Duff and Phelps bracing Rangers for liquidation
After seven weeks in charge at Ibrox Duff and Phelps seem no closer to a solution and have described Rangers as a ‘financially stricken institution’.
The £600/hour administrators have run up their own hefty bill but have still to clarify the situation regarding Craig Whyte’s shareholding and the complex deal with London based agency Ticketus.
On Friday Ally McCoist openly discussed the liquidation route before Duff and Phelps issued a statement that the consortiums interested in the club must declare their best bid by Wednesday.
There are only three bids left in contention for the club with Paul Clark issuing a stark warning that exiting administration through a CVA may not be possible.
He said: “The preferred option remains a CVA. We still think it is achievable and we’re still recommending that as the preferred course of action to the bidders. We must accept, though, that we have in Rangers a financially stricken institution.
“All of the options have to remain open and it may be that some of the bidders decide that they would rather start afresh.”
“CVA is our option and it remains an option for all of the bidders. However, we cannot rule out the winning bid could prefer a different structure that meant the sale of the business to a new company and in that eventuality it is certainly possible that Rangers would be liquidated, but it would only be done so after the football club was made safe.”
The latest comments from Duff and Phelps are in marked contrast to their introduction at an Ibrox media conference.
Despite having little detail to hand they presented an upbeat message and expressed their confidence that the club would come out of administration with most of the financial problems created by Craig Whyte’s ownership.
On February 16 Clark said: “Looking to the future we are hopeful that a Company Voluntary Arrangement can be achieved and these are measures that are put in place and deal with all of the club’s liabilities.
“As a result of our preliminary assessment we are wholly confident that Rangers will continue as a football club.
“We do not think that liquidation and the closure of the club is a likely outcome at all.
“We need to stabilise the financial position and ensure from now on income exceeds expenditure.
“We fully understand the 140 years history of Rangers Football Club and are taking steps to ensure this history will endure.”
The reality of the situation that Rangers are in has been largely overlooked in favour of short term solutions such as avoiding player redundancies, battling for second place and the future of McCoist.
Liquidation is looking more and more likely, probably before the end of the current season, with the first alarm bells going off a month ago from director Dave King.
On March 7 he stated: It grieves me to state that it seems inevitable that the footballing institution will survive but the company won’t.”
Later on that day Duff and Phelps issued an equally stark warning: “However, no one should be in any doubt that in the absence of sufficient cost-cutting measures or receipt of substantial unplanned income, the Club will not be able to fulfil its fixtures throughout the remainder of the season. “
The liquidation of Rangers before the end of the season will be a catastrophe for the credibility of the SFA and SPL.
With numerous legal issues still to be addressed the re-emergence of a newco Rangers is likely to be even more messy than the administration of the existing club.
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