The prepack route for Rangers Newco FC


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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  1. if the others vote for the return of the orcs and we in turn bhoycott them what have they gained?



    either way they will loose revenue,


    if the huns go they may increase revenue by gaining support from the locals who currently go to mordor..

  2. fergus slayed the blues on

    I have absolutley no confidence in the SFA/SPL or the other 10 teams to do the right thing regards the ragers admin.


    I just hope that CW has pi***d HMRC off enough for them to do what’s needed .


    Any team playing in blue out of Ibrokes with ragers in the name should be hounded for the tax payers 49m .


    hail hail

  3. fergus slayed the blues on

    if CW was a motherwell born billionaire who wanted to save ragers ,the club he has loved since he was a boy .


    Would he clear their debts and ensure all creditors were paid .Or


    If on the other hand he was a vulture capitalist and brought in as a front man to make sure HMRC got shafted .


    Would he keep his cash in his bum bag and put the ragers into admin for a paltry 2.8m


    Over to you Craig

  4. Top of the morning to you all from a chilly Fife with the rosy dawning being spoiled by dark clouds coming in from the West. An omen?



    The good article by Paul has been done justice by some of the excellent contributions best of which I think are from James Forrest who seems to have caught the Zeitgeist.



    DR article set up to prepare us for a pre-pack with an eventual 10-point deduction I think?



    Just like the UEFA rumours of 2-year ban and closed Ibrox usually turn out to be somewhat less than that?

  5. Tom McLaughlin on







    Hugh Keevins



    RANGERS could be hammered with a total deduction of 25 points if they are forced into administration.



    And should the Ibrox side have to start again under a new name it is possible all of those points would come off before the end of this season.



    That would leave Craig Whyte’s club with a points disadvantage which would make the winning of a fourth, successive SPL title a virtual impossibility.



    However, Record Sport understands Rangers would fight tooth and nail against any move to impose more than the statutory 10-point penalty.



    An extra penalty will become a real danger if Whyte is forced to take the club into administration and the taxman is able to block a creditors agreement to take them out of it again.



    Rangers are one of 12 clubs with one share in the equally-owned business that is the SPL. If they are taken into administration that share is immediately suspended and Rangers will automatically be deducted 10 league points.



    A Creditors Voluntary Agreement (CVA) will then be offered to anyone owed money by Rangers.



    If 75 per cent of the shareholders and the same percentage of creditors accept a fraction of what they’re owed the club can come out of administration and carry on with no further penalty.



    But if HMRC managed to put a block on the deal, as happened with Leeds in 2007, the Ibrox club, formed in 1872, would cease to be and assets would be transferred to a new company.



    Financial analysts last night said the taxman is allowed to object to CVAs if owed more than 25 per cent of a business’ total debt.



    If Rangers lose the tax case into the Employee Benefits scheme they could be facing a tax bill of £40m plus.



    Clubs who can’t exit administration by a CVA must hand over their assets to a new entity and after shares are transferred to a new company agreement has to be reached with the SPL over a return to the top flight.



    Under the terms of the transfer, a further penalty has to be imposed by the SPL and they’re empowered to deduct another 15 points.



    But it is understood if Rangers are taken into administration before the outcome of the tax case has been completed they could escape the extra penalty.



    Such a move would leave the club with a CVA and no one to contest it since Whyte would be the main creditor and only 10 points would be deducted.

  6. Morning all from gay Paree, slightly overcast but looking forawrd to the holiday weekend: All Saints Day rather than Hallowe’en here.



    Must say I’m dsippointed to read that the rANGERs will probably squirm their way out of their financial woes with minimal impact.



    Anyway, looking forward to tomorrow’s match:


    Saturday 3 o’clock kick-off at Celtic Park.


    The stuff of dreams!

  7. Semir Stilic from Lech Poznan was on Celtic radar since long time. Celtic decided not to buy the player one and half years ago. Now his contract expires in June 2012. One of the options is Legia Warsaw which would be half of the move Rangers to Celtic. Lech and Legia are no friends for sure.


