Rangers is a professional football club in Scotland founded in 1872. The club entered financial difficulties during the late 2000s, and the club (trading as The Rangers Football Club plc) entered administration in February 2012. It owed substantial amounts to HM Revenue and Customs (HMRC), who subsequently refused to allow Rangers to exit administration via a company voluntary arrangement (CVA). The Rangers Football Club plc entered liquidation on 31 October 2012.
The refusal of the CVA forced the administrators to sell the business and assets of Rangers to a new company named Sevco Scotland Ltd, operated by Charles Green. The other member clubs of the Scottish Premier League refused to allow the new company to adopt the league membership of the old company. Green then successfully applied for membership of the Scottish Football League. After obtaining the old company's Scottish Football Association (SFA) membership, the company Sevco was then renamed The Rangers Football Club Ltd and Rangers re-entered the Third Division (the fourth tier of the Scottish football league system) in time for the 2012–13 season. Rangers gained promotion back to the first tier of the Scottish leagues in 2016, and in 2021 won their first Scottish league title since the insolvency (55th in total).
Background From the late 1990s onwards, in a period when financial crises and mismanagement were endemic in football, Rangers regularly posted financial losses. By 2009 Rangers owed between £25 million and £30 million to Lloyds Banking Group, who had acquired their account from Bank of Scotland following the 2008 financial crisis, and by that stage team manager Walter Smith stated that Lloyds was effectively running the club.
Rangers then entered a dispute with HMRC, known informally as the 'big tax case', regarding their use of employee benefit trusts (EBT) between 2001 and 2010. A tax bill potentially running to £49 million, including interest and penalties, was assessed by HMRC in 2010. The scale of the potential liability led then-chairman Alastair Johnston to admit in 2011 that the club could go out of business and it was a major reason why the club struggled to find a suitable buyer when it was put up for sale in 2009. There was another £2.8 million tax liability hanging over the club (known as the 'wee tax case') which threatened to prevent any involvement in European football for the following season, although a UEFA licence was eventually granted as the case was still in dispute at the time.
On 6 May 2011 David Murray sold his controlling interest in the club (85.3 percent) to Wavetower Limited, a company solely owned by Craig Whyte, for £1. Murray later said that he had sold to Whyte because he had pledged to pay off the bank debt, settle the 'wee tax case' and invest money in the playing squad and stadium. To enable the purchase and to pay off the debt to Lloyds, Whyte borrowed £26.7 million against future season ticket sales from the Ticketus firm. This agreement with Ticketus was reached before the sale of the club had been completed.
Whyte failed to disclose that he had been previously banned as a company director for seven years. He began defamation proceedings against BBC Scotland in February 2012 regarding two documentaries about him and his purchase of Rangers, one of which later won a BAFTA Scotland award. A subsequent investigation by the Scottish Football Association found that Whyte was not a fit and proper person to run a football club. After the club entered administration, the administrators stated that there was no evidence of investment from Whyte into the club. Murray later said that he deeply regretted selling the club to Whyte, claiming that he had been "duped" and that with fuller information about Whyte he would not have done the deal.
Administration and liquidation Administration period Soon after taking control of Rangers, Whyte failed to remit the pay-as-you-earn tax deducted from his employees to HMRC. On 13 February 2012 Rangers filed legal papers at the Court of Session giving notice of their intention to enter administration. The following day HMRC petitioned the court for authority to appoint their choice of administrator, but this was unsuccessful. Rangers officially entered administration on 14 February 2012, after appointing London-based financial advisers Duff & Phelps as administrators.
On entering administration Rangers were deducted 10 points in the 2011–12 Scottish Premier League, effectively ending their championship challenge. Rangers then failed to submit accounts for 2011 and were therefore not granted a UEFA licence to play in European football in season 2012–13. In April it was revealed that the club's total debts could exceed £134m.
HMRC made clear on 12 June that it would vote against a proposed Company Voluntary Arrangement (CVA). Their formal rejection of the proposed CVA on 14 June meant that Rangers would be liquidated, while the club would have to be reformed within a new company structure. The business and assets of Rangers were sold to Sevco Scotland Ltd, with the accountancy firm BDO due to be appointed as liquidator. Duff & Phelps announced in October 2012 that creditors had approved an end to their administration and that they had applied to the Court of Session for BDO to be appointed as liquidator. This appointment was legally approved on 31 October.
On 25 June 2012, the Crown Office asked Strathclyde Police to investigate the purchase of Rangers and the club's subsequent financial management. This investigation led to a prosecution by the Crown Office, but charges against administrators Paul Clark and David Whitehouse were dropped. Clark and Whitehouse were later paid compensation for the "malicious" prosecution and the Lord Advocate apologised to them on behalf of the Crown.
