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Greig Cameron deputy business editor
With the company voluntary arrangement (CVA) due to be formally rejected tomorrow, liquidation is the next step.
Eventually that will lead to the historic trading entity of The Rangers Football Club plc, which dates back to 1872, being dissolved although the club is likely to continue in a newco formation.
Accountancy firm BDO is, at the behest of HMRC, going to be appointed liquidator with restructuring partner Malcolm Cohen promising a "full and robust investigation into why the company failed".
Typically a liquidator's main function is to collect in and sell the company's assets then distribute the proceeds to the creditors.
But part of that role can involve investigating what has happened at the business if they believe it could lead to a greater return of assets.
That could include looking at areas of the law such as gratuitous alienation, when company assets are disposed of for less than their full value, and unfair preference when the company repays a creditor to the prejudice of the other creditors.
If the liquidator feels aspects of the company's past needs probed in depth they can bring in forensic specialists to examine transactions, emails and correspondence going back over several years.
David Lister, head of fraud investigation and dispute services at Ernst & Young in Scotland, said: "The liquidator has powers which can involve unpicking past transactions although they will only pursue an investigation if they can see a potential recovery of assets for creditors.
"It is a hugely complicated process and it is a very early stage to know what the liquidators will or won't investigate in the case of Rangers but these investigations by their nature are not short.
"Normally we go in and would look at some of the key transactions towards the end of the trading of the business prior to the insolvency event.
"It could go as far as an entire email review and taking an image of the electronic server to see who was saying what to whom and when.
"We would follow the evidence and if necessary the money trails and present a report back to the liquidator.
"The liquidator would then decide whether to pursue legal action."
Creditors – who can expect to share a pot of around £900,000 instead of the £5.5 million proposed under the CVA – can raise specific concerns with the liquidator and point out areas which they believe need to be investigated.
Donald McNaught, director of business recovery and insolvency at the Glasgow office of accountancy firm Johnston Carmichael, said: "It is not a liquidator's job as such to go looking for things to investigate but creditors can bring them to the attention of the liquidator.
"The liquidators are spending creditor's money so there has to be a balance between what is in the creditor's interest and the liquidator's role to maximise the value for the creditors in a collaborative and transparent process."
Although Charles Green and his consortium are said to have a binding legal agreement to buy the assets of Rangers for £5.5m, Duff & Phelps would technically have to consider another offer if one is lodged.
However, Mr McNaught does not believe this will happen. He said: "People have had ample opportunity to come to the table and have not done so.
"Duff & Phelps will rightly argue they have marketed this business as widely as possible and it has been on the market for a number of months."
The £5.5m price is lower than the £8.5m offered for the CVA as the sanctions Rangers will face for reforming as a newco, such as no participation in European competition for three years, mean the assets being offered for sale have a lower value.
The situation of Rangers players and staff is not yet clear with some employment lawyers and the Professional Footballers' Association Scotland suggesting contracts may not be transferrable to the newco as part of the asset sale. That could leave employees applying for jobs with the newco and potentially all of the players being able to walk away for nothing.
Under the TUPE (The Transfer of Undertakings [Protection of Employment] Regulations) process, employee contracts can transfer over but staff can reject the proposal.
On a more positive note the newco Rangers will have no debt, other than a potential loan repayment to Mr Green and his consortium, and no liability to HMRC for any tax cases.
But the club will have no guarantees it can continue to play in the Scottish Premier League (SPL) and there is uncertainty about what sanctions the SPL and the Scottish Football Association would place on it.
