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Rangers crisis: Creditors take just nine minutes to throw out CVA

HMRC voted down a rescue package for the crisis-hit club during a meeting at Ibrox on Thursday.

Ibrox Stadium
© SNS Group

Rangers have taken a formal step towards liquidation after their company voluntary arrangement (CVA) offer to creditors was officially rejected during a nine-minute meeting at Ibrox.

HM Revenue and Customs (HMRC) opposed the planned pence in the pound pay-off, ensuring it did not achieve the 75% backing required among those owed money.

A breakdown of the votes will be published in "due course" according to administrators, although at the meeting there were three rejections and three abstentions on top of the tax authority's response to the proposal.

Charles Green, the club's prospective owner, also told the meeting his newco entity, currently called Sevco 5088 Ltd, would be renamed The Rangers Football Club, which would be the club's new trading name because of the death of Rangers Football Club plc.

At the meeting of creditors he made a brief statement claiming it was a "time for unity" at Ibrox. Current manager Ally McCoist was present at the meeting, but left before the end without making any comment.

Newspaper reports have speculated that Mr McCoist is close to walking away from Rangers, citing a plot by Mr Green to replace him. However, on Thursday, prior to the meeting, Mr Green said he wanted to keep Mr McCoist and the players at the club despite the liquidation of Rangers FC plc.

Administrators told some of those owed money they would settle any outstanding liabilities before leaving their posts and envisaged that they would hand over the running of the club now to the Sevco group. Paul Clark, of Duff and Phelps, told the meeting that he envisaged the administration process coming to an end in "six to ten weeks".

Neutral insolvency firm BDO will at that point put Rangers FC plc into liquidation, where they plan to pursue former directors for claims and will investigate the financial mismanagement of the club going back years.

The vote on Thursday did not give the unsecured creditors of the club, who are collectively owed up to £134m, the opportunity to question administrators and prospective owner Mr Green about the club’s situation.

Shareholders meeting

Some of the 26,000 small shareholders who have seen their stake in the club disappear with the failure of the CVA deal attended a subsequent meeting, although this was cut short as some fans vented their frustration towards the administrators.

Manager Mr McCoist also attended the shareholders event, the result of which was irrelevant after the failure of the CVA.

Mr Green has previously declined to reveal the backers behind his consortium, but claims it has raised £5.5m to pay Duff and Phelps' £3m bill, £1m to cover the liquidation and the remaining cash covering the purchase of all of the club's assets.

He maintains his proposed newco club could continue to play in the Scottish Premier League (SPL) and previously told STV News he was "confident" the club would be in the top-flight next season.

As a result of the newco switch the club will be banned from taking part in European competition for three years. Should his deal go through, the former Sheffield United chief executive will require the support of seven other SPL clubs for his newco to be allowed to buy over Rangers' share in the league.

He said that negotiations with the SPL and the Scottish Football Association were ongoing, commenting: "We are still negotiating with the SFA and SPL to reach an amicable conclusion to the benefit of Scottish football. We need to carry on talking sensibly and get something that works for everyone."

However, the Professional Footballers' Association (PFA) Scotland has contradicted the claim made by Mr Green and Duff and Phelps that players would automatically have their contracts transferred to the newco.

Fraser Wishart, chief executive of the PFA, believes that under the Transfer of Undertakings (Protection of Employment) regulations players are not legally bound to remain at a newco Rangers.

He said: "It may well be the case that all of the players wish to transfer across to the newco and if that is the case then PFA Scotland will ensure that their rights are protected. The players however are becoming increasingly unhappy at having to operate in an information vacuum whilst their futures are portrayed by others as being a fait accompli with no proper communication and consultation taking place.

"TUPE also places a legal obligation on both the existing company and the newco to formally consult with the union/its members over a proposed transfer. Accordingly, PFA Scotland now looks forward to hearing from Mr Green and being furnished with information regarding the proposed transfer together with details of his plans for the future of the club."

Statement by Duff and Phelps on rejection of CVA by Rangers' creditors

In full: HMRC statement on Rangers CVA rejection

Scotland Tonight to air special one-hour programme on Rangers crisis

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