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. So here we are again – getting stuck into the board, other clubs and the SPL over one speculative article.



    Too much time on your hands chaps.

  2. If they were allowed to get away with this and Celtic were to vote in favour of it , I personally would never watch scottish football again.My season ticket would be binned and the only football I would ever watch again would be on the TV and anything but Scottish games . Surely this cant happen as they would get stronger and we would get weaker as I think a high percentage of fans would feel the way I do about it and just stop going to Matches.

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

    I’ve spoken to one Aberdeen supporter and one Hibs supporter this afternoon, who both want the huns to crash and burn.



    So, if you include me, my survey results are 100% for the “crash and burn” scenario.



    Convincing or what?

  4. When I worked at the ticket office season tickets cancelled part way through the season were given a refund. Is that still the case? The club could find themselves in a position of having to give out a large amount of cash if they support immediate re-entry to the SPL for NewCo part way through the season.

  5. playfusbal4dguilders on

    Paul 67 if



    In such circumstances, the administrator could accept as little as £4m for the unsecured creditors.







  6. merseycelt dumps sadsally says:


    27 October, 2011 at 14:13



    You’ll ned to explain your interpretation of what I said mate because what I just read from you is not a true reflection of what I wrote.



    In asfew as words as possible…



    Either the club I Support does not support a corrupt club, or I withdraw my support. Is there something morally wrong with that? Or do you think I should donate to the UDA ex-servicemans club too?

  7. Truth_Beauty_and_Freedom on

    Hi fellow Celtic Fans!



    Lots of talk about the possible death and resurrection of Rangers. As in any situation my first line of thought is “I LOVE CELTIC! WHA IS BEST FOR CELTIC AND WHAT IS THE RIGHT/MORAL THING TO DO?” This is what being a Celtic SUPPORTER is all about, right? I work hard for my income, and am fortunate in the current climate that I have an income. I think very hard about the financial choices I make. Putting even a single penny, by way of attending away games, into the coffers of other clubs who supported such an immoral and sportingly corrupt concept as a Rangers Phoenix in the SPL is something I would not do. The other clubs might lose income, and yet still survive, from Rangers Paydays if a Rangers Phoenix had to start again at the bottom. I do not think they would survive a total boycott of Celtic fans en-masse not attending away games. Celtic would survive but would have to, certainly initially, cut their cloth to suit in whatever ‘brave new world’ is the outcome of all this. I have to say I am an optimist and I look forward to each new day with joy and Love and hope, thanking God I am a Celtic Supporter. Forget Rangers; the survival of Celtic is what is important!



    The battle lines are being drawn… Which side are you on?



    Yours in Celtic,




  8. TheGreenManalishi(WithTheTwoProngedCrown) on

    I agree with most on here that if this is allowed to happen I for one would wash my hands od Scottish Football. As one who detests the “old firm” tag I would take some convincing that allowing “newco” to exist in the SPL would be to everyone’s financial advantage, utter poppycock, and if anyone disagrees lets see the business case backed up with hard facts and figures. In the words of Gilbert & Sullivan “let the punishment fit the crime”

  9. Hi Paul,



    Really good article and really important this information is out there as I have no doubt as you do that the media will and have already started their campaign on this front.



    Where I see a schism is in something brought up on a comement elsewhere.



    The likes of Messrs Thomson, Milne (& hopefully Romanov) have appeared in their media pronouncements anyway to rail against the domination of the SPL rulebook and the 10-2 voting structure put in place to safegaurd the views of Celtic & Rangers.



    If Rangers were cast out of this structure the road would appear to be clear for the rest of the SPL to push through the major structural and economic changes they appear to desire. The Old Firm would be no more. The subjects of TV payments, wealth distribution, league reconstruction etc would firmly be in their collective hands.



    Obviously the imminent threat of how they would plug the short term financial gap would be there, but would there be sufficient scope in a mandate for change which would in their eyes secure a much fairer long term playing field.



    Their immediate credit and financial circumstances would most likely dictate if they would take the leap for a longer term fix.



    I’m not sure they have the vision……

  10. merseycelt dumps sadsally on




    The huns plead poverty. Cue lots of sympathy from the clubs you listed (excluding hearts who are run by a grade one loon). Why would the men of straw who run these clubs, make life difficult for their favourite scottish institution? Christ, they’d probably start a club lotto to raise funds for their struggling brothers!



    The free market doesn’t work. Evidence-the current finacial crisis!




  11. kitalba



    it`s a no brainer for me as well



    vote to keep the huns …they can run CFC without any help from me

  12. Re the re-admittance of them into the SPL.



    History suggests that boards, chief executives and chairmen the length and breadth of the country will vote according to financial greed.


    Romanov may gnash his teeth, now and again, he may posture like an angry chimp, but ultimately he’ll vote on the same lines as the rest.



