The money-go-round continues as blame game from Rangers' financial collapse pays dividends for some
Following the public reappearance of bombastic former chief executive Charles Green, with his risible claim of having tried to sign Steven Gerrard as player for the Ibrox club, to the Court of Session’s judgement on the competence of administrators David Whitehouse and Paul Clark, the soap opera surrounding the financial collapse of Rangers almost a decade ago has been given a rerun.
The outcome of senior judge Lord Tyre’s deliberations was to order Whitehouse and Clark to pay £3.4 million to BDO, liquidators of Rangers oldco, who had raised the action and alleged ‘breaches of duty’ during the administration process.
While this has been presented in some quarters as a success for BDO, it should be noted that they had in fact issued a claim with the court for almost £47 million.
Lord Tyre breaks down the payment due by Whitehouse and Clark to BDO as - Loss of chance of sale of marketable players £977,500, 125; Loss of chance of sale of Steven Naismith £827,000; Loss of chance of lease and sale of Ibrox Stadium £750,000; Loss of chance of sale of Murray Park £850,000.
His 125-page judgement simply reaffirms the bizarre nature of the administration which was evident at the time, given that Whitehouse and Clark were partners in restructuring practice MCR who were engaged by Whyte as advisors at the time of his acquisition of Rangers from Murray.
While many of their subsequent actions as appointed officers of administrators Duff and Phelps raised eyebrows, there is nothing in Lord Tyre’s ruling which suggests Whitehouse and Clark could have avoided liquidation.
Whyte’s infamous sale of future season ticket revenue to Ticketus and lack of clarity over selling his shares diminished prospects of selling the club out of administration via a creditors’ voluntary arrangement, while largest creditor HMRC’s determination to vote against a CVA made their preferred option of liquidation inevitable.
As ever in this sorry saga, the figures involved in the various strands of litigation it has spawned make eye-watering reading.
For Whitehouse and Clark, settling their obligation to BDO will be helped considerably by the £24 million they have received from the Crown Office, along with an undisclosed out of court settlement with Police Scotland, for malicious prosecution during the fraud investigation into Craig Whyte’s purchase of Rangers from Sir David Murray.
The aforementioned Green was awarded £6.4 million for his complaint against the botched case by former Lord Advocate, James Wolffe, adding to a bill which will ultimately come out of the taxpayers’ pockets.
Ironic, of course, given that the whole farrago can be traced back to HMRC’s pursuit of Rangers for a tax bill of £94.4 million, largely related to the contentious use of an Employee Benefit Trust scheme during Murray’s ownership of the club.
BDO have so far managed to reduce that claim to around £64 million in ongoing negotiations with HMRC, although with a rate of 3p in the £ for creditors their ultimate return will be relatively negligible.
For their part, BDO have racked up remuneration fees of around £6 million so far for the liquidation process. For some, insolvency is a profitable business.
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