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Legal drama as Rangers enter administration

RANGERS' distinguished and proud 140-year history, which has seen players and managers win countless matches and silverware, has been dealt a devastating blow in Scotland's highest civil court.

At around 2.50pm yesterday, in a hushed wood-panelled room at No 11 Parliament Square in Edinburgh, the Court of Session placed the club in administration – after an unsuccessful bid by the taxman to appoint its own administrator.

Rangers fans awoke yesterday saddened and confused over the future of the club they love after a series of dramatic events.

They thought the club had 10 days to bring in an administrator to run it after owner Craig Whyte on Monday authorised the club to lodge a notice of intention at the court to place it into administration.

By mid-morning yesterday, events speeded up when it emerged HM Revenue and Customs (HMRC) had also filed a petition for a court-appointed administrator over a Rangers' unpaid tax bill of £9 million. This is in addition to the verdict on a pending tax case, which could leave it facing a £49m bill.

What followed was several hours of stop-start legal argument, before it was revealed that Rangers had brought in financial advisers Duff and Phelps, despite HMRC's bid at the court to get authority for the appointment of interim managers to run the Ibrox club.

Shortly before 3pm, HMRC confirmed it would withdraw its petition against the appointment of an administrator previously connected to the club.

Counsel argued that it was appropriate the company be brought under independent control, rather than an appointee of the club's directors.

HMRC is chasing Rangers for PAYE contributions that had been deducted from staff payrolls across the business and then not passed on to Inland Revenue as well as some VAT, which was included in the £9m, since Whyte took over at Ibrox.

Club sources have said it disputes about 50% of the sum.

Roddy Dunlop, QC, for Rangers, said the basis on which HMRC had brought the petition was that it was unclear whether or not administrators were going to be put in place.

However, Mr Dunlop told the court after taking advice half way through the proceedings: "I have firm instructions the appointment will be made."

David Thomson, counsel for HMRC, earlier said: "There are proper and legitimate issues of public concern which this petitioner seeks to address.

"The position of HMRC is that it is appropriate this company be brought under independent control of some person who has no involvement in this company prior to this date. The proposed administrators nominated by the directors of the club have been advising the club for six months or more."

Lord Menzies agreed to the withdrawal of the HMRC's petition for the appointment of Duff and Phelps immediately.

Mr Dunlop said: "It is simply a question of that appointment being presented to the court and that can be treated as having been presented to the court."

The counsel for Rangers had earlier told Lord Menzies: "The firm intention of the company is today to appoint an administrator. That is what is going to happen absent any interference or prohibition by your Lordship."

Mr Dunlop said "amorphous criticism" of Duff and Phelps had been levelled against the highly respected firm. He added: "It was agreed that HMRC would withdraw their petition and Duff and Phelps would be appointed as administrators."

Rangers FC accepted the liability for HMRC's expenses incurred in drawing up yesterday's petition, the court heard.

However, Mr Thomson said there was no "unseemly rush over who could get the petition in first".

On a dramatic day, Whyte had left his hotel in Glasgow's west end and was driven to Murray Park, the club's training ground, near Milngavie, for a 30-minute meeting with staff. He was later driven to Ibrox Stadium, where he was seen entering the ground with a security guard through a side entrance.

At tea-time, the Scottish Premier League said the club had been deducted 10 points.

SFA chief executive Stewart Regan said: "This is a profoundly sad chapter in the history of Scottish football and we should not underestimate the potential ramifications for the image of the game as a whole.

"I would like to express my deep regret that a Scottish institution should find itself in the kind of parlous state that has necessitated this course of action.

"It is now incumbent on the club to enter into discussions with the appointed administrator to find a resolution on behalf of their creditors and for the Scottish Premier League to apply sanctions in accordance with their regulations."

Former Rangers owner Sir David Murray expressed surprise and disappointment at the latest move at the club. Sir David – who sold his majority shareholding to Whyte in May – also said that, contrary to recent reports, there is no legal mechanism for him to reacquire the club. He added: "Words cannot express how hugely disappointed I am with news of the appointment of administrators to Rangers Football Club PLC."

Whyte, who said he would be seeking early discussions with the administrator, admitted the club had been running at a loss for some time and could not meet liabilities, resulting in the "regrettable" outcome of administration.

He said: "The club did not want nor anticipate having to take this course of action, but had no option. We had hoped continued dialogue with HMRC would mean a decision on administration would not have to be taken for 10 days while all other avenues were explored."

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