    Recently, there was talk of league reconstruction within the higher echelons of Scottish football. Many chairmen, and indeed managers extolled the virtues of expanding the league to either 14 or 16. They identified the benefits it would have especially in renewing supporters interest. How many of you are sick and tired of playing the same teams time and time again? How many are scunnerred going to the same away grounds to the extent that we feel as if they’re second homes?


    Yet when it came to the crunch, those chairmen voted for the status quo. Money, they told us was the reason.



    We will not get the votes which would see the Huns starting at the bottom. We will not get the votes to see them punished suitably. My worry is that not even Celtic FC will vote according to conscience, but will be led by self interest and greed.



    We are on our own and I agree Paul, we will be financially poorer and our crowds will dwindle. Better this than supporting a negligent, sectarian, bigoted organisation.



    We are Celtic not a bit partner in a outdated media driven union.

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



    This phrase should be put on a banner, and unveiled at a certain football match on December 28th.




  14. Imatim and so is Neil Lennon on

    2010 Never Again



    For the Huns to be viable they have to get rid of the tax bombshell hanging over their head.



    What if Whyte is a front for someone and he is only a caretaker so to speak for the real brains behind this scam?



    What if the plan all along has been for Whyte to take the Huns in to administration to circumvent the tax issues and other creditors….this is after all what he does……….and the real brains behind all this is quietly waiting in the wings to waltz in after everyone has been stiffed, including Her Majesty?



    Remembering Lloyds and Murray pushed the Whyte deal through…..that’s on the record. Ask members of the old Rangers Board.



    A knight of the realm couldn’t be seen to be taking Her Majesty for a ride or get his hands dirty like this, could he?



    And if HMRC go after the directors of Rangers……Murray has moved his personal assets to Monaco where they will be safe I would imagine.



    I wonder how close to the truth the above scenario is?



    Feel free to fill in any blanks

  15. merseycelt dumps sadsally – Why would the men of straw who run these clubs, make life difficult for their favourite scottish institution



    Because it’s in their interests to do so.



    The free market doesn’t work. Evidence-the current finacial crisis!



    What a silly thing to say. Like a fish claiming that water doesn’t work, because it once swam into a patch of yellow water.



    Of course it works. Evidence – you’re able to type away on a computer (an amazing device which only became affordable to the likes of you and me thanks to the free market) in what I am sure are conditions of relative comfort and ease, instead of toiling away on a subsistence farm, barely scratching a miserable living before dying in a ditch at the age of 30. (thumbsup)

  16. Lennon n Mc....Mjallby on

    And another thing,I don’t understand how a newco could have the huns points this season,surely if they were re entered they would have none?

  17. Paul67


    Great article.


    Like many others on here if our club helped assist a Newco huns revival,


    i would find it very difficult going back to CP.


    I have a horrible gut feeling the huns will come out of this well


    with or without our support.

  18. 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.



    Big tax case reaches a conclusion in November, December(1),January(2),Feburary(3)



    Quiz. Which of these months can HMRC FC and other creditors hope to raise tens of millions bearing in mind we turned down 29m for Hoops ?




  19. merseycelt dumps sadsally on




    I’m not questioning your principles but our club is not run by egalitarian do-gooders.



    They will act in whatever way they perceive will further Celtic’s (their) best (financial) interests at the time regardless of what you or I think.



    Unfortunately, we do not own our club. DD does!



    Maybe we should disband and create a new Celtic. I’m up for that rather than an away boycott that wont work!




  20. brucecassavetes on

    kitalba says:


    27 October, 2011 at 14:03



    Well said, sir.



    Assisting them in their hour of utmost need sticks in my craw. I’m proud that our club sprang from charitable foundations but this is a bridge too far.



    ‘Didn’t play fair?’, ‘Gain advantage by any means necessary?’ – ‘yeah, no problem – you can count on our vote!’



    Totally unacceptable in my book.

  21. A cynic may suggest that the Celtic board are well aware that the vote would be 10-1 and that newco would be given automatic entry to the SPL.They could save face with the support by publicly voting against it knowing the result.



    Just as well I’m not a cynic.

  22. Trying to understand Prepack admin I searched and found this interesting snippet…check out the last 2 sentences



    The Onlooker



    Under insolvency practitioners guidelines (known as SIPS) the IP must market the business. Often this requires sending sales memos to a database of potential buyers, or the IP may place an advert on his website and/or a local or national newspaper. If he gets no interest or no indication of interest he can then sell to the newco or third party. If there is a lot of interest and several offers, beware your business could fall into a competitors hands! You may still be able to buy the business back, but the outcome is not under your control

  23. MELBOURNE Heart is looking to boost its striker stocks by signing former Celtic and PSV Eindhoven frontman Jan Vennegoor of Hesselink, a tall, strong forward who has played 17 times for the Netherlands.


