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. greenmaestro says:


    28 October, 2011 at 10:43



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




    There’s no bar to a Catholic being PM or holding any other office of state.



    There are guidelines for what should happen if a Catholic holding an office of state has to deal with an issue involving the governance of the CofE. Basically they delegate the task to a non Catholic.

  2. greenjedi says:


    28 October, 2011 at 12:06





    Can a mobi take as good photos as my 15mp 18 optical zoom?



    Can a mobi take as good a video as my 40 optical zoom camcorder?



    Is a mobi as easy to view as my laptop?



    Can it hold as many songs as my MP4?



    Can it get MW like my wee radio/cassette player?






    Good point. And you can fit all of them into your shirt pocket ?

  3. The Honest Mistake (Sickened) says:


    28 October, 2011 at 12:29



    I can’t see it changing. It’s based on all the relevent figures over a rolling 5 year period, which are fixed at the time. The only difference would be very club in Europe moving up one place in the standings, so it might actually benefit Hearts if eg they were due to be the first team in Pot 4 of a draw it might actually move them into Pot 3.

  4. Scotland’s friendly in Cyprus next month will be broadcast live on BBC television, radio and online.



    Will the SFA ensure Rankers players in the squad fulfil media duties with the BBC

  5. Marrakesh Express on

    I cant help thinking that a Clint Eastwood is going to ride into town as the expectant crowd gathers around the gallows. If this were to happen and the bad guy is ‘let loose from the noose’ (AC/DC, 1980), its us who would be the laughing stock. However I remind myself that this is no 1950’s Western. Its more like the Ealing Comedy, The Lavender Hill mob (1951), starring Alec Guinness as Craig Whyte. Big laughs coming our way…soon!




  6. The CofE will be disestablished when the queen dies.



    I reckon that was part of the reason for Pope Benny’s visit.

  7. Guys , did anyone see this story regarding a young fan travelling to Rennes last week.






    A guy in my work goes on the same bus (Livingston No.1) as him and it turns out he had no insurance at all . Turns out he was helicoptered to hospital from the ferry after falling 20 feet. Has been operated on for a rib puncturing his heart , has had reconstructive surgery on his face , yet may still get the go-ahead to come home in a few days . However getting him home may well be a problem as you would expect having that much surgery will require medical assistance yet the guy has no insurance.


    The Livingstone No. 1 are having a fund raiser tonight to try to help out.



    Do you reckon there’s anyway the CQN community could help out . Any posters out there go on the Livi No.1 ?

  8. Rogue Leader



    Call me a poodle if you like… Try to put yourself in the head of a sponsor or TV executive. They’ve placed a value on their investment related to what they hope is the likely return.


    There are no circumstances in which Rangers demise would not affect that potential return. So, is there protection in the contract, are the contracts so weighted in favour of the media that Rangers demise won’t mean it becomes unprofitable – this is possible, so maybe our pointless TV contract will survive. Maybe we can replace it with a contract of our own.


    Maybe Celtic do survive because of our impressive fiscal policy (please someone, somewhere call the irony police on CQN), but how many of our competitors get by when they’re down a million on this years books and no-one knows what next year looks like? I’m guessing 8 clubs go into admin.


    There is no debating that Rangers will try to spin this, they need to. There is no doubt that the media in Scotland have been stupid, slow and unprofessional – there jobs are much too easy. There can be no room for letting Rangers away with this.


    But, that’s as far as it goes. Our football rivalry is of no importance whatsoever when it comes to administration – don’t forget all the people you don’t know to hate who are employed directly or indirectly by Rangers or as a consequence of their existence.


    Nobody is paying me to say this (and it would be totally cool if they wanted to, btw). This is an honestly held, and easily arrived at view – we should make an effort to assist the league and its members to survive. If we don’t we shouldn’t consider ourselves members. We cannot afford to be stuck in a dead league, even if we have the wherewithall to survive the first blast, the fallout will destroy everyone. Indeed even if Rangers pre-pack or whatever, we should already be braced for a nasty few years.


    To be honest, in spite of the anger on show on CQN, I don’t think we’re taking this seriously – we’re still playing the tired Old Firm game.


    I swear the obsession with Rangers will be the death of Celtic. I’m eternally grateful our board are above this kind of thing.


    And in the usual tired CQN tradition, let me state that I would like to see Rangers severely censured over this, including each member of the previous board, including John Greig, being banned from holding any position in Scottish Football ever again. They have brought the SPL to its knees and this can never be allowed to happen again.


    Celtic will not stand in Rangers way. Fact. Celtic should extract every little bit of leverage they can in order to ensure every club follows our model – practically the only club in the UK working with the correct proportion of wages to turnover.

