Rangers: The CVA Failure

8 By Mark  |   The Ball  |   June 13, 2012  |     18

So farewell then, Rangers’ Company Voluntary Arrangement (CVA) and farewell too, Rangers’ administrators Duff & Phelps (D&P). The announcement that HM Revenue and Customs (HMRC) are going to oppose D&P’s proposals to take Rangers out of administration came as news to many followers of national and local newspapers, TV and radio in Scotland, while it has been flagged as “inevitable” by some bloggers for months on end. The media has long-punted the line that HMRC would agree to take a paltry percentage of the multi-millions of pounds they believe Rangers have underpaid in tax almost throughout this century.

“Deals” had been done with organisations such as HM Treasury. “Nods” had been given to prospective owner, the former Sheffield United chief executive Charles Green.

When former Chelsea star and current TV pundit Pat Nevin asked on March 19th what would happen if a CVA failed, the BBC’s Roddy Forsyth and Daily Record newspaper journalist Keith Jackson refused to answer the question or even countenance the possibility of a CVA failing. Forsyth was particularly adamant that HMRC had told him they would not oppose a CVA if it was “fair and equitable” and facilitated “regime change” (i.e. getting shot of Craig Whyte). “Their words… not mine” Forsyth said, and wrote in his Daily Telegraph column, smug as you like. He must have misheard. Meanwhile, the bloggers, dismissed as Celtic fans on delusional wish-fulfilment exercises or “internet bampots,” continued to insist that liquidation of Rangers was “inevitable,” citing HMRC’s written policy on such matters, all of which has long been publicly available on HMRC’s website.

I failed to share that sense of inevitability until very recently – and, no, I don’t mean until eleven o’clock on Tuesday morning, when the news broke. The Rangers’ saga had had too many twists for my powers of prediction, which aren’t extensive at the best of times. But it arrived when news broke last Thursday of a relatively-ignored event, through the website Random Thoughts Re Scots Law, which, as I’ve written before, has mutated into quite specific thoughts on Scots Law as it has related to Rangers since the spring of 2011. The site’s author, ex-lawyer Paul McConville, placed an emphasis on a “virtual” meeting of Rangers creditors on April 20th which was sadly lacking in the mainstream media’s coverage of the Ibrox insolvency.

The “meeting”  was “virtual” in that creditors were asked to vote on a series of resolutions put forward by D&P, without actually attending a “physical” meeting. The administrators were seeking approval for a whole raft of measures to deal with Rangers’ problems, including powers to take significant actions without the need to seek further creditor approval. These powers essentially allowed D&P to do any sort of deal, short of invading Iran, to progress the administration – powers which are usually sought by administrators, although D&P used them extensively to fashion the, ahem, unorthodox deals with Texas truck tycoon Bill Miller and complete up North type Green. However, D&P were slow, even for them and their movable “final” deadlines, to publish the results of this creditors’ vote. And while the world was looking elsewhere, McConville’s random thoughts kept revisiting the issue. And, as it transpired, rightly so.

Rangers co-administrator David Whitehouse allowed the suggestion to emerge some weeks ago that major club creditors HMRC and ticketing agency Ticketus had “approved”  a CVA. They had, of course, done no such thing. And I assumed that D&P had merely got “approval” to fashion a CVA proposal as they saw fit. As it transpired, they hadn’t even got that “approval.” For when the results of the creditors meeting were finally, reportedly grudgingly, publicised last Thursday, they revealed that HMRC had “modified” almost all the resolutions, including the one to appoint D&P as liquidators, in the event of the CVA failing. HMRC modified that one in order to allow them to appoint their own administrators – Malcolm Cohen and James Bernard Stephen of leading accountancy firm BDO – in D&P’s stead, hence the emergence today of BDO, who many believed should have been in contention to be administrators in the first place. If HMRC wanted to appoint their own liquidators, it seemed unlikely that they had done any of the above-mentioned “deals” and “nods”. And, as we now know, it was.

The responses to HMRC’s decision from Green and D&P have expressed surprise, disappointment and anger, the details – and veracity – of which need a far longer post than this to do cover properly. HMRC, meanwhile, said they opposed the CVA partly because the money available to creditors was insufficient – although they have yet to satisfactorily explain why they could not have done this when the CVA proposal was published two weeks, and £400,000 in administrators’ fees, ago. Their opposition was also partly to facilitate an “investigation and pursuit of possible claims against those responsible for the company’s financial affairs in recent years,” which would incorporate the administrations of David Murray and Craig Whyte and, of course, Duff and Phelps themselves, as they have been “responsible for the company’s financial affairs” for the last four months.

