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Rangers Football Club enters administration Rangers Football Club enters administration
(40 minutes later)
Rangers Football Club has entered administration - meaning the club will be docked 10 points, effectively ending its Scottish Premier League challenge.Rangers Football Club has entered administration - meaning the club will be docked 10 points, effectively ending its Scottish Premier League challenge.
It follows an unsuccessful legal bid by HM Revenue and Customs (HMRC) at the Court of Session in Edinburgh to appoint its own administrator. The club appointed London firm Duff and Phelps as administrators at 14:50.
London-based firm Duff and Phelps was appointed by Rangers at 14:50. The move followed an unsuccessful legal bid by HM Revenue and Customs (HMRC) at the Court of Session in Edinburgh to appoint its own administrator.
It has now emerged that Rangers' game against Kilmarnock on Saturday may not go ahead unless police can be paid.It has now emerged that Rangers' game against Kilmarnock on Saturday may not go ahead unless police can be paid.
Rangers owner Craig Whyte confirmed on Monday that the club had filed legal papers to appoint administrators.
It was initially thought that the club had 10 days to make a decision on whether to proceed, but the HMRC action on Tuesday changed the dynamic of the situation.
'Hugely disappointed'
Duff and Phelps were later appointed as administrators and will now take over the day-to-day running of Rangers while addressing its massive debt problems.
Following the case a spokesman for HMRC said: "We can't discuss specific cases for legal reasons but tax that has been deducted at source from the wages of players and support staff such as ground keepers and physios, must be paid over to HMRC.
"Any business that fails to meet that basic legal requirement puts the survival of the business at risk."
Former Rangers owner Sir David Murray said he was "hugely disappointed" at the club's decision to appoint administrators and expressed surprise at the timing of the decision.
Sport Minister Shona Robison said Rangers' current plight was "a concerning situation for everyone involved in Scottish football".
She said: "Football is our national game and it is now for the administrators to take forward the process of assessing the business and securing an outcome in the best interests of the club, its staff, supporters and the game of football as a whole in Scotland."
Meanwhile, it has emerged that Rangers' game against Kilmarnock at the weekend may not go ahead unless the club can pay policing costs.
In a statement, Strathclyde Police said it had a duty to make sure public resources were used appropriately.In a statement, Strathclyde Police said it had a duty to make sure public resources were used appropriately.
Public resources Financial storm
"We are seeking an urgent meeting with the administrators to ensure that any payment for policing costs at future Rangers games is guaranteed," said the force."We are seeking an urgent meeting with the administrators to ensure that any payment for policing costs at future Rangers games is guaranteed," said the force.
"Until we have such a guarantee we would not be in a position to commit public resources to policing an event unless we had a reassurance that our costs would be met.""Until we have such a guarantee we would not be in a position to commit public resources to policing an event unless we had a reassurance that our costs would be met."
Administrators Duff and Phelps will now take over the day-to-day running of the club while addressing its massive debt problems. The financial storm engulfing Rangers has several fronts.
Sport Minister Shona Robison said Rangers current plight was "a concerning situation for everyone involved in Scottish football". Mr Whyte has acknowledged that the club has a £10m deficit in annual running costs.
She said: "Football is our national game and it is now for the administrators to take forward the process of assessing the business and securing an outcome in the best interests of the club, its staff, supporters and the game of football as a whole in Scotland." It was reported last week that the chairman had also borrowed up to £24m against four years of future season ticket revenue from Ticketus.
Rangers owner Craig Whyte confirmed on Monday that the club had filed legal papers to appoint administrators. Most serious of all, Rangers awaits a tax tribunal decision over a disputed bill, plus penalties, totalling £49m.
It was initially thought that the club had 10 days to make a decision on whether to proceed, but the HMRC action on Tuesday changed the dynamic of the situation. Mr Whyte was reported on Monday as saying this potential liability to HMRC could reach up to £75m if the club lost the tribunal.
The two parties are at loggerheads over a disputed tax bill and penalties of up to £49m. HMRC believes the Ibrox club owes cash over its use of Employment Benefit Trusts (EBTs) to pay staff over a 10-year period.
HMRC believes the Ibrox club owes the cash over its use of Employment Benefit Trusts (EBTs) to pay staff over a 10-year period.
It alleges the Ibrox club did not administer the scheme properly and underpaid tax.It alleges the Ibrox club did not administer the scheme properly and underpaid tax.
Secured creditor
Rangers disputes this and has contested the claim in a first tier tax tribunal, which is due to report within weeks.Rangers disputes this and has contested the claim in a first tier tax tribunal, which is due to report within weeks.
After the club signalled its intention to go into administration, owner Craig Whyte said the eventual tax liability facing Rangers could be as high as £75m - a sum it would be unable to pay. After the club signalled its intention to go into administration on Monday, Mr Whyte said best outcome would be to reach a creditors agreement which would allow the club to continue trading.
He said the best outcome would be to reach a creditors agreement which would allow the club to continue trading.
Mr Whyte is believed to be a secured creditor of Rangers and could collapse the club if HMRC block a creditors agreement.Mr Whyte is believed to be a secured creditor of Rangers and could collapse the club if HMRC block a creditors agreement.
Liquidation threat
The chairman could opt to pursue the legal routes of receivership or pre-pack administration to avoid paying any tax liabilities.The chairman could opt to pursue the legal routes of receivership or pre-pack administration to avoid paying any tax liabilities.
These routes would involve Rangers' assets being transferred to a new company or companies and the old club - formed in 1873 - being left behind with the unpayable debts. It would, almost inevitably, be wound up.These routes would involve Rangers' assets being transferred to a new company or companies and the old club - formed in 1873 - being left behind with the unpayable debts. It would, almost inevitably, be wound up.
Revenue impact
In these cases, HMRC, as an unsecured creditor, would receive very little if anything.In these cases, HMRC, as an unsecured creditor, would receive very little if anything.
If Rangers was wound up, the ramifications for the Scottish game would be far-reaching.If Rangers was wound up, the ramifications for the Scottish game would be far-reaching.
It is likely that existing TV deals, which provide significant revenue streams for Scottish clubs, would be scaled back or in extreme cases cancelled.It is likely that existing TV deals, which provide significant revenue streams for Scottish clubs, would be scaled back or in extreme cases cancelled.
The absence of Rangers fans at other grounds in Scotland would also reduce revenue to competitor clubs.The absence of Rangers fans at other grounds in Scotland would also reduce revenue to competitor clubs.
A rigorous debate is now likely to begin as to whether Rangers hypothetical absence from top-flight Scottish football would be a blessing or a bombshell.