Glasgow Rangers enter bankruptcy
Glasgow Rangers were forced to seek bankruptcy protection on Tuesday, triggering a 10-point deduction for the 140-year-old club and effectively handing the Scottish Premier League title to crosstown rival Celtic.
Rangers are now 14 points out of the lead as a battle with tax authorities over an estimated bill of up to $117 million led to it becoming the most prominent European club so far to seek bankruptcy protection.
Rangers, the defending league champions, are the most successful club in Scottish soccer. Their 54 domestic league titles are a world record.
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The Union of European Football Associations has been warning about the perils of rampant overspending in soccer, revealing last month that the combined debt of leading European clubs exceeded $10.5 billion.
Rangers were forced into administration over tax debts of $14 million accrued in the nine months of Craig Whyte's ownership. They also are awaiting the verdict of a tax tribunal over long-standing contested liabilities of up to $117 million.
"I would like to express my deep regret that a Scottish institution should find themselves in the kind of parlous state that has necessitated today's course of action," Scottish Football Association chief executive Stewart Regan said. "This is a profoundly sad chapter in the history of Scottish football and we should not underestimate the potential ramifications for the image of the game as a whole."
Entering administration -- the British term for bankruptcy -- is the last attempt to save the club from liquidation.
Rangers, a team that includes American players Carlos Bocanegra, Maurice Edu and Alejando Bedoya, are now being run by financial advisers Duff and Phelps, who are tasked with saving the club from liquidation.
"We fully recognize the great history of this club and what it means to people throughout the world," administrator Paul Clark said. "Whilst today is a sad day for Rangers, it also addresses the terrible uncertainty that has been hanging over the club. The administration period, while difficult for all involved, will give stability to the club in order to move forward."
He added that "we are working ... to ensure the ongoing survival of the business, which is of paramount importance to all concerned."
The takeover by Whyte last May appeared to be Rangers' first step toward financial recovery. He pledged to pay off debts of $28.4 million left over from the tenure of former majority shareholder David Murray.
However, Whyte has been unable to solve the club's financial problems and tax authorities are demanding the settling of unpaid taxes "over a period of several years dating back to 2001."
"Due to its cost structure, the club has been loss-making for many months," Whyte said. "This situation has resulted in increasing liabilities and the club has been in discussion with (British tax officials) regarding these liabilities.
"These liabilities combined with the threat of the outcome of the first tier tax tribunal left the club no option but to formally restructure its financial affairs ... it remains our firm belief that the club's future can be secured and we hope this period of administration will be as short as possible."
Rangers, formed in 1873, won the now-defunct European Cup Winners' Cup in 1972 and lost to Zenit St. Petersburg in the final of the UEFA Cup -- the forerunner to the Europa League -- in 2008. The team has also won 33 Scottish Cups and 27 Scottish League Cups.
The team's upcoming games seemed unlikely to be affected, however, after the administrators pledged to continue paying salaries and security costs.
"I can assure all Rangers supporters that all aspects of the administration will be carried out with the interests of the club firmly in mind," Clark said. "As a first step, the administration team will ensure that Saturday's match at Ibrox will proceed as planned and all other routine club business will continue."
Rangers had been four points behind in the Scottish Premier League standings. The 10-point penalty will leave the club in second place with 51 points -- still nine ahead of third-place Motherwell, but 14 points behind Celtic, their Glasgow "Old Firm" archrivals.
"I'm not too surprised but still shocked," former Rangers chairman Alastair Johnston said. "This was something that we knew was inevitable but the expediency of the situation is still shocking to everyone else involved."
Copyright 2012 by The Associated Press