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. TBB



    I have a nokia E72, great phone but for a lad on my vintage the screen is too small for reading CQN..



    Mrs and mini BT have HTC and love them…

  2. Celtic’s u-19 side are back in action tomorrow, away to Kilmarnock at the Kilwinning Sports Centre with an 11.30 kick off, allowing supporters to watch the young hoops before heading on to watch the first team match against Hibs.




    They will need support in Kilwinning.

  3. The Battered Bunnet on

    Awe Naw



    Spec I see on the net says the Desire uses the GPRS network, not 3G.



    Pants no?



    And as for the name… can you not come up with something a little more manly? I’m used to carrying a Razr after all.

  4. Correct me if I’m wrong:



    Rangers going in to Admin is better for them if they do it BEFORE the Tax Case?



    If they do it BEFORE the tax case is over can the Tax Man touch them at all?



    If so then why does every company in trouble with HMRC not go in to admin and start again?



    Surely there has to be some sort of penalty.






    Why, under Administration, when presumably everything of value is sold to pay for outstanding bills, do Newco Orcs get to keep their biggest property asset, Ibrox Stadium, unless of course in the minutae of the deal to buy them they are in fact not in possession of either it or Auchenowie Training facility?



    I am totally confused by all of this.



    I hope our more legally and accounts minded people are able to challenge every attempt they make to wriggle off the very large hook they are on.



    Slippery so and so’s

  5. TheGreenManalishi(WithTheTwoProngedCrown) on

    The Battered Bunnet says



    IMHO you cannot beat the iphone 4, can be tethered to any laptop thereby repalcing your dongle (ooh err!) or if it’s CQN your after you can just access this via the celtic APP




  6. Surely if they go into admin and loose the big tax case, the HMRC can hold of demanding the cash until they come out of admin? Somebody mentioned that Bain & McIntyres cash freeze injuncton could be served when they decided, ie pay day for example. Would the tax bill not be the same?

  7. Don’t really know a lot about the issues Southside – I’m in the “get it right on the pitch” brigade(I can use Brigade in this context?). However in times of weakness I do allow myself a little latitude and imagine their difficulties getting the better of them.



    I was always of the opinion that they would escape handy enough. Never did I allow myself the luxury of thinking they would cease to exist. They would always find enough “wriggle room.” But the case as outlined by Paul67 and in todays Daily Record is more than wriggle room. It drives a tank right through the case against Rangers with all the pressue being put on Celtic as to whether the are allowed back into the SPL. And all the pressure will be on Celtic – even if they are the only club to vote against in a scenario which will render their vote meaninfless anyway.



    Now. A simple question. The pre pac route. Yesterday was the first time I had read about it although I seem to remember some poster alluding to something similar quite a few months ago. But anyway – it seems to be a scenario which is highky likely – and if my reading is correct was always available. I don’t mean the 10 points reduction and a vote to reinstate. That has been discussed at lenghth for some time. But the ability to escape with such a paltry financial penalty is new as is their ability to trade from January. That is new and a shock. At least to me. And if it isn’t new to posters – why the outrage now?

  8. TBB



    HAve to agree with TheGreenManalishi.



    My iphone tethered fine with my Laptop when required.


    Great toy, though I’ve had better actual phones.



    Depends how you use it.




  9. Giggsybhoy



    Don’t worry, I did the same thing this morning….I saw the headlines about Stokes saying we were going to win the league etc. and I groaned, thinking to myself “just do your talking on the pitch”…..but then I read the quotes in the Metro and what he said was perfectly reasonable. In fact, as someone else pointed out, if he had said anything less I’d have been disappointed. We Celtic fans are a hard bunch to please sometimes :)

  10. The Battered Bunnet says:


    28 October, 2011 at 09:19



    HTC Desire HD:



    hook it up to your laptop and yer on CQN in a jiff – they call it tethering…



    It’s a braw mobile !




  11. RobertTressell – Vote Yes for Strike Action on 30th November says:


    28 October, 2011 at 09:42



    “I hope our more legally and accounts minded people are able to challenge every attempt they make to wriggle off the very large hook they are on.”




    If any of Celtic’s hierarchy vote for hun demise, i’ll start to believe in Santa Clause!

  12. bamboo says:


    28 October, 2011 at 08:53


    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.






    I’m not being obtuse here. But can you explain that to me?

  13. Lookin for a wee hand……



    I have an HTC HD and since the site went down last week, each time I access Celticquicknews I can’t get to comments and I get a blank screen with a wee bit of the Magazine Ad on screen. Anyone else get this? Any clues how to get rid of it?




  14. Has anybody in the media or clyde or speirs etc. said or written Rangers have been run unsustainably, buying success has led them to ruin, the use of EBT is being judged as being illegal by HMRC.




    For the first time on Wednesday during the second half I thought do we need Commons. It’s a bit premature but I hope the players out there thought we can do this !

  15. TBB,



    HTC desire HD







    HTC desire HD



    Telstra 3G as in Next G on 850 Mhz, Then their is everyone else on the 800 Mhz Band, If you want to stick with Iprimus grab the non-next g edition of the phone. And yes you can turn off everything as in cellular, 3g, roaming, you cawant. But an android is a lot more advanced then a Iphone and benefits from a always on network as in 3G, for contact sync, emails, FB, twitter, HTC sense, Phone finder But yes you can turn them all off if you want to




  16. The Battered Bunnet on

    Robert T



    If Rangers pull the plug before the Tax Tribunal result it makes no difference to the situation legally. HMRC presented their bill last year, and Rangers have appealed it. If they pull the appeal, the bill is due regardless.



