Administrators face battle over Rangers

Sat, 26 May 07:41:24 2012

Rangers' administrators Duff and Phelps face a battle on several fronts next week after helping launch a legal battle against the Scottish Football Association just as their own role in the club's financial crisis came under official examination.

Rangers began proceedings in the Court of Session in Edinburgh in a bid to overturn their 12-month transfer ban, which was imposed for a failure to pay £13million in tax last season.

While the outcome will have a huge bearing on the club, or its successor, next season, Duff and Phelps themselves face an investigation over allegations of a conflict of interest. Their regulatory body, the Insolvency Practitioners Association, began an investigation over claims made in a BBC Scotland documentary on Wednesday.

Rangers' court move is in direct contravention of FIFA regulations that forbid clubs from taking action in law courts but the case will continue on Tuesday.

The administrators have still not issued a Company Voluntary Arrangement proposal to creditors. The offer had been due to go out at the start of this week but administrators now say it should go out on Monday. Rangers cannot come out of administration for at least six weeks after the letter is sent - if creditors accept the reduced payments.

With plans also in the pipeline for the formation of a new company, Charles Green, the frontman of a prospective ownership consortium, will arguably be more concerned with the success of a legal challenge against the ban on registering players aged 18 and over.

Rangers last week lost an appeal against their punishment, meaning two independent panels convened by the SFA found a transfer ban was competent and justified, and the next traditional step in football disputes was to take the case to the Court of Arbitration for Sport in Switzerland.

The club's argument, funded by supporters, centres on the fact that the punishment is not explicitly laid out in the SFA rules and so they claim it was not available to the panel. However, the SFA articles of association include a clause that a judicial panel can implement any sanctions they deem appropriate.

Meanwhile, Duff and Phelps partner David Grier was the subject of claims of a conflict of interest aired in the BBC Scotland programme. It emerged that Grier, who advised Craig Whyte on his takeover, knew of a potential deal between the businessman and Ticketus.

However, Grier stressed he did not know the details and extent of the agreement and that the initial funding, which totalled £24.4million, financed on the back of future season ticket sales, was earmarked for paying off the club's bank debt, a key pledge of Whyte's takeover deal.


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