    Player is searching for 500 000 euros/year wages. He is typical 10 in the team.

  8. Good morning from MK where we’re promised a sunny day.



    It looks as if Paul67 has called it correctly and Whtye did have a cunning plan after all.



    Something else on another couple of cunning little barstewards. This morning I see Cameron is starting a new propaganda war against the EU where he’s claiming they’re ‘bombarding’ Britain with regulations to strangle the financial markets in London. His phoney rhetoric is no surprise really considering who finances the Tory party and it was Thatcher’s deregulation that gave the London financial market an unfair advantage.



    A interesting political story that’s about to break.





    Now back to football – The momentum is with us now and I’m looking forward to us steam rolling over Hibs tomorrow.








  9. Tom McLaughlin @ 07:56 ,



    cheers for that -saves me going online and feeling dirty.



    It never ceases to amaze me how they continue to spin . HK’s last sentences But it is understood if Rangers are taken into administration before the outcome of the tax case has been completed they could escape the extra penalty.



    Such a move would leave the club with a CVA and no one to contest it since Whyte would be the main creditor and only 10 points would be deducted.



    is a load of codswallop . The tax bill has been issued – it is on hold pending the appeal but it is still a debt owed by them , and as unsecured creditors , HMRC CAN block any CVA .



    it’s not even accountancy 101 , it’s accounting for dummies .



    Vmhan @ various last night . No probs re the charicatures – OldTim is demonstrating again why this family is special and so are you – HH . Sorry I missed the night out – sounds like a hoot. Maybe next time .



    Bundoran bhoy , i think Mrs CRC , Caity and Deccy keep giving CRC bum-steers re their predictions – how else could you explain some of his predictions ?I mean , Utd 1-6 City ? where did he think of that one !?







  10. Brilliant news for the future of Scottish football this morning.



    The last few years has seen a huge increase in the incidence of Rickets across Scotland. If this continues then it is likely that the country will see the resurgence of the bowly-legged all conquering Scottish winger.



    A victory in the 2026 world cup is almost assured – “oh we’re on the road wae …….”



    Hail Hail




  11. The Honest Mistake (Sickened) on

    That Hugh Keevins article is wrong in so many places, it would be easier to point out where he is correct. No wonder they didn’t tackle the story before.

  12. The club enjoys good commercial relationships with the DR, why is that?



    Answer that correctly then how Celtic and the SPL will deal with the commercial problem that is Rankers FC 2011 becomes clear



    Fairness and justice long outdated concepts

  13. If Rangers think going into admin, coming straight out and try and carry on as a new company will get HMRC of their backs they’re off their heads.

  14. I’m parcellin’ up ole Jobo’s Big Happy Friday shout and sendin’ it to hoopslegend Wim Jansen, because today is his birthday!



    Many happy returns, Wim.



    You only had one season in charge but bhoy did you pick the right one!

  15. THM (sickened) , Greenjedi



    agreed and succinctly put.



    Just had one of my paranoid thoughts.



    Everyone agrees that the MBB has to wait for the tax case to disguise the fact that admin/asset stripping was his plan all along . Yes ? What if this PR exercise is the smokescreen that allows him to do it BECAUSE of the tax case , i.e. get your retaliation in first ?



    Paranoid thought No 2 . His banning of the BBC means they are not hanging round (and more importantly talking to ) rangers employees while he moves the pieces into position ?



    Ok , away to double-check the moon-landing photos.




  16. Morning Celts and a very happy Friday to all you Celtic supporters out there (and Edward ).



    Is today the day the teddy bears have their pitch knicked?



    It’s a glorious blue sky, calm and mild day in the NW of engerlund. I need some help please., when the day of reckoning comes and the HUNS go bust, what champers do you reckon is a good one to purchase?



    I have approx £100 to utilise for this and may consider a few cheaper bottles and spread it around a wee bit, so not sure about the quality over quantity but interested in you’re thoughts mi amigos, thanks in advance (of the hun come-uppence).



