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. Joe Filippis Haircut on

    I am probably nieve but for much of my life I thought Scottish football was a fair and level playing field However,following the events at Ibrox over the past few years now leads me to believe that its not a fair and level playing field.Rangers have been simply cheating by not paying the tax man his dues while other clubs have struggled but met all there comitments. Now if the punishment is only that they lose 10 points and everyone who is owed money from them losses out and clubs have lost out on winning trophies because of there cheating we must do everything in our power to make sure that this doesnt happen and that Rangers pay there liabilities or recieve adequate punishment.H.H.

  2. Great article Paul.



    I agree with Voguepunter; it’s your best so far.



    I know next-to-nothing about the world of finance, but I’d be happy to see rangers go down the tube because we’d then have a clear run at the Champions League every year.



    Although qualification and the consequent revenue wouldn’t be guaranteed, we should always be able to compete at the preliminary knock-out level, regardless of any continued downsizing.

  3. merseycelt dumps sadsally on

    philvisreturns et al



    You can make up all the rules that you believe are fair and reasonable; however, if the current rules state that, in the event of administration, … a 10 point deduction will be made etc, why would Newhun FC (same as Oldhun FC) and their co-conspirators (the rest of scottish society minus us) punish them more? Cos that’s the line they will take!



    As an ardent supporter of the..ahem, free market, you should understand better than most how the rich and powerful behave when they are asked to pay their due!




  4. Paul, I get he CW angle, but £22m total consideration for the stadium and players? As you say, CW only needs to come up with another £4m cash in that scenario. Not sure what the total unsecured creditor position is at present, but surely Rangers’ assets have a market value greater than £22m and surely an Administrator is duty bound to seek out the best available offer to maximise the return to all of the creditors and cover his own fees. He’d have to wiegh up CW’s £22m offer against the total he could recover by say selling the best players to other clubs in January and selling the ground separately. Would the latter not generate more than £22m?



    Besides, CW may find it difficult to find an IP willing to acept the apointment. Too much hassle…

  5. surely the other clubs, who on the whole are being run legally (unlike the huns) would see this as an opportunity to break the “old firm” shackles as they often call it; i guess we’ll see just how stiff their resolve is when it comes down to a vote……….

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




    Even if the reborn huns were allowed to continue in the SPL are they not obliged to supply their friends in the sfa with their ANNUAL ACCOUNTS?



    If the insolvency event happens anytime soon, they would be unable to provide their new honest documentation.



    Assuming UEFA rubber stamped participation in Europen Football.

  7. would Romanov vote to allow the new huns in ?



    hells teeth, would Desmond?



    asset protection against integrity …an interesting tussle

  8. listen rangers will never go out the game and thats the truth of the matter.if the shoe was on the other foot we would definitly go out of business ,but them never.i see i didnt take long for some to come on here and call me a hun, some of you dont like to be told the truth.and im just an ordinary celtic supporter who dosent like to see the way my team is playing at present .

  9. philvisreturns says:


    27 October, 2011 at 13:08



    Agree with that plan of action.



    I was against Boycotts as I attend the games ,however it seems its the language they would understand,so yes.



    Our Board need to let it be known what our reaction will be,no indecisive wooly statements like the recent SFA saga.



    Clear intentions,up front, Heads on poles.

  10. to hell with champions league income or any other income, this is not about making it easier for us[or anyone else in the league] to get euro monies,


    this goes to the heart of sporting fairness, they will have been found out to be cheating that cannot be acceptable no matter who does it,


    and duly must be punished accordingly by the rules or else just forget about the game as it would be tainted forever.

  11. new hun fc



    cost £4m






    how will they operate without any income and no line of credit ..how can they pay wages and run Ipox ??

  12. dirtymac, none.



    SFFS, not aware of that one.



    Weeminger, police cannot discriminate against a new company because they have similar ownership or customers to a bad creditor.



    Richie, I’d wear that tee shirt. Thanks.



    p8ddy, indeed.



    DarranH, good to hear from you.



    LivornoBhoy, there could be such a rule but I’m not aware of it.



    BontyBhoy, yes, very depressing. We must, MUST, oppose this move.



    nothing without fans, thanks.



    excathedra44, cheers.



    up_over_goal, I hear you.



    danso_1888, no. There has been a takeover of Rangers since last year, these deals can only happen at the time.



    Sanna, will do.



    enmac75, if Rangers Newco start again, from any league, they are a new company and club and start with no history. The history of Airdrie United starts in Clydebank.



