Administration Looms For Football Clubs
Rangers Football Club has confirmed it has filed legal papers at the Court of Session to appoint administrators, while Championship side Portsmouth are also set to enter administration for the second time in as many years.
The Scottish club said it would continue with business as usual until it decided whether to take that step.
Rangers has 10 days to make a decision, but in the meantime, it has insisted there would be “no impact on season ticket holders and shareholders”, while it awaits a tax tribunal decision over a disputed bill, plus penalties – totalling £49m.
Craig Whyte, who bought the club from former owner Sir David Murray last year, said recently that administration was an option if the club lost the tax case.
The case relates to the use of employment benefit trusts (EBTs) to pay players and other staff.
It is thought that HMRC believe the club misused the scheme and avoided paying significant sums in tax.
The club faces a 10-point penalty if it formally enters administration.
Mr Whyte said in a statement released on Monday: ‘Since I took over the majority shareholding of the club in May last year, it was clear to me the club was facing massive financial challenges both in terms of its ongoing financial structure and performance and the potential consequences of the HMRC first tier tax tribunal.’
‘I have taken the decision that the most practical way to safeguard the long-term future of the club is to go through a formal restructuring process. It may still be possible to avert this but that is not the most likely way forward.’
‘What is of paramount importance is the long-term security, survival and prosperity of this great football club.’
Meanwhile, Championship club Portsmouth FC, issued with a winding-up petition by HM Revenue and Customs on 3rd January, were due at the Royal Courts of Justice on 20th February but are now set for administration.
They face a 10-point penalty, which would leave them 21st in the table.
