The If’s & And’s of the RFC Situation

By Guest writer @606AlfieConn

Over the past number of months there must have been hundreds of thousands if not millions of words written on the subject of RFC and the current situation that the club now finds itself in.
Countless discussions have taken place on forums, chat-rooms, phone-in shows, the written media, TV & pubs.
I would like to look at the possible scenarios and the outcomes of what could and should (in my opinion) happen should each of these scenarios come about. I would also like to be as impartial as possible and forget my allegiances to Celtic FC and try and look at it from, to coin a phrase doing the rounds just now “The good of Scottish Football”.
The way I see it, there are 5 potential scenarios that could take place in the coming months;

  1. Rangers win the Big Tax Case and continue trading
  2. Rangers win the Big Tax Case and enter administration
  3. Rangers win the Big Tax Case but the club is still liquidated
  4. Rangers lose the Big Tax Case and enter administration
  5. Rangers lose the Big Tax Case and are liquidated

I can not see any other situation arising other than the ones mentioned above.
Before looking at the possible outcomes I would like to concentrate on the differences between Administration & Liquidation as there are so many myths and untruths doing the rounds especially by certain sports hacks that take part in radio phone-in shows. Why these guys have not taken an hour out of there life’s to sit down with one of their company’s business correspondents or an Insolvency Practitioner is beyond me. I was always under the impression their job was to report the facts as they are and offer opinion based on the known facts, not to make things up as they go along.
Administration
An administrator is usually appointed by the company them selves or by their lender or major creditor with the sole intention of trading the business through the tough times that it is experiencing.
Their remit is to steady the ship and get the business back on an even keel by returning the business to profitability and to continue trading as a going concern.
The administrator would usually be an Insolvency Practitioner or a Turnaround specialist and the first thing that they would do is to cut any unnecessary costs and get the company in trading in the black ASAP.
In a case such as RFC this would mean getting rid of the high earners as soon as possible, be these in the management team or the playing staff. That could mean quick exits for people such as Ally McCoist, Gordon Smith, Ali Russell etc
On the playing staff a decision would need to be taken as whether to keep the higher earners, all be it on reduced salaries until the next transfer window and try and realise their value as an asset or to cut the loses and get rid on them there and then.
They would also look to sell any available assets such asMurrayParkand a sell and lease back agreement on Ibrox would not be out of the question.
If the company comes through the administration process and this would most likely mean the company entering into a CVA with their creditors, then it would come out the other side as a profitable business but on a much smaller scale.
Administration could take anything from a few weeks to many years to fully implement.
http://en.wikipedia.org/wiki/Administration_(law) 
Liquidation
A liquidator is usually appointed by the court on the request of one or more of the company’s creditors and unlike an Administrator is working on behalf of the creditors and not the business.
A liquidators remit is to realise as much of the value of the company’s assets as possible so that a payment can be made to the creditors, usually as a percentage of what is owed by way of a dividend.
In a case such as RFC the appointed liquidator would decide whether to continue trading the company as a going concern though to the next transfer window and allow the club to fulfil their obligations to the SPL and play all their fixtures when they could then sell the players on the open market. Or they could decide to close the doors on the first day of their appointment and start selling off the assets immediately. Assets would include Ibrox, Albion Ground,MurrayPark, trophies, Intellectual Property etc
The liquidator’s job is to get as much value for the assets as possible so any interested parties would need to pay as close to market value as the liquidator could get.
A Pre-Pack could also be an outcome where a company is set up before the insolvency event to immediately purchase the assets from the liquidator but is such a high profile case I don’t know if this would be feasible.
http://en.wikipedia.org/wiki/Liquidation
Now lets look at the possible scenarios that could possibly take place over the coming months and what the could and should happen for each one.
Rangers win the Big Tax Case and continue trading
If Rangers win the Big Tax Case then there is the possibility that they could actually continue trading as they are. However there would still be extreme financial pressures on the club for the foreseeable future especially with the fact that they have a £10M black hole each year and they have also mortgaged off the majority of their season ticket income for the next four seasons.
If this happens then there should be no punishment to the club as all that they are guilty of is financial mismanagement which has blighted a number of clubs including Celtic in the past.
RFC would need to downsize and cut their cloth accordingly.
Rangers win the Big Tax Case and enter administration
If this scenario happens then again RFC will be guilty of no more than financial mismanagement and will bare the consequences for going into administration. The company would be run by the administrator as above and would be penalised 10 points by the SPL for each season or part of season that it remain in administration.
Rangers win the Big Tax Case but the club is still liquidated
If RFC win the Big Tax Case there is still the possibility that the company could be liquidated due the amount of debt that it is carrying even without the suspected £49M.
If a NewCo is formed and purchase the assets from the liquidator then they would still need to apply for a football licence from the SFA and they would also need to apply for membership to the SFL & SPL.
In any other case this new club would need to apply to be admitted to the Third Division and work their way up from there in the same way as ICT, Livingston & Gretna did.
If the decision was taken to allow this NewCo straight entry into the SPL “For the good of the Scottish Game” rather than working their way up then the NewCo should face a point handicap of say 15 points for the first three seasons in lieu of direct entry.
All of RFC’s history and trophies would be consigned to the history books and NewCo would start afresh.
Rangers lose the Big Tax Case and enter administration
If this scenario happens then RFC will be guilty of financial doping and will have cheated their way to a number of titles and cups along the way. They would bare the consequences for going into administration and the company would be run by the administrator as above and would be penalised 10 points by the SPL for each season or part of season that it remain in administration.
They should also forfeit all the titles and trophies that then won during the period in question as a clear message needs to go out to the football world and especially to the fans and paying customers that the SFA, SFL & SPL will not in any way condone cheating or allow those caught to prosper.
Rangers lose the Big Tax Case and are liquidated
If this scenario happens then again RFC will be guilty of financial doping and will have cheated their way to a number of titles and cups along the way.
In this case all trophies and titles should be forfeited and again the clubs history would stop there and then.
As above if a NewCo is formed and purchase the assets from the liquidator then they would still need to apply for a football licence from the SFA and they would also need to apply for membership to the SFL & SPL.
In any other case this new club would need to apply to be admitted to the Third Division and work their way up from there in the same way as ICT, Livingston & Gretna did.
If the decision was taken to allow this NewCo straight entry into the SPL “For the good of the Scottish Game” rather than working their way up then the NewCo should face a point handicap of say 15 points for the first three seasons in lieu of direct entry.
 
