Their decision will bring some clarity to the process that follows, as the Ibrox side attempt to find a way out of their financial predicament, but it is only a small step on the way to a conclusion. There are still several key issues to be resolved, which the following questions address.
Is the preferred bidder guaranteed to become the new owner of Rangers?
Not necessarily. If they pay for a period of exclusivity then Duff & Phelps, the administrators, cannot negotiate with any other interested parties. A new offer could still arrive at the end of that time, though, and if it represents a better deal for the creditors then Duff & Phelps are obliged to at least consider it. No deal will be binding until sale documents are signed.
So what is the purpose of naming a preferred bidder?
Duff & Phelps need to know how much money will be in the creditors' pot before they can begin negotiations for a Company Voluntary Arrangement (CVA). They will be involved in discussions with the creditor committee – set up to represent all the club's creditors, and probably led by Her Majesty's Revenue and Customs and, depending on who is named the preferred bidder, Ticketus – and negotiations are easier when there is only one potential buyer involved.
Will Duff & Phelps take into account which bid represents the best deal for Rangers' long-term health?
Their first obligation is to creditors, so they need to assess how much money each bid is worth. The Blue Knights have struck a deal with Ticketus that removes their £27m debt from the creditors' pot, but if Bill Ng's Singapore consortium or Bill Miller, the US tycoon, is named preferred creditor there is nothing to stop Ticketus offering them the same deal. The administrators will judge the value of the bids, how they are funded and only then what they mean to the business when it emerges from administration.
If Ticketus are not in the creditors' pot, what is the likelihood of HMRC agreeing to a CVA?
This is one of the two critical issues still to be resolved (the other is Craig Whyte). Nobody outwith HMRC can know what decision they will make once presented with the offer of a CVA. There is an obligation to recapture as much money as possible on behalf of tax- payers, but their stance will be complicated by the outcome of the big tax case into the use of Employee Benefit Trusts (EBTs).
In what way?
If the first tier tax tribunal finds in HMRC's favour, then Rangers will have been guilty of tax evasion, and HMRC do not tend to agree to CVAs in those circumstances. HMRC are also thought to be preparing or pursuing cases against a number of English clubs for their use of EBTs, and might consider that refusing to vote in favour of a CVA – which sends Rangers into liquidation – would send out a strong signal to these clubs to not try to avoid any liabilities from their use of EBTs. Dealing so firmly with a club of Rangers' stature and high profile would also dissuade other football teams from attempting to evade their tax responsibilities.
So a CVA is unlikely?
There are counter arguments, particularly if a CVA offers a significantly better return to HMRC than the club's assets being sold in a liquidation, when the proceeds are shared among the secured creditors before the unsecured creditors, which include HMRC. It is also clear that Rangers are integral to the financial health of many Clydesdale Bank Premier League clubs, although in the event of liquidation Rangers are expected to continue as a newco.
Is it a simple case of CVA or liquidation?
Essentially, yes, although there is room for manoeuvre. The administrators could, for example, move Rangers' assets – Ibrox, Murray Park, the Albion Car Park – to a subsidiary company and sell that to a new owner. The original Rangers FC would still exist and hold the share in the SPL, but this could conceivably be transferred to the subsidiary, as long as the league agrees. This is what happened to Leeds United in 2007 when their CVA was blocked at the last moment by HMRC.
What role does Whyte have to play in all of this?
First, he remains the club's majority shareholder, so must agree to sell or pass on his shares to the new owner. There has been mixed messages throughout the administration process regarding Whyte. Duff & Phelps at one stage described him as an "irrelevance", which he is not, although Whyte has insisted he will not stand in the way of a new owner. But what does he want in return? Whyte claims to have spoken to two of the three bidders, but has not yet received an offer for his shares, which he bought from Sir David Murray for £1. As one of the secured creditors, Whyte must also sign off any CVA offer to the unsecured creditors. He also disputes Andrew Ellis' claim to be owed part of the shareholding, but Ellis, too, has pledged not to prevent any sale taking place.
What about the players? Who makes a decision if West Bromwich Albion make an improved offer for Steven Naismith?
Until the club is sold, or liquidated, only the administrators have the authority to accept or reject bids. If a £2.5m offer meets any clauses in Naismith's contract – negotiated after the players agreed to wage cuts – Duff & Phelps would have to accept it, although Naismith could still decline to move. The deal could be agreed, and money even change hands, outwith the transfer window, although Naismith's registration would remain with the Ibrox side until June 1.
