Hearts could lose £500,000 if Rangers go into administration

By MARK ATKINSON
Published on 14/02/2012 12:01

HEARTS could face losing out on a substantial chunk of the £800,000 due for last summer’s transfer of Lee Wallace to Rangers if the Glasgow club goes into administration.

Rangers, who yesterday began the process of entering administration by lodging papers signalling their intention to do so at the Court of Session in Edinburgh, bought the Hearts full-back in July of last year for a fee of £1.5 million. It is understood the deal was split into three different instalments, the first, a fee of £700,000, was paid when Wallace made the move to Ibrox.

Hearts, however, are still due £500,000 this July, and a subsequent £300,000 next July. Those payments are now in serious jeopardy as Rangers’ financial affairs take a turn for the worse. If the Glasgow club were to enter administration, Hearts would almost certainly face a delay in receiving their money, as administrators would take time to analyse the amounts owed to Rangers’ creditors.

If Rangers agree a company voluntary arrangement (CVA) with their creditors, there would be a risk for Hearts that they would only receive a fraction of the funds owed to them. Should the Ibrox club go into liquidation, Hearts may not receive any outstanding funds.

Last month, Hearts made a proposal to Rangers, in which the Tynecastle club were willing to shave off up to £100,000 from monies due in order to receive £700,000 from the current SPL champions immediately. This arrangement was proposed for the benefit of both parties. However, the Evening News understands that the offer was met with little enthusiasm by officials at Ibrox.

Hearts have also been afflicted by cash flow issues, culminating in three consecutive months of failing to pay wages on time. The club also faces an £150,000 tax bill that must be paid by Thursday to escape a winding-up order, although the club are confident this will be settled.

Directors are expected to meet and discuss the Wallace transfer money once the dust has settled at Ibrox although, with the club not due the first instalment until July, Hearts have not banked on the funds arriving any sooner.

Related Articles

• New reality dawns over Gorgie

  IF THE reality of life as a Hearts player took another bite out of staff morale this month, the club as a whole is finally waking up to the harsh realities of Scottish football.

  0 Comments

• Glenn Gibbons: Steve Lomas misses starting point of Rangers’ financial plight

  STEVE Lomas doubtless induced a collective wince among thousands of Rangers supporters when he ended his criticism of the Ibrox club’s business practices with the observation that “this wouldn’t happen if David Murray was still there; he wouldn’t let it.”

  28 Comments

• Why tax case casts long shadow over Rangers and beyond

  CASH flow issues, a tax tribunal and questions over funding sources have given rise to all manner of conjecture over the future of Rangers under Craig Whyte. Here we look at the three possible outcomes. None of them offers much comfort to followers of the Ibrox club.

  0 Comments

• Broken Rangers: Club signals intention to go into administration

  THE growing storm surrounding Rangers Football Club has finally exploded, throwing into doubt the future of the 140-year-old Scottish institution.

  0 Comments

• Chastened Marr has faith in plan

  THERE will be more cards laid on the table than a Las Vegas casino when Dundee administrator Tom Burton meets with club owners the Marrs and supporters’ group Dee4Life at Dens Park tomorrow. But Peter Marr is convinced his hand will be strong enough to ensure the Tayside club are kept in the game.