For Paul Murray and any other potential buyers interested in Rangers, there are two significant considerations: what is the status of Craig Whyte, and what will Her Majesty's Revenue and Customs do?
The club's administrators believe that Whyte is not a secured creditor, and that they can use a legal mechanism to take control of his shareholding. The role of HMRC cannot be marginalised.
There are two routes out of administration, and it is the tax man who will be critical in determining which is taken. Whyte may disagree with the administrator's bullish statement that he is effectively an "irrelevance", and Paul Clark of Duff & Phelps was even more certain last weekend that Whyte could not claim the secured creditor status which, in the event of a liquidation would put him first in line to receive proceeds from the sale of the club. In that case, HMRC are the dominant creditors.
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To achieve a company voluntary arrangement (CVA), Rangers must offer a dividend that creditors holding 75% of the total debt agree to. HMRC are already owed £15m, which means that they in effect control the decision to grant or deny a CVA. It is this position that prompted Paul Murray to meet with HMRC officials in London last week.
Murray may now have an understanding of the Revenue's position but, as one financial source says, "there is so much noise, it's very difficult to predict what HMRC will do". In England, the Revenue vote against CVAs for football clubs as a matter of policy, since they challenge the presence of the football creditor rule, established by the game's authorities to ensure that all football debts are paid first. No such rule applies in Scotland, however.
HMRC will also have concerns about the way the club was controlled under Whyte, who failed to pay PAYE or VAT for nine months. If the administrators are right about their strategy for taking control of Whyte's shareholding, or he agrees to pass it on for a small fee, then the buyer will effectively be funding the CVA, and Whyte will no longer be a consideration. The new owners would need to provide a credible business plan and robust corporate structure if HMRC are to believe that the business will grow and provide steady tax income in the years ahead.
The administrators also insist that the outcome of the first-tier tax tribunal into Rangers' use of Employee Benefit Trusts between 2000 and 2010 will be factored into the CVA offer made to creditors. This essentially means that, rather than being a percentage of the £15m currently owed, HMRC will need to consider the CVA as a percentage of a bill that could include up to an additional £50m in taxes and penalties. Rejecting the CVA would lead to Rangers' assets – Ibrox, Murray Park, the Albion car park and the staff – sold, to a newco club, and the proceeds used to pay as much debt as possible.
"The prime, probably only, objective of HMRC will be to recover the tax owed, whether that is via a CVA or by winding the club up," says Andrew Trollope QC, who successfully defended Peter Storrie, the former Portsmouth chief executive, against charges of tax evasion. "Based on the Portsmouth case, HMRC seem to care little for history and tradition, rather their avowed policy appears to be that top clubs must pay their dues. Of course, HMRC won't be the only creditor, although, as the largest, they will be calling the shots. But, it is very difficult for HMRC to justify any action which does not recoup the tax owing, particularly if it looks like deliberate non-payment as opposed to the inevitable result of incompetence/poor management."
If HMRC are to pursue the outcome that generates the most money on taxpayers' behalf, which is their purpose, then a CVA might be possible, if it's pitched at a high enough level. The sale of assets in a liquidation typically has them sold at less than their normal value – it is a fire sale, in effect – but football stadiums, training grounds and football staff hold their value better than other conventional business assets because they are unique and, as would be likely in this case, will be bought by a newco version of the former club.
As well as the high-profile nature of Rangers' administration, there have been attempts to make political influence count. Alex Salmond, Scotland's First Minister, has spoken to HMRC, but the Revenue considers itself a strong, independent Government department that makes its own decisions. Such interventions may not be considered welcome. "HMRC can choose to make a point ahead of commercial interests," says the financial source.
If Rangers lose the big tax case, HMRC will also have to weigh up accepting a dividend on that debt, or being seen to further punish the organisation for what would amount to tax evasion.
Trollope adds: "HMRC will go for maximum recovery but, if the offer from the company is better than the likely proceeds of a sale of the assets in a liquidation, then it would be perverse not to accept it."