HMRC also provided more clarity than anyone else on Rangers’ fraught near-future, revealing that Rangers’ “new company… will be free from claims or litigation in a way which would not be achieved with a CVA. Rangers can make a fresh start.” Of course, the question of exactly how “fresh” any “start” this is will dominate that near-future. The CVA was one of many complex issues facing the club. The others remain, and they remain as complex as ever. The very fact that “Rangers” will be allowed to vote on whether “Rangers” are allowed to enter the SPL is absurd. But it is going to happen anyway. I will address these issues at, probably, terrifying length later this week. Suffice to say, and to remember over the coming days, that yesterday’s events were “news” only to those who get their news from the likes of Jackson and Forsyth. If they had read those pesky bloggers, Celtic delusionists and internet bampots, yesterday’s events would not have been new(s) at all.

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  • June 13, 2012 at 9:20 am


    Let’s hope the Duyndee United chairman is right when he suggests that Rangers won’t have much sympathy.

    It needs a big club to be removed from a top league in order to stop the clubs taking the piss and using the tax payers money to fund their football team.

    I would throw them out of the league but would accept the Scottish 3rd Division.

  • June 13, 2012 at 11:24 am


    Rangers apparently owe Rapid Vienna a fair chunk of money on the Jelavic transfer in 2010, & Rapid aren’t happy – especially as Jelavic was sold to Everton this January, cash to Rangers.

    This brings UEFA and FIFA more directly into the fray, potentially, which makes the forthcoming SPL vote even more fascinating.

    Time is running out re the 2012/13 season for Rangers. One further challenge to Green or any element of the process, and a Rangers-free Scottish league likely becomes reality.

    Btw Private Eye published this week has a piece regarding why Craig Whyte’s late 1990s problems with the DTI & subsequent disqualification arose.

  • June 13, 2012 at 1:17 pm

    Alan Jones

    Not surprised, as HMRC has always voted against CVA’s ever since they lost their ‘preferred creditor’ status around 10 years ago.

    Rangers should start at the bottom and work their way up. In fact, they should resign from the SPL before the vote and ask to join the SFA.

    At least now there will be a full invenstigation in how the company went bust, with Murray and Whyte being the protagonists.

    But I did notice the administrators ‘costs’ total £5.5m for around 5 months work. Surely there should be an investigation into those as well !!

  • June 13, 2012 at 3:41 pm

    Albert Ross

    I can’t help but contrast the difference in approach between the FA and the SFA…. Darlington fail to agree a CVA, and are treated as a brand new club with a demotion to the Northern League – effectively an extra 2-3 relegations; Rangers fail to agree a CVA, and the club are in with a fair chance of playing in exactly the same league as previously, with a vote that includes themselves and a lot of other clubs who stand to lose out financially from a couple of large attendance games not happening if Rangers aren’t allowed back in….

  • June 13, 2012 at 3:52 pm


    Good point Albert. And the predictable ill disguised bullying threats coming out of Rangers and their mouthpieces in the media about the consequences for Scottish football do them no credit. Precedents have been set with Livingstone and Gretna – Rangers must be subject to the same rules and punishments as everybody else in the same situation. No more and certainly no less.

  • June 13, 2012 at 10:27 pm


    Albert/SW, I am not sure which teams you guys support, but (as a fan of a lower-reaches SPL club) I very much want to see Rangers punished properly (or whatever the newco is called, if that’s what ends up happening). This can surely only mean that they have to re-apply to join the SFL in Division Three. There is no way an essentially new club should be allowed to waltz into the top league.

    But my main reason for posting this here is to make it plain that, whatever the Scottish press may say and whatever our chairmen may end up doing, the appetite of the fans of most teams outwith the Old Firm is for the scenario I describe to the one that unfolds. I am not sure what this website’s policy on linking to others is, so I don’t do it, but will merely say that the fan attitudes I describe can be seen on the mammoth thread on Rangers’ shenanigans in the forum on a Scottish fans’ website called Pie and Bovril. Unless you have lots of time, you won’t be able to read it all (it weighs in at 1700+ pages at the last time I saw it) but the merest dipping in would show how other fans feel. You might not feel the need to see that and that’s ok, but I wanted to highlight this as an example to show that Scottish football fans as a whole DO NOT think it’s ok for a club to cheat on their taxes and engage in financial doping.

  • June 14, 2012 at 12:45 am


    Here is one plain and simple reason they should not get back into the SPL. They have £3.3m they owe to other football clubs for loan wages and transfer fees. Morally for fans and the clubs, Rangers haven’t and won’t ever pay fully for these players who shouldn’t have been playing for the club. So unless Newco pays all £3.3m to the football clubs, it’s a define strike against letting them back in.

    Strike two with how they brought the game into dispute which includes using legal loopholes to save ridiculous amounts of cash.

    Strike three with the sheer amount of debt they collected in an uncompetitive fashion that hasn’t been paid.

    Strike four the potential dual contracts issue.

    Then tip that off the reputation of the Rangers fans who would want to help them. Plain and simple there is no way on earth that they should get back into the SPL.

  • June 14, 2012 at 9:17 am


    Eagerly awaiting the terrible length address :)
    Nice summary – although the P&B board is on top of events it usually lacks the occasional summary.

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