    Poordeadking, many thanks.



    MDCCCLXXXVIII, if an administrator cannot stage a football game he will lock the gates. There is no liquidity in ex-football stadiums. Circa £4m is not a bad days work for an administrator.



    Philbhoy, they can provide anyone with accounts at any time. You don’t need to wait a year to produce accounts.

  13. merseycelt dumps sadsally on

    awe naw



    I’m on your side on this one.



    I dont know if you’re right but I’m enjoying the thrust of your post more than Paul’s (no disrespect intended)!




  14. Paul67



    Strong article. If the scenario you have outlined plays out – and its the most plausible explanation I’ve heard so far as to why Whyte would have bought the club – then I am in absolutely no doubt that the Newco would receive 11-0 backing.

  15. saltires en sevilla on

    David Peter Deans says:


    27 October, 2011 at 13:23



    you may also have misread my request for your views on the ‘famine song’



    not an unreasonable q in the circumstances



    will ask you the same q each time you post



    until you respond







  16. JinkyvJohnGreig-saysitall at 13:36



    I seldom go to away games anymore, so am not really qualified to give views on boycotts … beyond saying that when I did go to (plenty of) away games, I was more than happy to consider the merits of proposals to boycott those clubs which treated us with contempt (and did avoid some grounds as a consequence, but not (as far as I recall) as part of a larger protest). That said, those were times long before t’internet granted fans the rapid communication powerbase we now enjoy.



    But history shows this boycott route seldom pays dividends; even in very recent times.



    If we pressure our own club, however, we might get the it to adopt a plan such as that you suggest: limiting the number of ‘away’ tickets Celtic is willing to handle.



    With regard to Paul’s hypothetical 10-point penalty example, perhaps it is over simplistic and too lenient to have any chance of succeeding: I would imagine the tax authorities and other affected creditors (e.g. police and City Council) would be wary of the consequences of allowing Newco to rise from the ashes in such an easy fashion.



    Perhaps it is more likely that a compromise is reached, whereby Newco has, say, a 25 point penalty (plus, possibly, some other, lesser restrictions or penalties).



    That way the footballing community might escape much of the wrath which would surely follow a mere 10 point slap on the wrist.



    I also imagine that the football authorities need to impose a points penalty sufficient to deter other clubs from quickly following the RFC-Newco Strategy.




  17. INS9603 – Company Administration



    Consideration of Administrator’s proposals When the Administrator’s proposals are received



    Read the proposals carefully, noting the date of the meeting and thedate bywhich the proxy mustbe lodged. the good and bad points



    important features such as



    assets included proposed distributiontocreditors time scale any vague points whether tradingis tocontinue whether eventual liquidationis proposedorthetype ofliquidation whether a Voluntary Arrangement is proposed anything left out information inconsistent with EIS papers. Check the amount of HMRC Debt from IDMS,Heads ofDuty and othersystems (and any manual arrears for debts that are held outside ofthese, such as NetworkUnitCharges).



    Modifications concerning Liquidation A modification has been introducedcovering liquidationwhich states “The companywillmove from administration to Liquidationimmediately following the meeting of creditors / within 3 months.”



    This moderation should be considered in thefollowing scenarios:



    1. where there is a Pre-pack sale of the business. However, if the pre pack sale has been instigated by the qualifying charge holder or is unconnected to the purchaser and there are no compliance issues, then the exit route bydissolution can be agreed.



    2. where we are aware of insolvency offences, or other matters which need to be investigated i.e. company assets sold before theadministration, a sale at undervalue,a preference orwrongful trading.



    3. if a director(s) has been involvedin numerous companyfailures with loss ofcrown monies.



    4. where the company is sold on to an associated company or the same director(s).



    Whether the modification is for immediate liquidation or for the liquidation within 3 months will depend on the circumstances of thecase and is at thediscretionofthecaseworker.






    Where a Pre-pack is identified, this should be added to the dedicated spreadsheet.



    A Companies House search should be carried out where:



    Company crown debt is over £250k It is a Director’s-only application There is a pre-pack The company in administration is a “Phoenix” If the exit route is queried by theAdministrator, we will always look for a CVL. If the administrator states that this is not possible, refer to theCasework Manager. Exceptionally, we maybe preparedto pay the reasonable costs of putting thecompanyintocompulsoryliquidation,



    Rejection The proposals should be rejected in thefollowing scenarios:



    Proposals are sent very late, giving little time toconsider howwe vote. Poor proposals with no defined outcome for creditors/exit route. Large post appointment crown liabilities are outstanding at the time of proposals. There is a second administration by thedirectorforthesame business where large debts have been incurred on this and theprevious company. If you are dissatisfied with theadministrator’s proposals or have clear compliance concerns you must consider voting to reject. If, as a consequence, the administrator fails to seek the appropriate directions of the court we will consider doingso and you shouldrefertotheCasework Manager.



