A new term has entered the lexicon of Planet Fitba.
Suddenly everyone knows about the “CVA” (Company Voluntary Arrangement) and it is being discussed in pubs where the finer points of insolvency law are not usually a topic of argument.
In hostelries where liquid lunches are better appreciated that liquidation the reality is slowly sinking in that Rangers (1873) could die.
The CVA is Rangers’ only escape route from the current state they are in.
If the creditors who are owed at least 75% of the monies can agree with the debtor (in this case Rangers) for some kind of write down, then the CVA will go through.
This would take Rangers out of Administration and prevent the liquidation of the club.
This comes down to a decision of the senior people at HMRC.
If they agree to a CVA, then it will happen.
If the FTT finds against Rangers, then the club probably owes Hector somewhere between £65-£70 million and change.
In a CVA, the club might be able to offer £2million.
The message this would send to businesses in Scotland would be clear and would be that “taxes are optional!”
Indeed only the stupid would pay tax after the Rangers CVA.
The political damage to HMRC’s reputation would massively outweigh the relatively meagre amount that would be paid back into the public coffers.
The recent public reversals of HMRC would be nothing compared to the loss of credibility of they were to let Rangers live.
Instead of a CVA (Cosy Venal Appeasement) HMRC needs this club to be liquidated.
Hector may get his wish sooner than you may think dear reader.
Unlike in the USA an Administrator in the UK cannot borrow money to keep the company going.
There is no British equivalent of “debtor in possession financing” under Chapter 11 Bankruptcy.
If the Administrator currently in charge of Rangers simply runs out of cash, then the company will be liquidated.
Hector can legally block a CVA in court until the cash runs out, or the First Tier tax Tribunal delivers the big tax bill.
Even if the FTT was to find in Rangers’ favour, HMRC would appeal and knock it to the Upper Tribunal.
I am informed that there is now very little cash left in Rangers, and that time is not on their side.
HMRC realise that there will be no money to be had out of Rangers.
Why then go to all of this trouble?
What is of value at Ibrox and worth far more that the monies owed is the public spectacle of the awful consequences of non-payment to HMRC.
When Rangers were formed in the 19th century the first crowds flocking to see this new form of entertainment had almost certainly watched public executions.
Some social historians think that the decision to ban public executions in Britain created a vacuum for public spectacle in the rapidly expanding industrial cities like Glasgow.
Dr Edward Pritchard, a Glasgow medical practitioner, was the last person to be executed in public in Glasgow. In a famous trial of the time, he was condemned to death for murdering his wife and his mother-in-law, and he was hanged on Glasgow Green in 1865 only seven years before Rangers first took to the field of play.
The rotting corpse of Rangers 1873 dangling from a fiscal gibbet in 2012 will assist in the good governance of the realm.
It would be appropriate in this instance to build their gallows high.
