Rangers takeover: Duff and Phelps statement in full

David Whitehouse and Paul Clark of Duff and Phelps. Picture: Robert Perry
David Whitehouse and Paul Clark of Duff and Phelps. Picture: Robert Perry
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DUFF and Phelps, administrators of Rangers Football Club, issued the following statement today following the news that HMRC would reject the CVA proposal.

Paul Clark, joint administrator, said today: “We have been informed by HMRC they will not support the proposal for a Company Voluntary Arrangement at the meeting of creditors on Thursday, June 14.

“As a result of this decision, the Sale and Purchase Agreement in place with the consortium led by Charles Green will take effect and Rangers Football Club will continue within a new company structure.

“The reasons HMRC have given to us for their decision to vote against the proposal are as follows. HMRC has cited its general policy of not agreeing to a CVA where there is strong evidence of non-compliance by a company with its tax liabilities.

“HMRC had agreed to consider a CVA proposal along with all other options in the case of Rangers but having taken into consideration the extent of funds which will be made available to creditors through the CVA option, they have decided that it is not acceptable given The Rangers Football Club plc’s level of indebtedness to HMRC.

“It has also been made clear to us that other offers tendered for the Club, which took the form of a CVA, would have been treated in the same way and that the rejection is not a reflection of the Green consortium bid.

“HMRC has taken the view that the public interest will be better served with the liquidation of The Rangers Football Club plc as a corporate entity. The Club will continue to operate as it has always done but within a new company structure.

“HMRC consider that the decision will enable a liquidator to instigate a wider investigation into all of the financial affairs and management of the Club in recent years and to bring to task those they believe are responsible for its collapse.

“Furthermore, HMRC believes there will be an enhanced recovery of funds for creditors by pursuing those individuals who they believe are responsible.

“The consequence of the rejection of a CVA outcome is that sanctions will be applied to the Club by UEFA and that the Club will not be able to participate in Europe for three years and the new company will need the consent of the other SPL clubs to the transfer of the share in the SPL, in order for Rangers to continue playing in the SPL.

“As we have always stated, administrators have a primary objective to ensure the survival of the company and in this case, this would have been achieved through a CVA. It was with HMRC’s approval, that a proposal was placed before creditors for consideration.

“However, it is the commercial view that the level offered within the CVA was not enough to merit departure from their normal policy of seeking a detailed investigation via a liquidator.

“However, we have been left in no doubt by HMRC the fundamental reason for the rejection of the CVA proposal is the historical non-compliance with tax liabilities by the former owners and directors of the Club.

“As we have stated previously, there is a binding contract between ourselves as administrators and Charles Green, who is leading a consortium to acquire the Club.

“The creditors’ and shareholders’ meetings will take place at Ibrox on Thursday but the results of those meetings will now be entirely academic given HMRC’s decision.

“As soon as the CVA proposal is formally rejected, Mr Green’s consortium will move towards completion of an acquisition of the business and assets of The Rangers Football Club plc. That transaction will be completed within a few days.

“The sum payable to creditors will be £5.5 million, most of which has already been paid over to us by the Green consortium.

“Over the coming months, we as administrators will continue to finalise the administration of the Club and we will work in conjunction with BDO who will undertake the liquidation process.

“We would like to thank the staff and supporters at Rangers for their great determination and professionalism during a very difficult period for the Club. While the Club will continue to face difficulties in the short term, it will survive and continue to play at Ibrox.”