  9. lionroars67 says:


    28 October, 2011 at 12:30



    A fudge. And anyway, the monarch is head of state in 16 countries. But CofE only matters in part of one.



    She is the head of state for 134 million people, I’m sure mush fewer than the 50m population of England care what goes on with the CofE.

  10. The Ghood will prevail on

    I’ve followed the debate with interest on the prepack huns, but can I just suggest aren’t we getting a wee bit ahead of ourselves here? People are calling the league a sham already, yet as far as I can see the huns still exist (tho probably not for much longer), and no attempt has yet been made to instate some prepack huns into the league.


    Also, as far as I’m aware, no ‘journo’ has so much as broached the subject yet. Keevins’ article (I am told – I wouldn’t read or listen to the man) refers to an administration event; a newco only refers to a liquidation event. His speculation about a 25-point deduciton is irrelevant to the newco matter. Isn’t it?


    Surely the instant admission of a newco would have to be instigated by a member club, who would make an extraordinary proposal that the rules be changed and in turn made a mockery of?


    I accept that people with far greater insight than me are second-guessing whyte’s evil plan, but rangers aren’t omnipotent either; remember, in 2008 they tried – and failed – to get the second, longer extension. And while I’m sure the laptop loyal would shout from the rooftops, I believe other clubs would oppose the newhuns’ instant re-entry for the same reasons that are being pronnounced on here – fair play, the credibility of the league, the precedent it would set, and the fact that banks and businesses would be thereafter unwilling to supply SPL clubs with credit. There’s also the small matter of clubs who could be saved from relegation, and clubs (eg us, Aberdeen) whose fans would be outraged at such a move and might never return. And all that’s to say nothing of what HMRC, the financial aithorities and UEFA might have to say.


    Perhaps I’m naive, and I credit Paul and others with this warning shot that we must be ready to oppose such skildugery should it be attempted. I for one would do everything I can to oppose it.


    I would say that if such a scenario came into fruition that it would greatly damage Celtic, because I, and I believe many others, wouldn’t be able to take the league seriously any more, and would lose interest in going along. I’m not advocating a boycott, just predicting apathy. I mean, what would the huns winning the title in the future actually mean? Not that cheating has ever stopped them celebrating before.

  11. Lennon n Mc....Mjallby on




    Thanks for the reply,I don’t think though that changes to refeereeing and licensing should be part of the trading regards the huns punishment and I don’t think there will be time to have the debate about stripping titles or euro bans because if the suspected route is a definite then Scottish football will make sure that when the ball starts rolling it will be stopped as quickly as possible,I honestly don’t think alternative,fitting punishment will be considered and striving titles won during the ebt period shouldn’t be important anyway as their entire history is scrapped under a new company,also regards euro disqualification,we might not even have euro places anyway.



    Rogueleaders idea of researching the reality of a league without the hun and selling it to other clubs pre vote is an excellent idea but if that fails…..

  12. McNair is the greatest on

    Remember Murray got a knighthood for services to business/finance. If the HMRC gets stiffed we only need 100,000 e-petition signatures to get it brought up in Parliament that his knighthood must be removed. The Forfeiture Committee have taken back 29 honours in the last few years. Any takers???

  13. I see that the Daily Ranger is claiming that the worst case scenario for Rangers if they go out of business is a 25 point deduction. They claim that a new Rangers inc, will just pick up where RFC left off, with only a points deduction for their troubles. The timing of this article, the day after yesterdays CQN article, makes it look like the PR war is already underway. The SFA are very quiet on the whole issue, but I suspect that everything possible will be done to keep Rangers inc in the SPL. The mainstream media needs to start reporting on this, rather than being a PR mouthpiece for Craig Whyte!

  14. James Forrest is Lennon on

    Marrakesh Express:



    I’ve heard that argument before, frankly, and I have only this to say.



    If such a person existed Rangers would not be in the hands of the men from Trotters Independant Trading.



    If such a person is out there he/she is going to need unimaginably deep pockets, because whether we’re dealing with Rangers FC as we know it today, Rangers NewCo FC in the Third Division or Rangers NewCo FC SPL with all the attendant nuclear-style fallout that would ensue from a bent decision like that, they are not going to be a major challenge to use for many, many, many years or without significant funds being invested from somewhere.



    Paul67 said yesterday he can even forsee a line of credit being agreed with a bank. Ha! After Rangers have screwed every creditor, large or small, save for their own principal shareholder, that simply ain’t gonna happen, especially as the SPL and SFA will, effectively, have handed every club in the land a Get out of Jail Free card when it comes to paying debt.



    Whatever happens here, the effects for Rangers – both in the short and long term – are going to be huge.



    Whatever happens, the Rangers we know today are about to die. The only haggling now is over how severe the damage is. Something that lasts mere years or decades? Something temporary or something permanent?

