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Wednesday, 15 February 2012

Rangers Enters Administration after HMRC Threat

After being threatened by a "creditors administration", with HMRC petitioning the Court of Session to ask for an independent administrator to be appointed, Craig Whyte blinked and appointed Duff & Phelps to act as administrators.

So will the ten point deduction hand the league to Celtic!

What about the CVA exit route, will HMRC block any administrators' proposals for a CVA ? A CVA requires 75% of unsecured creditors (by value) to vote in favour. Will there be a "Mexican stand-off" if CVA proposals are put in front of HMRC?

Or will the next step be a sale of the assets or business by the administrators? This is going to be hugely interesting.


  1. Do the HMRC currently have over 25% of unsecured debt, given that the EBT case has yet to be determined?

  2. If Rangers do manage to pull off a CVA here, that will greatly increase awareness of CVA's in Scotland; likely to see an increase in use thereafer

  3. Fiona: yes the number of CVAs in Scotland is falsely low. Only 14 last year (a new record high) versus 750 or so in the rest of the UK. Ambivalence by Scottish lawyers, insolvency practitioners and accountants to the CVA process is largely to blame. HMRC Scotland is broadly supportive of the CVA process. But ask Scottish bankers of their opinion on CVA? We have a new Scottish Regional Manager - Derek Robinson and a new Edinburgh office. KSA is working on more than a dozen Scottish clients right now, so hopefully we will see a big rise in Scottish CVA numbers in 2012.

  4. What are the prospects of the Administrators at Rangers being able to get a CVA away successfully, given that the HMRC debt is reputed to be at least £58 million (£9 million post-takeover, £49 million re tax case)?

  5. I have a question on the CVA process I believe that a CVA is possible in Scotland if, the tax history of the business is honest and transparent. however in the case of a company that has used less than honest means for tax evasion or avoidance can a CVA still be offered. If Rangers loose the Big tax case does this brand them as tax evaders and can they possiblr persue a CVA.


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