AMERICAN businessman Bill Miller was last week granted preferred bidder status by Rangers' administrators.

Under his plan, the assets of Rangers would be transferred to an "incubator" company – basically a new firm. The old company (oldco) would still retain the club's debts and would be "cleaned up" by striking a deal with creditors through a Company Voluntary Arrangement (CVA). The two companies would later reintegrate. Here we ask financial experts to assess the proposed deal.

Maureen Leslie, a director at insolvency practice MLM Solutions, said the sale of Rangers' assets into a new company was entirely feasible.

But she pointed out that if the companies did reach the stage of being reintegrated, it would rely on Rangers chairman Craig Whyte being willing to give up his shares for the new company (newco).

"We have always thought it would be a stumbling block," she said. "Perhaps a very clever corporate lawyer would have a different take on it, but I can't see there is any mechanism whereby you can force a majority shareholder in a PLC to divest themselves of their shares."

Leslie said it also differed from a normal business which had gone into administration, because of the nature of the employment of football players.

"Normally if this was an ordinary business that had gone into administration and someone had bought the business and assets – and they are the only people able to operate that business – the employees of the insolvent company would have a right to transfer to the newco," she said.

"Under normal circumstance, the vast majority of people exercise that right to transfer – because what else would they do? That is their job and where else would they go?

"In the case of Rangers Football Club though, you have got quite highly desirable young men from an employment point of view. They are people with choices and they certainly can't be compelled to transfer."

Neil Patey, a partner at Ernst & Young in Edinburgh, said the deal was feasible but pointed out it would be viewed as quite unusual outside of football circles.

"In the corporate world outside of football it doesn't really happen very often, as to a certain extent there is no need for it," he said.

"If you are going to buy the assets, there is no real need to then get the oldco cleaned up and then buy it, as there is no value in the oldco.

"The issue here in football is that there is one potentially valuable asset – it is the oldco which has the Scottish Premier League (SPL) membership.

"There have been one or two examples of a similar type structure in English football."

Patey also pointed out the second stage of the deal – the reintegration of the companies – would have to be done by the start of the new season on August 4 to allow Rangers to play, otherwise the newco would have to apply for SPL membership. He added there would be enough time to set up the CVA, but much depended on the attitude of Craig Whyte.

"It is what approach does Craig Whyte take, if he decides to dig in his heels and not transfer his shares voluntarily, I don't think it will be done by August 4," he said.

"If you don't do it by August 4, at that point the SPL presumably would have to grant the membership otherwise Rangers won't be playing on the first day of the season.

"Unless you do that second stage (the reintegration of the companies) by August 4, you would question whether there is any point in doing it any more, frankly."

Professor David Hillier, Vice-Dean at Strathclyde University Business School, said the first stumbling block to the deal is that Whyte could potentially try to block the formation of the newco through the courts under insolvency legislation, if he believes it is unfair or detrimental to his interests.

"Craig Whyte has the opportunity to benefit at two stages – the first stage where he may try to block, and then there might be a deal where he is paid off at that point," he said.

"Or [he could benefit] at the third stage where you have the merger and he would then be looking for something for his shares."

He said the formation of a newco out of the assets of a failing firm was not unusual, but the difference with the Rangers situation was a focus on preserving the club's history.

"In football normally, in every single case I know of, the administrators have gone for a CVA and it has either failed or it has been knocked back, and then they have gone for the newco," he said. "In all cases, the concept of history has never been important.

"What the Rangers fans don't really realise is that in this merger scenario Bill Miller is talking about, if the CVA is successful, the only likely way that is going to happen is if the new company buys the old company.

"In corporate finance, if you are bought over, your history is gone because you cease to exist. So in actual fact the whole thing about history is just semantics."