    Recent company accounts received by HMRC Points to consider:



    Look at the value of assets in comparison with the examination of proposals i.e. where salesof business or goods may notbe at true marketvalue.The administratorwillclaim that assets have been professionally valued but they willbe worth farmore tothenew companyifthere is continuity, particularly where contracts and work in progress are involved. Where the director is shown as a debtore.g.the director’s loan account remains outstanding. What information can we obtain on thedirector’s means? Does he ownhisownpropertyand whatis it worth? Where the director is shown as having been paid high levels ofremuneration. Has he taken money out of the business before Administration?








  18. Ten Men Won The League on

    If the Celtic board voted for new bigots FC to replace old bigots FC, then Messrs Desmond, Lawwell et all would be watching Celtic from their cushioned seats in front of no more than 20k every other week



    Thousands would walk away in disgust, and i would be one of them

  19. Hi paul, fantastic and informative article. I have to admit this is completely new to me and i would imagine many other posters. Pretty taken aback i have to say. Could these cheating mankies resurrect themselves without almost any penalties whatsoever? You say we could incur heavy losses well i am willing to incur them for my feelings are let them rot in whatever lower divisions they can get themselves into. The thought that celtic plc would offer them any support fills me with abhorance.


    I may be wrong but i don`t think this will come down soley to scottish clubs to set a predence on this (has it been done before?). The repercussions for the whole game are huge and in any case what would stop all clubs in financial difficulty at this time jumping on the bandwagon and doing the same?


    I think many other interested parties both within and outwith football will be watching carefully as will i.


    hh lbb

  20. Good thought-provoking article.



    I just hope that it is not too prescient.



    If it does come to pass as predicted then we would either have to take action–legal route or bhoycott–or simply share their shame.



    Cheating of this magnitude if allowed to go unpunished would signal the death-knell of Scottish football.



    Rangers have brought dishonour to the Scottish game/name for so long and it would probably be fitting if they killed it off.

  21. Estadio Nacional says:


    27 October, 2011 at 13:25



    If Celtic put coin before ethics and ethos, then it would become very, very difficult for many to continue to contribute towards, and effectively endorse, corporate corruption.



    This is not an ‘auld firm (sic) game in Boston or a joint TV deal we are talking about; we may be in effective giving establishment condoned anarchy (whether it is legal or not) our blessing, unless we stand against it.



    I can’t ever stop being a Celtic Supporter, just like I can’t stop breathing, but I can, and would, withdraw all my vocal and financial support for Celtic PLC if they do not do the right thing by the club, its supporters and most of all… its ethos.



    Like everybody else… I pay tax on the money that I put into Celtic, at the cost of other little luxuries that my kids will never understand. I won’t continue to do so, to by proxy, prop up a bigoted institution that, when it suits, refuses to meet its social obligation and crown dues.



    I will not pay money into any organisation, or club, that under the guise of corporate governance in pursuit of pitiful dividends, would sell my clubs soul, and by extension mine too, into a convenient commercial marriage of deceit with those who despise our very existence.


    I’ll stop breathing before I would do that.



    The club must take into account the wishes of the supporters, for without the supporters there is no need for accountants.



    I’m just a wee guy in Australia who adores my club and revels in the empathetic nature of the global Celtic demographic (family), but I sincerely hope my club hears my voice, for my sake…



    Don’t deal with the devil, not in my name; and if you do, then deal me out.

  22. Lads they will get away with it after all it’s a protestant country and you just need to look at how catholics get treated in this country that says it all.


    It’s time we faced up to reality Rangers Fc can do what they like and nothing gets said whereas if it’s CFC it’s a different story.


    The only way to stop this happening is for all celtic fans to boycott away games and put most of the mini teams out of business..

  23. jude2005 is Neil Lennon \o/ on

    I take it the big casino and the new sorta Vegas and 700 jobs Mr Murray promised is up the Kyber now??

  24. merseycelt dumps sadsally on

    For those who would walk away, when will you come back? Because the vast majority of you will because..



