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. Kayal33 says:


    28 October, 2011 at 10:08




    Sure Thing M8!



    Hail! Hail!

  2. As the dust settles on yesterday’s post I think the outcome is going to be a Euro ban for 3 years and a points deduction and this will be pushed and hailed and spun as enough punishment. NewCo cannot compete in Europe for 3 years and so all the also rans get to compete for that slot for 3 years as if NewCo were not there but still get the visiting supporters.



    The more I think about it the more I cannot see any other income, and the points deduction will be 10, not 25 since the best scenario for most of them would be NewCo to carry on and deny Celtic the league and for it not to count for European entry for them.



    In ‘weighing up’ both sides of the argument this will be railroaded as the fair outcome.

  3. TheGreenManalishi(WithTheTwoProngedCrown) on

    Mountain_Bhoy is Neil Lennon



    I know there are a lot of phones on the market that are said to be better value than than the iphone in many ways.


    But as someone who spends a lot of time on the road I have the Tom Tom cradle and APP which charges, does the hands free, and plays the ipod thru the music system, works the sat nav and typically Apple these things interchange seamlessly, I love it.

  4. The Honest Mistake (Sickened) ,



    although it hurts my brain , I’ve been trying to follow this argument on RTC. If I understand it correctly , the ‘floating charge’ that Wavetower hold over Rangers (they purchased it for £18M (stop laughing)) allows them to add additional funds/charges almost as and how they see fit (I believe it’s covered in the shareholder circular issued in June). To that extent they’ve been adding (again according to bigger brains on RTC) interest at 3% and management fees onto the ‘floating charge’ – estimates are that they’ve upped it to near £25M !!



    Even if they go belly-up , Wavetower (the MBB) will walk away with a tidy profit – maybe run away would be better as that’s what he’ll need to do to protect him from the ‘enlightened ones’.




  5. ohits says:


    28 October, 2011 at 10:06




    The chickens who run ‘our’ club will turn the other cheek/take it on the chin! IMO!

  6. Whether Rangers go into administration or prepack administration it is irrelvant.


    Celtic should go for the jugular on and off the park.



    Keep winning matches.


    Win the League Cup.


    Buy quality in January to stregthen squad.


    Take the SFA to court for allowing Rangers to compete in Europe at the cost of a CL place to Celtic when they were not financially stable.


    Question the integrity of the league when they lose the big tax case and request the withholding of all trophies won by Rangers during the period of EBT’s by Rangers.



    This is going to blow Scottish football wide open. The route Celtic have to take is to say to various clubs that lost in cup finals against Rangers. You were cheated. Half the team that played against your side were paid illeagally and therefore the cup or relevant trophy should have been yours.



    Do you think various clubs will not be angered that they missed out on a trophy and will just shrug their shoulders and accept it? I have no doubt that some will but some won’t.



    The other consideration is Europe. Rangers embarked on a run that took them to the EL final in Manchester and the sacking of the first English city since William Wallace was on the rampage. Do you think the clubs involved in that run won’t be watching with interest? Fiorentina strike me as a likely team to sue Rangers or the SFA for cheating.



    This is the chance all supporters of diddy team have wanted all their lives. We have all heard them in pubs and at work saying how great it will be when the auld firm go to England and how we get everything our way. Of course when they say auld firm they mean Rangers. This is now their chance to lobby their clubs and put Rangers in the 1st division or below. If they don’t take this action they only have themselves to blame.



    I read a while ago that the TV deal for the SPL can be torn up at Christmas or January. I reckon this is due to Rangers demise. I think that Celtic can get a whole lot of money for their own TV deal. What Celtic should do is set up a TV channel and for games away from home offer the team hosting the match a set amount in return for the match rights.



    It’s strange times but never have clubs in this country had a chance to almost kill one of the ugly sisters as the Jambo’s in particular like to call us and THEM.



    Do these same fans have the guts to kill the Hun and give themselves a better chance of honours? I suspect not but we may see very soon.



    On another note anyone in the Livingston area is welcome to attend a race night fundraiser tonight for Sean Cantwell who was injured on his way to see the Hoops in Rennes.



    He fell from the ferry from Portsmouth and is in a bad way in hospital. He is in recovery but it’s a long way back. He also has no insurance which means his family need to pick up the tab. We are trying to help him out. Please note this is NOT a Celtic night. There are plans to organise a Celtic night tho.






    Bhoy from our bus got a video from Chris Sutton for Seany Bhoy.






    All welcome.




  7. Philbhoy - It's just the beginning! on




    Someone posted that admin staff were paid yesterday.



    Hope you are well!

  8. The Honest Mistake (Sickened) on

    sannabhoy 28 October, 2011 at 10:16:


    And this is legal? No paperwork required to allow this to happen?

  9. Our defence has become vulnerable because we are so much poorer all over the park , disjointed and often appearing dispirited



    our ball retention is appalling and our workrate even worse



    hopefully Wed will prove a springboard to us recovering our form of last season



    imo the return to form of Hooper,Commons and Kayal would help enormously



    add to that the return of Izzy and the good form shown thus far by Matthews/Ledley/Forrest and Mulgrew and hopefully we will get back on track

  10. Sannabhoy



    my son cannae make the game tomorrow ..the foundation can have his ticket if you want

  11. The Honest Mistake (Sickened) ,



    dunno. the accounting and legal wiz’s on RTC seem to accept it . From what i understand , it’s pretty much the modus operandi of the MBB’s companies. Go in to distressed company , keep them running with minimum cash injection , ramp up the fees , then close them up , taking what they can .



