of last year. Gotta say, he’s never been my favourite player, but Stokes never hid and worked harder than I’ve seen for weeks.
MurdochauldandHay says:
27 October, 2011 at 20:17
Quality…
Keep the Faith!
Hail Hail!
the newhun co. crest has already been designed, five stars being flushed down the toilet :oD
THE EXILED TIM 20:10
Celtic as we are and with our stature ‘have scottish football by the short and curlies, we are in a position to demand what we want, and we will get what we damand, we hold the full deck.’
The PLC dont, they havent even have the cojones to take advantage of the last three years, doubt they would start doing what the support want in this situation when they could lose money. In fact theres no way I can see it other than a highly spun ‘we vote against it’ campaign safe in the knowledge the spinless ten will want them back in.
EN
Kilbowie
Strong words indeed,a bit like my own,if I have offended you I apologise,my mind is made up as regards my observations/accusations,its a sensitive time on the blog and for one or two you just get a feeling from reading their posts.
Big Nan @ 06:57
Just catching up – got your post this morning: i knew there was something missing, the statistical shredder (rolling eyes smiley) Cheers for that. Bookmarked this time :)
MurdochauldandHay:
Hope you don’t mind, stole your link and put it on twitter…
Keep the Faith!
Hail Hail!
Eyes Wide Open:
Guilty of not being happy when Kayal gets hit in the face. I mean, how dare he stand up for one of his own players.
Seriously though – Neil referred to as ‘poison’, another enlightened caller informing the listeners that ‘we don’t want him in this country’, Lennon is also apparently a ‘cheat’ for taking Sproule to task. This is going to snowball.
2 hours of venom – think I’m done with the radio.
jackie mac @ 08:01
Cheers pal – but i wasn’t attacked, they were threatening to do it if i admitted being Irish. They started be-friending us because there was a lassie with us from Denmark who had been working in Dublin for 2 yrs and had an Irish accent. I kid you not. There was a Celtic supporter hospitalised recently in a Hibs pub by an ex-Rankers player. At the moment, the culprit is offering financial incentives to keep it quiet.
much though i hope rangers fc suffer by thr RULES of the game i think if it came to clubs to decide wether to vote them into the s.pl then i doubt celtic fc would stand in the way.
okay if they are granted acsess to the first division hence only missing the top flight for a year then perhaps that would be something to consider.
rangers fc missing from the SPL for 3/4 seasons or indeed permenantly would possibly be the final nail in the coffin of our rapidly declining game in scotland.
the custodians of celtic have a duty to the history of our great club to make sure we can survive ourselves as a flagship club.
we need rangers wether you like to admit it or not.
Caught the end of the real radio phone in there and heard what sounds like the start of another demonise Neil Lennon campaign- watch it snowball to deflect away from the hun tax avoidance scandal
just thinking maybe Alex Salmond should listen to these phone ins anyway as they say its those kathelic schools.i never hated anyone Except Mrs Thatcher surely when i go up to those pearly gates St Peter will forgive me for that one
EWO
Lol it did my friend. We had visitors again so I couldn’t even watch it. However, my phone was going tonto with updates.
I had that smile and I did think if you :)
Kilbowie Kelt @ 20 17.
Hear , hear !
Crucible Quick News. ————–
Stairheedrammy:
You’re lucky that you only caught the end of it. See my posts at 20:17 and 20:27.
brucecassavetes says:
27 October, 2011 at 20:27
Should be the end of that radio programme if its being used as a medium and outlet to vent and publicly express voilent and racist emotions towards any human being – let alone one who has already been publicly persecuted for years.
Its for reasons like this that I hate Scotland – and I dont mean to offend anyone, but since Lennon was appointed as our manager and the wave of hatred towards the man turned into a tsunami – I have gone from not being bothered how Scotland get on in Soccer or Rugby – to actively wanting them to get beat – like I do with ‘Norn Iron’.
EN
The PLC do hold all the cards, whether they play them to their advantage is another story.
As a support we could well be in a position to force the club, the amount of people saying that they will walk away if the club support the hun should make the board pay enough heed.
The support are the club, the suits are there for a very short time, maybe it’s time we stood up and are heard again.
Lennon n Mc….Mjallby
And what is this feeling you feel? My god, I wouldn’t have wanted to have lived in medieval times; you would have had me drowned as a witch.
I have posted many times today. Quote one thing I have said that supports your feeling. We all have feelings but some of us are more sentient than others!
Alternatively, let us hear your considered views on these sensitive times?
Or, grow up you drama queen!
Mulgrew a strong doubt for Saturday.
When in 1994 we were destined to go bust I, like many others came up with money that I knew –or was advised by people who should have known–was not going to make me a profit.
I contribute the £1300 or so that I could barely afford because I knew that Celtic must survive. Not just because it was my football team but because it was more than that. The totem or symbol of an ideal and a way of life, call it what you will but it was for “more than a club”. The underdog who succeeded despite who they were.
Now I know for a fact that the “establishment” would have loved to see Celtic fail and put us back where they thought we belonged–in the gutter. Or at least in the third division. But we survived without charity and we payed our way.
I thought that I was used to the idea that there were two rules in Scotland, one set for us and one for them, but I find the prospect of Rangers getting away with their profligacy if not criminality unbearable.
We must not let them get away with it. The Rangers and their cheating are the epitome of all that ails Scotland.
We are the people indeed.
Is it worth writing to Real Radio pointing out that they are allowing, even promoting the airing of racialist comments- they do these shows on a delay to allow them to cut out swearing- so why not cut out openly racialist rants
Mersey
Ok then,as you are suitably pissed off I think I do owe you as much of an explanation,if I am ultimately wrong I will hold my hands up and admit it.
The post I reacted to was where you dismissed straight out of hand the idea of a bhoycott.
Let’s be right about this,we could possibly be facing a situation where we get stiffed due to the huns being admitted back to the spl,w
hamiltontim says:
27 October, 2011 at 20:33
Great stuff – that has cheered me up no end.
The charitable spirit of Celtic burns bright – even if it doesnt have a clue itself!!! lol