Rangers FC administrators reveal finances at collapsed club
Duff & Phelps administrators have released a report highlighting their remuneration, trading costs, legal fees and the cost of compiling the failed rescue deal
THE ADMINISTRATORS of Rangers FC have charged less than anticipated for their role at the collapsed Scottish club.
Paul Clark (pictured) and David Whitehouse, partners at Duff & Phelps, were appointed joint-administrators to the club on 14 February.
Earlier this year, a creditors’ report proposed the administrators’ fee would come in at about £5.5m for their work trading the club in administration and pushing through a rescue deal known as a CVA.
However, the administrators have revealed in their latest report that time costs have racked up to about £3.2m for about 16,600 hours’ work from their appointment to 10 August. This includes about £104,000 for proposing the CVA, which HMRC voted against, meaning the deal could not go through.
The CVA would have seen creditors receive between 3p to 9p returned for every pound owed.
In the report’s receipts and payments account, it was highlighted legal fees were estimated to be about £1.3m, legal disbursements £394,000, and property agent fees of £25,000.
Expenditures included player agent fees of about £6,270, legal costs for the Scottish Football Association hearing of £28,100, medical costs of £12,609, and pension contributions of about £107,802.
However, the administrators managed to realise assets of about £10.8m from cash in the bank and player contracts. Included in this figure is £111,607, garnered from Mazars’ special administrators, who recovered money owed to the club following the collapse of financial investment company Pritchard.
Additionally, trading income including ticket and food and beverage sales came in at £4.4m. The club is owed about £3.8m from other football clubs in respect of deferred fees, which will fall due over a period of time up to 31 May 2014.
HMRC are owed about £21.4m, Ticketus £26.7m, and trade and expense creditors about £5.5m.
For a rescue deal known as a CVA to be approved, 75% of creditors by value of debt need to agree the deal.
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A statement from HMRC, at the time it voted against the deal, said: “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.”
The club will transfer its assets, including player contracts, to a new company, RFC 2012 plc, with the old company, The Rangers Football Club, liquidated and its books investigated.
BDO partners Malcolm Cohen and James Stephen have been lined up to take the liquidation appointment, although no timescale for when this will happen has been made available.
A statement in the report said: “The joint administrators have provided a report to the Court of Session regarding Duff & Phelps’ prior involvement with the company and detailing the joint administrators’ conflict review procedures, which were undertaken prior to the administration.
“A similar report has also been provided to the Joint Administrators’ regulatory body, the IPA.”