The former administrators of Glasgow Rangers have been ordered to pay £3.4 million for breaching their duties while acting as administrators for the club after their actions fell below an ‘ordinarily competent’ standard.
Paul Clark and David Whitehouse, formerly employed by Duff & Phelps, were appointed as administrators in February 2012 by the Court of Session after HMRC took Rangers to court for £18 million worth of tax liabilities.
Judge Lord Tyre ordered the pair to pay over £3,404,500 to the liquidators BDO, after BDO’s legal team claimed that Whitehouse and Clark failed to reduce costs to save the business. BDO claimed that they could have made more staff redundant, stopped the company from being liquidated and made the club a more attractive investment for potential purchasers.
They also criticised their failures in realising assets like the clubs Murray Park Training ground, selling the Ibrox Stadium with a view to leasing it back to the club and most importantly, their failure to sell players like Steven Naismith, Steven Whittaker and Maurice Edu.
The administrators sold the business and assets for £5.5 million to Charles Green’s consortium.
Lord Tyre was satisfied that the pair acted without seeking independent advice on certain critical matters about which they required to be informed and relied too much on a report by Ally McCoist, Manager.
This is a salutary reminder to administrators who need to ensure that they act in the best interests of the general body of creditors.
For more information on bankruptcy, liquidation, administration and all the other insolvency procedures, or should you or your company be facing financial difficulties and you need to chat, please telephone Charlotte Hutchinson on 01377 257788 and she will make you an appointment with one of our insolvency professionals at our Driffield, Hull, Grimsby, Scunthorpe or York offices. Our initial meetings are free and without obligation. Meetings can be held virtually or in any of our offices whilst observing the socially distancing guidelines.
Because we are an independent insolvency practice, we keep our overheads low and have put systems in place to deal with simple liquidations at an affordable price of from £1,995 + VAT + Disbursements. Our MVLs are from £995 + VAT + Disbursements.