Liquidation risk remains due to Rangers ‘toxicity’
As offer deadline looms, administrators admit new owners may start afresh
RANGERS’ administrators have admitted liquidation is a possibility for the Ibrox club even if it secures new owners.
Duff & Phelps have given a deadline of Wednesday for “best and final” bids, before choosing a preferred bidder.
In the running are Chicagobased Club 9 Sports; the Blue Knights, headed by former Ibrox director Paul Murray; and a Singaporean consortium.
To date, a move out of administration through a Company Voluntary Arrangement (CVA) has been the focus of the administrators, but they have now given serious credence to the possibility of the club having to be liquidated.
“The preferred option remains a CVA and it remains an option for all of the bidders,” said coadministrator Paul Clark. “And we still think it’s achievable and we’re still recommending that as the preferred course of action to the bidders.
“We must accept, though, that we have in Rangers a financially stricken institution and there is an amount of toxicity in there as a result of what’s gone on. So all of the options have to remain open and it may be that some of the bidders decide that they would rather start afresh.
“We cannot rule out the winning bid could prefer a different structure that meant the sale of the business to a new company and in that eventuality it is certainly possible that Rangers would be liquidated. But it would only be done so after the football club was made safe.”
The latest development came as ousted Rangers chief executive Martin Bain claimed that he warned former club owner David Murray not to sell to Craig Whyte.
In an interview published yesterday, Mr Bain, who was suspended alongside Rangers’ f i nance d i r e c t o r Donald Mcintyre last May, when the takeover by Mr Whyte was approved, said he would have prevented financial irregularities if he had remained in post.
Having dropped his legal action against Rangers but succeeded in having £480,000 of the club’s assets frozen, Mr Bain said he would return the money to the club, minus legal expenses.
“I’ve agreed to release money which is technically mine to Rangers to help the club. I’ve put more money into Rangers over the last couple of days than Craig Whyte ever did,” he was reported as saying yesterday.
“He accused me of ‘irregularities’ and I was suspended but it was obvious there was no way back. Donald Mcintyre was suspended as finance director but it’s clear now why neither of us could continue in our roles.”
Mr Bain spoke about the club’s season ticket deal with Ticketus, in which Mr Whyte secured a £24.4m advance from the London-based finance firm, raised against future season ticket sales over four years.
He said: “Had we remained at the club, then the deal Whyte had with Ticketus would have been known a lot sooner than it was. I would also not have put up with the non-payment of VAT or PAYE – so it was inappropriate for him to have either of us remaining at Ibrox.”
Mr Bain, who was at Ibrox for 15 years, said he had advised David Murray not to sell the club to Mr Whyte. “I first met Whyte as part of an independent board. He was asked a number of questions in relation to his knowledge of Rangers and his plans for the club. We were never satisfied he answered those questions correctly.
“We asked him business-like questions regarding the cashflow of the club and his ability to fund the club going forward. He had his own assumptions on how much was needed and the independent board had theirs. Our opinions were wildly different.
“David Murray knows I was not in agreement that the club should be sold to Craig Whyte.”
He denied accusations that he had been responsible for the tax avoidance that sparked the dispute with HMRC, saying the controversial employee benefit trust had been set up before his arrival.
“I acted in strict accordance with the tax and legal instructions given by the Murray Group. At Rangers we had no in-house legal and tax advice. This all came from the head office of Murray Group,” he said.