The Celtic board and the “new Rangers” scenario.

It is hard not to feel somewhat sorry for the Celtic board.

They have, as do any board of directors, a fiduciary responsibility to people like me, Celtic shareholders, to maintain the financial health of the company.

I have noted that the once unthinkable is now being openly discussed in the mainstream media in Scotland that of Rangers going into liquidation.

Few of those who have been following this story, including those who work atop the marble staircase, give Rangers much hope of winning their appeal or getting the assessments reduced to a manageable level.

The basic stance of those in charge of Rangers appears to be “brace for impact!”

There are various scenarios that could be in play following the Scottish champions losing the tax case and one of them is that the club would be liquidated.

If Rangers FC were liquidated there would then be the possibility of a new company or a “New Co” arising and leaving all the bad debts behind.

The much misquoted SPL rules provide for a 10-point penalty for any club experiencing an insolvency event.  However, this only meaningful in cases where the legal entity survives the process.

When a club does not survive, the old club effectively dies and a New Company (NewCo) is created to replace it.

A NewCo would ordinarily start its life being admitted to the Third Division of the Scottish Football League.  As it is a new club with no legal link to the old company, the 10-point penalty that would normally be applied for an insolvency event would not apply.

We can expect a range of kite flying exercises by the people at the of the SFA and the SPL in the coming weeks as they try to figure out ways to drop a NewCo Rangers back into the SPL without having to trudge their way up through the lower leagues.

We should remember while we listen to these ideas that unless imposed as an “entry fee”, the NewCo Rangers will not be subject to ANY automatic points penalty.

If there is any meaning to the term “moral hazard” in Scottish football then there must be more than a slap on the wrists to any Rangers New Co.

It is up to the Celtic supporters to counterbalance the difficult situation that the board of directors find themselves in over a Rangers NewCo.

The Celtic board know they need Rangers in some form to safeguard the financial interest of the shareholders to which they are answerable.

I can think of no more pressing task for the Celtic family than to let the denizens of the Parkhead boardroom be aware that a “soft landing” deal for the Rangers NewCo might make sense to the company might not wash with their customers.

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