If you were to believe the mainstream media then Rangers have been suddenly saved, and all is well.
They aren’t, and it isn’t.
As stated previously the deal with the players has only bought Duff & Phelps some time.
They will have to draw up a plan and present it to the creditors and copy the court by the 10th of April.
They have to address three questions:
(1) Is the business a going concern?
(2) For the benefit of the creditors as a whole is it better to continue in Administration rather than liquidate the company?
(3) Should the company continue in Administration to raise enough money to pay off the secured creditor?
If none of these options are possible, then it will be Liquidation.
Option (1) is a nonstarter really as the company’s debts are too large, even before the Big Tax Case (BTC) arrives.
The next option (2) would be likely if the Administrators could show that assets (i.e. players) could be sold in the summer transfer window. This will depend on what “escape clauses” the playing staff had written into the deals they struck for the 75% pay cut. Moreover, other clubs will know of the situation and make lowball offers.
The last one (3) is, at the time of writing, clearly the best one for Craig Whyte. He currently holds the Floating Charge and is, ipso facto, the secured creditor. The Administrators have indicated their intention to challenge the validity of this Floating Charge so off to court we go!
An Insolvency practitioner I contacted stated to me, and with a fair degree of confidence, that the courtroom wrangling over these various matters could go on into the summer that is NEXT summer!
As in the summer of 2013…
Of course, my expert reminded me that a sure-fire way into Liquidation was simply to run out of cash while in Administration.
The cost of these legal battles will come out of Rangers’ existing funds.
As well as that Duff & Phelps wouldn’t be doing their job properly if they weren’t keeping a close eye on their own billable hours and where those monies would come from.
The consensus of the qualified and experienced people I have asked is that the company is likely to “bleed out” of money while still in Administration.
The creditors must give their verdict on what Duff & Phelps will present on the 10th by April 24th, they have two weeks.
The mainstream media that screamed that Craig Whyte was a “billionaire” are trumpeting that HMRC are ready to play ball if only the current owner would leave the scene.
In January 2011 HMRC were approached by Rangers and offered £10million in settlement of the BTC, but Hector flatly refused.
Why would HMRC, now owed another (circa) £16 million and change, be willing to settle for, say, £2million?
Mr Whyte offered to pay back the entire bill of the BTC (approx. £50Million) be offering £2Million per year.
That would have taken twenty years.
The BTC is a wrecking ball swinging in the direction of Rangers.
The only question that journalists should be asking is what will kill Rangers first?
Any prospective owner that the churnalists gush about must have around £100million to lose in this company in order to save it.
Aint going to happen folks.
What IS happening, in my opinion, is grandstanding by people who want to run a NewCo.
What will kill Rangers (1873)?
My money is on the bleeding out in Administration as the cause of death before the BTC hits.
I could be wrong, as there are several variables.
However, I stated many many times on here that Rangers would go into Administration, and they did.
I now don’t see any other option than Liquidation.
The condition is terminal.
What is moot here is the likely cause and time of death.
Recovery is off the table.
Rangers are a going concern the same way the Titanic is currently seaworthy at the bottom of the Atlantic.
The death watch continues no matter what PR generated fluff the churnalists throw at you.
Expect breathless copy about mystery consortia “waiting in the wings” and hints of great wealth.
If I can revert to the West of Scotland vernacular, the stories about impending takeovers by fabulously rich types will be utter pish.
Only a stupid billionaire can save Rangers from Liquidation and there are very few of them around.