IT may yet be some way off, but Craig Whyte and those hoping to steer Rangers through choppy waters may look at the Leeds United blueprint and wonder if they can somehow pull off something similar.
It was 2007 and Leeds, just six years after appearing in a Champions League semi-final, were in administration with debts of £35m – including £7.7m owed to HMRC – and had been relegated to the third tier of English football for the first time in their history.
Just hours after administration was confirmed, however, chairman Ken Bates bought the club back from administrators KPMG using a newly-formed phoenix company, Leeds United Football Club Limited. Needless to say, the move proved to be neither straight-forward nor popular.
Other groups keen on taking the club out of administration, including one headed by Duncan Revie, son of Don, the former Leeds manager, were livid at the prospect of Bates benefiting. HMRC were not best pleased, either, after the club's creditors accepted an initial CVA (Company Voluntary Arrangement) offer of 1p in the pound, subsequently raised to 8p in the £1, and confirmed they would launch a legal challenge to prevent the takeover and recoup the money they were owed.
That prompted KPMG to put the club back up for sale, while Bates threatened a legal action of his own if his takeover was not allowed to go through. So far, so messy. Three days later, Bates gets his way when control of the club is returned into his hands but there's a hitch. The Football League refuse to hand over the "golden share" that would allow this new version of Leeds to play competitive football as a CVA was never finalised. By this point, it is mid-July and Leeds have a stadium, a manager, some players and thousands of frustrated fans but no league to play in.
A month later, however, the club were granted their golden share after the Football League accepted there were "exceptional circumstances" at play. The price of the transfer of membership from the old Leeds to the new Leeds was a 15-point handicap at the start of the League 1 season. By the end of August, HMRC gave up their legal challenge and the matter was put to rest. Leeds went on to make up the ground on their divisional rivals and qualified for the play-offs, narrowly missing out on promotion.
What chance a Rangers NewCo doing something similar? It is possible although the Scottish Premier League and the Scottish Football Association would need to sanction the move, while Rangers' administrator – if one is eventually appointed – would also have to agree to sell the club back to Whyte and his cohorts, and not to other interested parties. The SPL board would also have to sanction that transfer of the "golden ticket" and impose any sanctions they think appropriate as a result of the move. The new club, however, would not be immediately eligible to play in Europe, with UEFA regulations stating a club is only eligible for a license if it has been a member for three consecutive seasons.
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