If RFC lose the Big Tax Case then the SFA, SPL & SFL need to step up to the plate and show leadership and put out a strong message that cheating will not be tolerated and that cheats will never prosper over clubs that play by the rules.
We need to remember that if they have cheated HMRC out of taxes then this is out of my pocket and your pocket. They can not be seen to get off with a slap on the wrist.
RFC would need to be seen to be punished appropriately and the message sent to other clubs that not only will cheating not be allowed but that there will be sporting and financial penalties for those clubs thinking of using Administration or Liquidation as a route to negate their debts.
This is a time for transparency and leadership and I just hope that our governing bodies have the balls for the fight.
 
 

Comments

  1. Does anyone know exactly how many seasons the alleged period of financial cheating took place, how many trophies were won in this period and who finished in “second place” for these titles?
    Should Rangers be stripped of these titles, do the runners up have the right to claim the title as their own? The only other example I can think of a similar case is when Juventus and Milan were found guilty of match fixing.

    1. scottsman78 i do remember that italian fa awarded ac milan the title cos of what juventus done but if its a guilty verdict and luquidation then i think sfa or spl will strip them from all they tittles because celtic been 2nd most of the time plus early 90’s motherwell wee 2nd couple times also.

  2. Does anyone know exactly how many seasons the alleged period of financial cheating took place, how many trophies were won in this period and who finished in “second place” for these titles?
    Should Rangers be stripped of these titles, do the runners up have the right to claim the title as their own? The only other example I can think of a similar case is when Juventus and Milan were found guilty of match fixing.

    1. scottsman78 i do remember that italian fa awarded ac milan the title cos of what juventus done but if its a guilty verdict and luquidation then i think sfa or spl will strip them from all they tittles because celtic been 2nd most of the time plus early 90’s motherwell wee 2nd couple times also.

  3. If Rangers are stripped of all titles and they are awarded to us would that not then mean we would have won 11 titles in a row? Now that would really be a kick in the bollocks!!

  4. If Rangers are stripped of all titles and they are awarded to us would that not then mean we would have won 11 titles in a row? Now that would really be a kick in the bollocks!!

  5. The BTC doesn’t concern NIAR. The EBT’s started during the Advicaat era when SDM was getting increasingly desperate. Figures ffrom the RTC blog community suggest it’s McLeish’s titles and arguably into Smith. The most damning example was the year they bought Ferguson back for £6m they avoided/evaded (FTT to decide) £6.25m that year. Buying players with tax moneys if proven means they have to forfeit the trophy. Does anyone think SPL SFA have the balls though, I don’t. Also don’t forget Rangers Company Secretary / Director at the time is now the President of the SFA. Stitch up coming.

  6. The BTC doesn’t concern NIAR. The EBT’s started during the Advicaat era when SDM was getting increasingly desperate. Figures ffrom the RTC blog community suggest it’s McLeish’s titles and arguably into Smith. The most damning example was the year they bought Ferguson back for £6m they avoided/evaded (FTT to decide) £6.25m that year. Buying players with tax moneys if proven means they have to forfeit the trophy. Does anyone think SPL SFA have the balls though, I don’t. Also don’t forget Rangers Company Secretary / Director at the time is now the President of the SFA. Stitch up coming.

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