  15. Thanks lhads for the info on oao. I had been on the speaker thingy a while ago when it moved there but then i didnt have a laptop for a while and when i went back on i thought everybody had fecked off without telling me.


    Phillynomates CSC

  16. James Forrest is Lennon on




    I’ll say this to you, and leave it at that.



    I don’t care what your motivations are, who pays you or does not, whether you are a Celtic fan who sounds like a Hun or a Hun trying to sound like a Celtic fan … whatever, your argument boils down to this.



    For commercial reasons we should allow a sectarian, bigoted organisation to survive an extinction level event brought about by its own fraudulent, illegal behaviour. And you think our club would not be tainted by that decision forevermore? You think the stink of that decision would not permeate every boardroom in the land, send sponsors running for the hills, make banks impossible to deal with, hand the entire power in the game to one club – and it won’t be us, I assure you – on a formal basis instead of in the unspoken silent way we’ve known about for years, publicly and in full glare of the world …



    You think Scottish Football could survive an event like that? Don’t kid yourself. The SFA is facing two unpalatable choices here. They can act fairly and in accordance with their own rules and assure Rangers will rise through the ranks and, in doing so, benefit every club in the land, large or small, in every league – full houses all round! SPL clubs might die, that’s their own fault, other clubs would thrive and grow and replace them in time – or they can allow the illegal actions of Rangers to go unpunished, tear up the rule book, hand them a free pass and thus make us ALL party to a fraud.



    Paul67 said the MOST pointed thing yesterday in a single line, and I am with him all the way on it.



    “Whatever part of my club is dependent on Rangers I am willing to lose.”



    Scottish Football is certainly far too dependant on them. But I have long argued that what killed the game here was NOT the power of Rangers but the rise of Celtic again to become a major force. Back in the 90’s we had a monopoloy league, but it was workable in many ways and clubs like Aberdeen, Motherwell and Hibs were bigger sides than now. The creation of the duopoly is what destroyed the game and making the smashing of the pardigm will revive it again.



    I know this – the present setup is not working. Instead of fighting to maintain it, the SFA should see this as an opportunity to start again. The Kilmarnock’s of this world are of no interest to me. They have been self-serving for too long, looking out for their own interests to the detriment of the whole game.



    Rangers being forced to play by the rules would accomplish two key things. It would demonstrate to the world that Scottish Football is about more than just two clubs – that would be to the benefit of all.



    And secondly, and most importantly, it would drastically and unquestionably realign the entire balance of our national sport.



    I for one believe it would do so for the better.

  17. Fleagle et al,



    Assuming we on here for the Napster?



    Normally love the Charlie Hall (been down there on a few occasions) but avoiding it today.



    So, I’ll go for Scrapper Smith in the 4:05 @ Ayr.








  18. Morning Lhads,hopefully fleagle will be along shortly.



    I am taking a chance on ‘Farhh’ in the 3.15 Newmarket,well rested not ran for over 400 days.



    Good luck





    Off to the game wi my Dad for the first time since we gubbed Hearts 4-0 in February.



    Section 111 as usual,so hopefully THE GREEN BRIGADE can drown out my tuneless voice!



    Today’s shining light for me is KUMBESHWAAR 300 ASCOT.



    Good luck to all.

  20. Morning lhads,



    I reckon Ruby is up at Wetherby for Poquelin but my nap is



    QUINZ in the Ascot 3.40



    Looking forward to a good win at Paradise this afternoon. Maybe even a decent referee! OK that’s taking it too far. Have the Huns folded yet?








    Unaware of your accident till a few minutes ago,still dunno the details.



    Hope you recover well and soon.






    29 October, 2011 at 09:23



    As far as I know ,Fleagle jumped over a wee wa that ended up a big wa ,oan the other side.


    One triple leg fracture later he realises that he is not a youngster any mer .


    Good luck to the young/auld fella anyways.

  23. oldtim67 says:


    29 October, 2011 at 09:26



    some of us are that far back it would take administration for the leaders to get us back into contention.

  24. voguepunter says:


    29 October, 2011 at 09:51



    Jumping a dyke eh?



    So many jokes in there but as Im entirely pc I wont suggest any.

  25. I am Neil Lennon … Cathal says:


    29 October, 2011 at 09:53



    Seen this am that Tom Scudamore has jumped off two of his preferred rides to ride both for Elliot……..Mmmm

  26. Just heard from Fleagle,he is still in hospital ,had op on thursday and he is


    going to be in his bed a wee while longer.



    Good news is ,he is on morphine and feeling magic,I will (try) keep scores for todays comp









    Jee-zoh. Thanks for the info,mind. Get well soon,FLEAGLE-sair yin.



    CHE 0952



    Damaged ribs myself,so nae cracking jokes like that,please. Very,very sharp…..