    The 32-year-old is currently without a club, having finished with Austrian side Rapid Vienna earlier this year. But he is keeping fit by training with his former side, PSV, as he looks to find a new team in the January transfer window.




    Could we do worse than resign the big van.

  24. Imatim and so is Neil Lennon on



    27 October, 2011 at 13:49


    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…






    2010 Never Again



    You mean the same kind of difficulty Murray had in finding a valuer who came in with a Million £100+ valuation of Ibrox?

  25. RaRaRasputin



    Exactly the point I was making. And I’m not sure that attributing nil value to Ibrox is realistic either Paul. I don’t think “Rangers” would come out of this as unscathed as is being suggested.



    Anyway, just my opinion and not necessarily correct, so I’ll leave it at that. Oh and thanks for the site Paul and the magazine and CQNTV. I’m officially addicted.

  26. merseycelt dumps sadsally on




    You’re (wrongly) crediting capitalism for the advances made by humankind as a natural consequence of evolution.



    Or are you a creationist like many of the free marketeers in the capital of capitalism?



    Fact: Of the 9 candidates currently competing for the position as leader of the republican party, only one said he believed in science (when asked)?



    You put your trust in these people?




  27. To a certain sporting institution



    just as you sow you shall reap





    They could belt out a tune





    The more I think about it the more i think fritzagrandold is right, if we can get more players to grab a hold of situations in games, the more we’ll play like last night.

  28. Lads lets see what happens and if they get any help from this corrupt SFA or government then we will take action.





  29. MDCCCLXXXVIII at 14:34



    I’ve been saying for a long time that there should really be a CQN-Addicts Anonymous …




  30. Imatim and so is Neil Lennon



    With respect, not the same thing. Bolstering the balance sheet by revaluing Ibrox will not antagonise the ragings. Being the man appointed as Administrator of Rangers FC will attract enough bile and hatred to put Neil Lennon’s recent troubles in the shade.

  31. Imatim and so is Neil Lennon



    My gut instinct is that Whyte is a useful idiot / front man for someone in the background who will pick the huns up on the cheap after he takes them into admin. Suspect it might be Dodgy Dave King rather than Dodgy Dave Murray, though.

  32. enmac75, the dead club will not be stripped of past titles.



    Pigalle, thanks.



    Vinibhoy, there’s always a bright side…



    RaRaRasputin, Rangers Newco would need to buy Rangers available shares in the league including player registration.



    danso_1888, it’s not a case of trust. I firmly believe there is a high possibility of this coming to pass. Time to get active.



    playfusbal4dguilders, aye, but we’d need to pay for CW’s £18m.



    sharkster, thanks.



    Hamiltontim, well said.



    lynott67, thanks.



    Imatim, he’ll manage that.

  33. Hosepipe time.



    Really, we should do everything that is humanly possible as a club to remove their malignant presence from Scottish football.



    They and presumbaly other clubs were quite happy to see us go out of existence in the 90s.



    No mercy.



    Árd Macha

  34. Hope you guys indulge me with a repost



    Awe_Naw_No_Annoni_Oan_Anaw_Noo says: 27 October, 2011 at 12:16



    I think it is important that we don’t fall for the fraternities urine trail here. Craig Whyte is branded a criminal by BBC Scotland and Private Eye. One an organ of the fraternity the latter always went over easy on British aristocrats.



    Craig Whyte is just a daft wee chancer.



    Lloyd’s forced the sale of hun to him and Sir David Murray moved his personal wealth off shore. None of which made the BBC or private eye.



    The increased efforts by Sir David Murray’s pavlov dogs to avoid the large tax bill is what is driving everything here. They don’t want to end up in jail where they deserve to be.



    Don’t be fooled into focussing on Craig Whyte. He is just s patsy.



    Sir David Murray and his directors Bain and the head of thr SFA Campbell Ogilvie along with a few Lloyds employees are the ones who are sweating here. They have had years to meticulously plan their escape with the help of their acolytes of which there are many.



    The demise of hun FC is not enough. It is and should be the straw that breaks the camels back and exposes how corrupt Scotland as a country truly is.



    If it does not happen and I don’t think it will. I don’t think many of us will deluded into believing that anything has changed.



    A transparent disciplinary process ?



    Let’s not upset our ancestors by prostituting ourselves for less than the beads that the Indians got.



    This is not about schadenfreude or revenge. This is about justice and fairness , what we have always fought for and nothing to do with football or money.



    Justice and fairness first and then we can really show what we are about and another proud chapter in our history that our children will learn from.






    Keep your eye on the ball bhoys and ghirls

  35. Folly Folly at 14:38



    sign me up! Although not sure how you do that since I can’t tell you who I am…

  36. MDCCCLXXXVIII at 14:38



    I have the very man for the job: our very own Philvisreturns: I’m sure he’d relish such a task (not a bad hourly rate, too, Id wager) … and he’s well used to palming away would-be detractors.




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