Rangers: Ten-point deduction is likely to be thin end of the wedge for club on brink

Rangers: Ten-point deduction is likely to be thin end of the wedge for club on brink

Regarding the most recent development involving Rangers, it is evident that the Ibrox club gave up all

dreams of winning the Scottish Premier League championship for 2011–12 and a quartet of trophies on that day yesterday.

Naturally, the Ibrox club made a point of emphasizing that their appointment of an administrator through a “notice of intent” did not imply an official takeover.

Rangers have five days to see whether they can still reach an agreement with HMRC on the potential liabilities resulting from their tax tribunal,

according to a candid Q&A on the team website.

A ruling on that is anticipated within the next two weeks,

and owner Craig Whyte has revealed in a statement that the club may have to pay far more than the frequently reported £49 million.

HMRC has previously stated that it has no interest in engaging in “plea bargaining.

” HMRC’s objective is to pursue full payment from football clubs without giving in,

even if taking a firm stand could result in not collecting any of the outstanding amount.

With 12 games remaining, Rangers will behind a dominant Celtic team by 14 points due to their administration this week and the ten

-point punishment imposed by the SPL (the regulations defining this consequence for a “insolvency event” are rather clear).

And that is probably only the tip of the iceberg for a team that was driven to the verge of collapse by

former owner David Murray’s egotistical desire to defeat his long-standing rivals.

He tried to do that in the early 2000s by paying players via employee benefit trusts (EBTs),

which are a tax avoidance mechanism.

It appears that the organization managed these pThat is what ought to bring about Armageddon at Ibrox.

In order to exit administration in a way that satisfies football authorities,

Whyte stated that he will work with the club’s creditors to reach a Company Voluntary Arrangement (CVA) during the course of the following month.

As Whyte notes, that deadline is crucial because,

in order for Rangers to compete in Europe the next season,

they must prove to the SFA that they meet the requirements in order to be granted a club license by March 31.

If the club is in administration, they will not be able to pass this requirement.

rograms in a way that convicted Rangers of tax evasion for a ten-year period.

Furthermore, the Rangers Football Club as it was founded in 1873 will essentially cease to exist as a result of the EBTs.

Because very little of what Whyte said yesterday,

or what was made public in the club’s name,

indicates that Rangers anticipate a different result from their tax tribunal than HMRC slamming them with a potentially £75 million demand.

Rangers’ true problem is that a CVA may only be granted if supportive creditors agree to accept a pence-

per-pound settlement and pay for 75% of Rangers’ liabilities.

HMRC appears to be due more than anyone else, but they won’t do it.

Liquidation would then become inevitable. In that case, the administrator’s primary responsibility is to the creditor of choice.

When Whyte purchased Rangers’ approximately £20 million bank loan from Lloyd’s last March, he emerged as the team’s favoured creditor.

In actuality, the remaining creditors would be paid off and Whyte would take the assets in place of his money.

A new set of “phoenix” Rangers would be formed;

as this isn’t mentioned in their official name, they might go by “Glasgow Rangers.

“The six-member SPL board decides “on which basis the transfer of a league share” is permitted.

It is only appropriate that a new Rangers team apply to join the Third Division and become a member of the SFA and SFL.

Based on the statements made by Chief Executive Peter Lawwell,

Celtic would advocate for a solution that would uphold the sporting integrity of the SPL.

It seems unlikely that the board as a whole would take a chance on the stability of the SPL’s finances,

though, since sponsorship and media deals are marketed on the basis of a competitive rivalry between the nation’s two biggest teams.

A three-year points penalty, roughly equivalent to 15 points every season,

is anticipated to be advocated for, both as a means of rebalancing fairness and as a kind of deterrent to others.

The three-year duration would also correspond with the likelihood that a new Rangers team would not be permitted to play in Europe for three years.

Not only could Rangers be exhausting themselves,

but it’s also possible that they’re taking Scotland’s premier league and its footballing heritage with them.