    Yours in Celtic



    “Aye ready” to party CSC.



    Ps be quick or all the champers will be gone, cause the engerlish around Manchester will want to toast this innaw.






    HH to ye all!

  17. Off the Record ! on

    CQN fame grows






    Today, 08:43




    No true Ranger has ever failed




    Join Date: 29-07-2006


    Location: South Lanarkshire


    Posts: 1,179


    Re: Scaremongering


    Straight from Hugh’s favourite haunt… CQN?

  18. When whyte pulls the plug surely Celtic will then be the most powerful player in the scottish football scene .


    Technically we only have one vote but we should be in a powerful enough position to make sure the hun’s punishment will fit their crimes.

  19. Vmhan who Supports Neil Lennon says:


    28 October, 2011 at 08:50



    what champers do you reckon is a good one to purchase?





    Not champagne, but I think that Châteauneuf-du-PAPE would be appropriate.






  20. Vinny – I would keep the champers on ice until the day we win the league.



    In the meantime, those e-lites are pretty good.



    When you want to achieve a mellow mood just plug in and play.

  21. The Honest Mistake (Sickened) says:


    28 October, 2011 at 08:33



    Shug has been on RC claiming he couldn’t comment on Rankers financial predicament because of legalities



    Shug has been on RC claiming he is not a financial expert



    Obviously Shug has had succulent lamb from the PR at Rankers which he has duly obliged



    Why do Celtic have a commercial relationship with this rag?

  22. Nuclear Bovril and a Half Munched Pie on

    Vmhan who Supports Neil Lennon says:


    28 October, 2011 at 08:50



    My ignorance of the champagne market is remarkable but a bottle of Moet or Krug should see you right. Should have plenty spends left over to get a load of cheaper but similar tasting Cava. After the first bottle you won’t be caring and anyway, anything should taste pretty damn sweet should the bomb drop today.



    Any word on a poodle briefing AKA press conference at Mordor today?

  23. Typical spin from HK and DR about a topic they know little about. This article is all about placing the blame on someone other than Rangers if they do suffer some penalty.



    See previous articles about the big bad bank not letting them spend any money.



    Someone else is always to blame apart from Rangers.




  24. The Battered Bunnet on

    Why would Keevins run an article like that, then finish it up with mis-information?



    It’s a good thing that Scottish Football is now openly discussing a future after the inevitable, but it doesn’t help when the press run with material that is simply not true.

  25. Costco are selling 6 bottles of Chrystal Champagne for £150 until Sunday if anyone is interested!

  26. Vinnie, go for the Cava and Cava Rose for your good lady.


    Cheap enough to shake ‘n’ soak, and the rose is better tasting than Moet


    IMHO of course,


    and my good lady’s.




    Hail Hail

  27. I am Neil Lennon e El Juarez Bravo on

    I am still in the place I was at 12.50 yesterday. Any attempt by Rangers to parachute back into the SPL as a newco should be met with our immediate resignation. We will be the single most powerful player in the league and therefore any proposal has to suit our objectives.



    The only thing that I am not entirely clear about in the scenario Paul has suggested is how a newco could inherit Rangers current points balance minus 10 points.



    Surely if Rangers were no more, their existing points balance would die with them and the newco club would have to start their league campaign mid-season on zero points?

  28. Why do Celtic players never learn from past mistakes, media-wise? Just reading on the Beeb that Anthony Stokes reckons Celtic will catch Rangers and win the league. Now, we’re all HOPEFUL that we can do it. Mr Stokes seems to be CONFIDENT that we’ll do it. In seasons past, Samaras and Commons have released statements to the media, which only served as motivation to Them. This isn’t exactly on the same scale, but we need to focus on beating the Diddy Teams before we can look at mounting a recovery bid.






  29. Thanks for the prompt replies mi amigos, all of them good advice but DBBIA dinnae encourage the e lites it might put me back on the fags, took me about 5 yrs to give up and not had a puff for almost 30yrs. And DBBIA, I can have two parties eh!?






    HH to ye all!

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