    How do you replace Celtic in your life?



    Answer: You cant!




  25. enmac75 stands shoulder to shoulder with Neil Lennon on

    Paul67 says:


    27 October, 2011 at 13:56


    dirtymac, none.



    enmac75, if Rangers Newco start again, from any league, they are a new company and club and start with no history. The history of Airdrie United starts in Clydebank.






    paul, i was suggesting old rangers titles are stripped from them (if found guilty at the ftt)

  26. merseycelt dumps sadsally – You can make up all the rules that you believe are fair and reasonable; however, if the current rules state that, in the event of administration, … a 10 point deduction will be made etc, why would Newhun FC (same as Oldhun FC) and their co-conspirators (the rest of scottish society minus us) punish them more? Cos that’s the line they will take!



    So, my understanding of this, based on Paul67’s article, is that the remaining clubs have to vote to allow a Huns Reunited team to inherit Rangers’ place in the league.



    They would therefore be in a position to attach conditions to such an arrangement. They would also have every incentive to do so if it improved the chances of Hearts, Motherwell, etc. of competing in the league and/or qualifying for Europe.



    As an ardent supporter of the..ahem, free market, you should understand better than most how the rich and powerful behave when they are asked to pay their due!



    The free market wouldn’t work if people could freely run up huge debts and then wangle their way out of paying them back with only a slap on the wrist to show for it. That would quickly destroy the market, since the crucial element of trust would be destroyed. This situation has nothing to do with the free market. (thumbsup)



    excathedra44 – Clear intentions,up front, Heads on poles.



    I wholeheartedly agree.



    Time to put a bit of stick about.



    Make ’em jump. (thumbsup)

  27. Paul67: Whatever part of my club is dependent on Rangers I am willing to lose.



    I and many others will drink to that.



    Yer best article for a while, sir.




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

    A lot of “suppoerters” throwing the towel in again, if Celtic do this, if Celtic do that!!



    I do not know how the remaining Scottish clubs, including Celtic, will react to the possibility of the new huns getting automatically reinstated to the SPL or being relegated to the third division..



    We should make our decisions to continue/discontinue the support of Celtic when –



    1) The insolvency event takes place.


    2) The SFA decide the way forward for the new huns.


    3) Celtic FC make a statement of their views on the above.



    No point in blowing your blood pressure at the moment.



    Just sit back and enjoy the show.



    C’MON THE CELTS!!!!!!!!!!!!!!!!!!!!!!!!

  29. Vinibhoy - Named Neil Lennon on his birth certificate on



    Maybe the fact that we are struggling at the moment and fighting for 2nd place with Motherwell will end up being a positive.



    SPL teams may feel that a league with no huns and a stuttering Celtic is their best chance at an SPL title in years.

  30. merseycelt dumps sadsally on




    So your solution to rankers getting off (literally) scot free for all their cheating is to financially punish the club you support and has lost more than any other because of the cheating hun barstewards’ actions.



    you call that justice????




  31. Paul67,



    I think this is the route planned by Wavetower, however it is not quite as simple as you make out, primarily because of the player registrations currently held by Rangers. The administrators would have to sell these to Rangers NewCo during the transfer window in order for them to essentially take over player wages. If the administrator has an offer of £1m for Jelavic from Rangers NewCo and an offer of £1.1m from, let’s say, Leicester, then they are duty bound to accept the Leicester offer in the interests of all of the creditors. The administrators will also keep Rangers running until the end of the transfer window to realise market value on all the clubs players before liquidating the company, meaning that Rangers NewCo will join the league outside of the transfer window and therefore unable to sign players. The only way out of this is if Rangers NewCo can make the administrator an offer they can’t refuse for all player registrations. Given what we know about the market value of Rangers first team, expect this would have to be somewhere substantially north of £4m.



    This also ignores other challenges for Rangers NewCo such as securing lines of credit from banks and engaging suppliers for the various tasks needed to run the business – probably quite tricky given that you have just gone bust.



    As I say, I expect this to be the route they go down, but don’t expect Rangers NewCo to re-emerge with only a ten point deduction to worry them.

  32. Philbhoy – It’s just the beginning!



    CQN Free Market Research.



    It saves our club a fortune which they don’t spend on the football department.

  33. the very fact that paul67 has published this article and asked us to let it be known clearly that we should be telling our board


    our feelings on this makes me think even he does not fully trust our custodians on this one,


    no doubt he will admonish me if im wrong.

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