Yesterday Rangers attempted to give themselves some breathing space by signalling an intention to enter administration. This gave them a 10 working day window during which time they could not be taken to court or wound up.
The purpose of this was to give them time to put their proposed CVA to creditors and to seek to reach a deal with HMRC.
As I blogged last night, I did not think that was likely to get anywhere, but I did not except to see things develop so fact.
As Mr Whyte was sitting down, perhaps via Skype, with his chosen insolvency experts, HMRC was hotfoot to the Court of Session.
Lord Menzies is in mid hearing of the HMRC application for its own administrator, based on (a) allegations of millions of pounds of unpaid tax over and above the Big Tax Case and (b) Mr Whyte’s admissions in his statements yesterday that, without a CVA, the club was effectively insolvent already (that is a paraphrase, but a fair one I believe).
The court has adjourned whilst lawyers are racing along the M8 from Glasgow with paperwork to allow Rangers to appoint their own administrator.
Whilst the administrator, unlike a receiver, owes his duty to all creditors, it is well known that an appointment of a “friendly” administrator can make a huge difference to how the process plays out.
David Grier, one of the leading men in Duff & Phelps, the experts appointed by Mr Whyte, was present ion the directors’ box at Ibrox with Whyte shortly after the takeover.
I am not suggesting Mr Grier or his colleagues would not follow the rules, but a friendly face across the table is of huge benefit when an administrator comes to town.
However, if HMRC succeeds in appointing its own administrator, then there will be no “friendly face”. Hard-nosed decisions will be taken which might include cancellation of Saturday’s game. How is the administrator to pay for the costs of putting on a game?
The administrator has a wide discretion, and it is not unusual for arrangements to be made regarding funding, for example, prior to appointment. This might have included the suggestion by Mr Whyte that Rangers FC Group Ltd would support the running costs. Will he maintain that position if an HMRC administrator goes to work?
As I type parties are back in court, and Lord Menzies decision today will have a huge bearing on how things go.
I think we can safely say that, yet again, My Whyte’s penchant for opening his mouth and inserting his foot has struck again!