In February 2017, BDO launched a legal action against Duff & Phelps, claiming damages of up to £28.9 million. Hearings on this action began in May 2021. BDO were awarded £3.4 million, mainly due to Duff & Phelps not pursuing opportunities to sell players and property during the administration period.
Liquidation In June 2015, BDO proposed an interim payment of £10 million to creditors, between 6p and 7p in every £1 owed. Most of the funds were obtained from a successful legal action against Collyer Bristow, the firm of solicitors that acted for Craig Whyte during his takeover of Rangers. This interim payment was due to be made by the end of July 2015, but was delayed by a claim made by Law Financial Ltd. A further payout to creditors depended on the final result of the dispute with HMRC.
A report by BDO published in June 2019, and more widely publicised by The Times newspaper five months later, stated that the amount claimed by HMRC would be significantly reduced from a maximum of £94 million. HMRC dropped a claim for £24 million in penalties, and The Times suggested that the tax component of the debt could also be reduced by up to £30 million. BDO said that discussions with HMRC were ongoing, and that they hoped for a final resolution during 2020. BBC News suggested that creditors, who had received a payment worth 3.9p for every £1 owed, may receive a further 3p. The reduction in the HMRC debt led to some speculation that Rangers could have survived the tax case without entering insolvency, if their board had known the actual extent of the debt before selling the business to Craig Whyte. This speculation was disputed, as the debt due to HMRC was contested, Rangers had other substantial debts (including £18 million to Lloyds Banking Group), and the finance needed to rescue football clubs was not easily available at the time.
In December 2022, BDO and HMRC reached a settlement figure of £56 million.
New company Following the rejection of the CVA, the business and assets of Rangers were sold to Sevco Scotland Ltd, a company owned by a consortium led by Charles Green. While the manager, Ally McCoist and a number of players were willing to transfer, other first team players such as team captain Steven Davis, Steven Naismith and Steven Whittaker refused to have their contracts transferred under TUPE regulations and became free agents. This was disputed by Duff & Phelps, who stated that Green purchased the players contracts and registrations. Rangers subsequently agreed a fee for Davis with Southampton, while Charles Green pursued claims in relation to Naismith and Whittaker.
Another consortium, led by former Rangers manager Walter Smith, made a last minute bid for the assets. This was rejected by Duff & Phelps, who already had a binding agreement to sell them to Charles Green. Walter Smith's consortium, including Scottish businessmen Douglas Park and Jim McColl, made a £6million offer that was also turned down. Charles Green then offered Walter Smith a role and the opportunity for his consortium to invest in the club. On 19 June 2012, Walter Smith and his consortium withdrew their offer. Smith's consortium was originally hostile to Charles Green's consortium but stated that "We wish the new Rangers Football Club every good fortune."
On 20 June 2012, it was reported that two Glasgow businessmen, housebuilders and property developers Allan Stewart and Stephen McKenna were preparing a bid for the club worth about £11m. On 25 June McKenna had a bid of £8.7m rejected. Prominent former Rangers player John Brown had been involved in the bids and made a further attempt to take control by leading a supporter buyout of Green's consortium. Brown left his position as transfer scout after a meeting with Green and told 5,000 demonstrating supporters at Ibrox Stadium not to renew their season tickets, to "starve" them of funds and force them out. Brown challenged Green to show the title deeds to Ibrox and Murray Park, because he suspected that Craig Whyte or Ticketus retained an interest in the assets. Brown also accused Green of "surrendering" to a plot by Celtic chief executive Peter Lawwell, alleging that Lawwell wanted a weak Rangers in the SPL to boost Celtic's own revenues.
Charles Green responded by ridiculing what he saw as the posturing of Walter Smith and John Brown: "It's not right that every two weeks a Mel Gibson appears, delivers a Braveheart statement, then doesn't deliver anything." Malcolm Murray, installed as Chairman of Rangers, appealed for an end to "factionalism" and said: "The vicious bloodlust must end, not only for Rangers' sake but for Scottish football."
By 6 July 2012, Rangers were reportedly facing serious financial difficulties of its own, because only 250 season tickets had been sold. Major Scottish banks including Royal Bank of Scotland, reportedly "concerned at the current uncertainty about the club's future and its backers" declined to provide Rangers with the corporate banking facilities it needed. Metro Bank was hired instead. It was reported that primary sponsor Tennent's would remain with Rangers but would renegotiate a substantially smaller deal.
In September 2015 Dave King, the chairman of the new Rangers company, suggested that the old company could be taken out of liquidation and re-used as the Rangers trading company.
List of players that refused contract transfers
Response of Scottish football authorities Proposed SPL entry