    Only difference is , he’s been doing it ‘under the radar’ up to now – he’s never had the public exposure he’s under now.

  12. David Cameron announces that the law prohibiting catholics from becoming king/queen to be scrapped



    Huns wont like that a catholic king,imagine!! thats worse than a 25 points deduction in the league;)

  13. Mountain_Bhoy is Neil Lennon on

    TheGreenManalishi(WithTheTwoProngedCrown) says:



    up until recently I was an iphone man, then I discovered android.. its the way forward.. problem with iphone is that it is only on an iphone.. the big manufacturers with the exception of that finnish failure nokia are using it.. as a result this is where technological boundaries will be pushed. iphone will continue stuttering along using strong marketing and hype but in reality is not in a position now to really push the boundaries..the internet is where its at, any OS that ties fully and seamlessly in with google is the way forward… 90’s was Microsoft, 00’s was apple,10’s will be Google.. just watch.. exciting times ahead

  14. Right can all youse accountants please come to an agreement on what the financial implications are for Rangers. That way we can then start explaining for me……



    Mountain_Bhoy is Neil Lennon says:


    28 October, 2011 at 10:04


    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..






    I love the bit ‘Which is of course mobile’.



    Of course it is! Does that mean it hangs above the weans crib and they gurgle at it.



    I still struggle with ‘press button B’.



    Hail hail




  15. The Honest Mistake (Sickened) says:


    28 October, 2011 at 10:22


    ‘sannabhoy 28 October, 2011 at 10:16:


    And this is legal? No paperwork required to allow this to happen?’




    The paperwork will be the original document from the bank, the benefit of which has been assigned to Wavetower. It will have the interest and penalty clauses.



    Whyte has stated he is not taking a salary, just another reason for the hun hordes to love him.



    What he hasn’t mentioned is the amount he’s clocking up in interest and charges.



    In any other country in the world a journalist would have asked him about it. Not in Scotland though.

  16. I too believe that Craig Whyte has done nothing wrong…so far! He is just a guy to take all the flak when insolvency/administration/punishment kicks in and, for his trouble, he’ll walk away a few million quid richer.



    Meanwhile, we have the real villians, SDM and his former directors, all sitting pretty and seemingly not in the firing line.



    The SFA president and former chief executive of the SFA must also have a responsibility and I do wonder why PL was admitted to their ranks. Are they all a few steps ahead of us?

  17. MurdochauldandHay says:


    28 October, 2011 at 10:28


    ‘David Cameron announces that the law prohibiting catholics from becoming king/queen to be scrapped’




    Would it not be more sensible to announce a law prohibiting anyone from becoming king/queen?

  18. MurdochauldandHay says:


    28 October, 2011 at 10:28




    The storms, hurricanes, monsoons, tsunamis just keep on a coming…..



    The huns must be thankful that the, thunder looks as though its on its way back to CP! IMO!

  19. it looks like China Crisis got it right all those years ago



    Can Tony Blair come out of the Catholic cupboard now?

  20. jackie mac says:



    28 October, 2011 at 09:53



    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.




    First class. That is the great un-mentionable. The truth that dare not speak its name.

  21. Spirit of Arthur Lee



    Great minds and all that, although you are either of quicker mind or a faster typer.

  22. Ernie



    Well said. You’ll be voting SNP next :-)



    But is a king/queen the aristocratic version of bisexual?



    Hail hail



    Estadio (off now before Ernie explodes at the very thought of voting SNP)

  23. The Battered Bunnet@9.19


    I have an iPhone which of course has Internet access…… CQN and emails. When I travel I take my laptop/netbook and” tether” my iPhone to it and gain Internet access. In effect I am using the iPhone as a modem.


    Watching and waiting and thinking of generations of past Celtic supporters.

  24. Gordon_J



    Happy to be corrected over the succession question



    Will the Hun prepack administration or liquidation be the biggest extinction event since the asteroid that hit the earth 75 million years ago and killed off the dinosuars?

  25. greenjedi



    I think you would need the Parousia to save the world from self-immolation if that happened.



    Hail Hail




  26. Mountain_Bhoy is Neil Lennon on

    Estadio, :) I despise cables, anything that reduces need for them is a bonus for me.. havin a mobile phone acting as yer network and everything else is good for me.. now how are they progressing with wireless electricity?? cables be damned!!

  27. ernie lynch says:


    28 October, 2011 at 10:33


    MurdochauldandHay says:


    28 October, 2011 at 10:28


    ‘David Cameron announces that the law prohibiting catholics from becoming king/queen to be scrapped’



    Would it not be more sensible to announce a law prohibiting anyone from becoming king/queen?






    Anyone can become king/queen unless a catholic. The act was written in 16th/17th century when there was pretty much two sides and not much chance of a moor getting to the throne.



    This seems to be coming due to pressure from parts of the comonwealth, and pressure in Australia to do away with the rule meaning a son succedes to the throne at the expense of an older female sibling. There has never been a will to fix the anti catholic portion before, but it can be done if they are changing that act due to pressure from other countries where liz is head of state.



    What about the PM, that job still can’t be done by a catholic.






  28. Careful what you wish lads, catholic schools will go next…..establishment will scrap law bug none will marry a tim, big pics boys look at it!

  29. I think you will find that the royals can married a Catholic,but a Catholic will not be the monarch and all children must beCOE,as the monarch is the head of that church.Tell me who would want t0 join that lot.Slan