    Rangers will continue to trade for as long as they have cash to trade with. As soon as the cash goes, the company folds as Whyte will not put his own/investors’ cash into a doomed enterprise. He/they will need all the cash they can get to refloat the Newco.



    They only get to keep the stadium etc if they ‘buy’ it from the administrator. I put a quick post up on this topic about midnight last night fyi. Because Whyte’s Group Ltd company is owed £18M plus interest and charges from Rangers plc, they have a negotiating position with the Adminsitrator. Because that debt is secured on Rangers’ assets, the Adminstrator must prioritise settling that debt first.



    The issue is, does Group Ltd have sufficient value in the debt to persuade the Administrator to net the debt off against the property and the players’ registrations?



    Clearly, the longer the club continues to trade, the greater the debt to Group Ltd becomes – interst @ 3% per month – so the trick for Whyte is to run the business as long as possible without putting cash in, hoping that the balance of the debt gets to the point where it matches or exceeds the valuation of the assets ionthe books.



    Being knocked out of Europe means less cash to play with, which means less time for the debt to grow, which is a bummer for Whytey. That said, I expect he’ll get a tasty deal nevertheless.



    Hope that helps.




  17. Paddy bhoy



    I had that two weeks ago, I changed the size using f5, I think that was what sorted it

  18. Another question for the legal eagles on here….



    Obvioulsy we’re all waiting with interest for Whyte’s lawyers to contact the BBC (stop laughing at the back…), but it got me thinking, some of the things Whyte said about the BBC were pretty full on eg “institutional bias”, “lies”, “muckraking” etc. Could the BBC sue Craig Whyte for his comments or is it only an individual that can sue for defamation?

  19. saltires en sevilla on

    Good morning fellow Celts. Clear blue skies in North Hampshire



    Are we there yet?







  20. TheGreenManalishi(WithTheTwoProngedCrown) on

    I for one do not think the pre-pack scenario is as cut and dried as everyone would like us to think. I have heard that this could be challenged in the courts on the grounds that



    a. The club was technicall insolvent when the deal was brokered and this was just a ploy to stiff HMRC



    b. Given Whyte’s previous track record this was a deliberate ploy to shaft the creditors.



    c. Any newco will be a new legal entity and HMRC could ask for a sizeable bond to be paid upfront before allowing any VAT registration / Tax to be processed.



    I think a lot will depend on the resove of HMRC to pursue this. Do we have any posters with a close connection to the workings of HMRC who could shed further light on this ?

  21. The Honest Mistake (Sickened) on

    The Battered Bunnet 28 October, 2011 at 09:55:


    Is the £18 million not the only debt that wavetower have on the floating charge? Surely any other debt accrued would be unsecured an therefore in the same pot as a long list of people. Can the scenario you suggested actually happen?

  22. saltires en sevilla on




    ASDA Extra Special Prosecco (750ml)£9.97


    (£1.33 / 100ml)



    The Italians have been hiding Prosecco for years …(only available on Italian flights etc etc….) now we can all enjoy



    Does everything a good champagne should do …except empty your wallet







  23. Still a bit concerned about Spiers, throw away line on the Clyde phone-in last thursday when he said, “i’m sure the government will step in and, prevent an institution like Rankers FC going out of business ?”



    Now, what does Spiers know that made him say that ? mmmmm

  24. DBBIA



    What’s funny about that, that’s is actually him 4 days into mobanguravember.



    (which is cancelled btw with only you, me, bjmac and larss7onseven giving the nod!)

  25. Mountain_Bhoy is Neil Lennon on

    TheGreenManalishi(WithTheTwoProngedCrown) says:



    any android phone can be tethered to any laptop as well



    hows this for my setup.. £45 1 off payment for pay as you go samsung galaxy android phone handset, £15 a month top up for 5000 free texts, 300 minutes and UNLIMITED 3G.. setup phone as portable mobile hotspot, connect laptop/s, printer etc and I have free broadband solution, which is of course mobile..




  26. We are all looking forward to the demise of the huns in what ever form it takes , but in our hearts we know they will not go away .



    So with that in mind how do we approach the fixture against them on 28th December.



    We have a reciprocal agreement with them covering any damage done by the away supporters , we know the mess they make of Celtic Park , so with this in mind and knowing they have no money to cover the damage what should be our course of action ?

  27. According to sportinglife.com Sproule is free to play tomorrow, the ban applying to the Cup? I though red cards transcended competitions.

  28. The Honest Mistake (Sickened) on

    TheGreenManalishi(WithTheTwoProngedCrown) 28 October, 2011 at 10:01



    “c. Any newco will be a new legal entity and HMRC could ask for a sizeable bond to be paid upfront before allowing any VAT registration / Tax to be processed.”



    This is 6 months VAT up front before a VAT registration is awarded.

  29. Kevin says:


    28 October, 2011 at 10:03



    The scottish government will insist that if they are deducted 10 points then we should also be deducted 10 points, just to even things up. If they can do it with legislation then why not?

  30. Kevin,



    Spiers is a wittering idiot. If you don’t believe me check out FF.






    All BBC Scotland are doing is Sir Davie Murray’s calling. Removing him from the limelight and putting it on Craig Whyte. Craig Whyte has done nothing wrong so far.




  31. Given that the board/CEO have given £10k of ‘our’ money to the poppy-thing, does any one know how much the, ‘Quintessentially British Club’ have donated ?