Prospective Rangers owner Charles Green has confirmed Her Majesty's Revenue and Customs will vote against a CVA proposal.
Green expresses 'huge disappointment' after HMRC blow
Prospective Rangers owner Charles Green has confirmed Her Majesty's Revenue and Customs will vote against a Company Voluntary Arrangement proposal.
HMRC's no vote is enough to deal a fatal blow to the CVA proposal and Green, who is leading the Sevco consortium aiming to acquire the club, has expressed his deep disappointment.
Green will now push ahead with plans to buy the club's assets and form a new company.
He said in a statement: "I am hugely disappointed by the decision of HMRC not to support the CVA proposal and that disappointment will be felt acutely by Rangers fans across the world."
HMRC, who are currently owed more than £21million, believe their decision to force liquidation will allow them to pursue individuals for the debt.
Protect
A statement from the tax authority read: "A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company's financial affairs in recent years.
"A CVA would restrict the scope of such action.
"Moreover the liquidation route does not prejudice the proposed sale of the club. This sale can take place either through a CVA or a liquidation.
"So the sale is not being undermined, it simply takes a different route.
"Liquidation will enable a sale of the football assets to be made to a new company, thereby ensuring that football will continue at Ibrox.
"It also means that the new company will be free from claims or litigation in a way which would not be achievable with a CVA.
"Rangers can make a fresh start."
SPL future?
The decision brings into doubt the continued existence of an Ibrox club competing in the Scottish Premier League.
If Green forms a new company, he will have to apply to the SPL to acquire Rangers' share in the competition. The clubs themselves will decide whether to accept.
A new Rangers would not be able to compete in Europe for three years under UEFA rules.
Rangers' administrators, Duff and Phelps, confirmed a "binding" sale and purchase agreement with Green would now come into effect.
In a statement, joint-administrator Paul Clark said: "As we have always stated, administrators have a primary objective to ensure the survival of the company and in this case, this would have been achieved through a CVA.
"It was with HMRC's approval, that a proposal was placed before creditors for consideration.
"However, it is the commercial view that the level offered within the CVA was not enough to merit departure from their normal policy of seeking a detailed investigation via a liquidator.
"However, we have been left in no doubt by HMRC the fundamental reason for the rejection of the CVA proposal is the historical non-compliance with tax liabilities by the former owners and directors of the club."
Difficulties
Clark said Green's consortium will move to acquire the club's assets immediately after the formal rejection of the CVA proposal at a creditors' meeting at Ibrox on Thursday morning.
"That transaction will be completed within a few days," Clark added.
"The sum payable to creditors will be £5.5million, most of which has already been paid over to us by the Green consortium.
"Over the coming months, we as administrators will continue to finalise the administration of the club and we will work in conjunction with BDO, who will undertake the liquidation process.
"While the club will continue to face difficulties in the short term, it will survive and continue to play at Ibrox."
