Liquidators, administrators and solicitors scoop £20m in fees from Rangers case leaving creditors out of pocket

The professional services companies that have been wading through the debris of the former Rangers Football Club have come in for criticism after being accused of lining their pockets at the expense of creditors.

The accusations have been made after it emerged that liquidators, administrators and solicitors have charged nearly £20 million in fees, while creditors, among whom thousands are fans who bought £7.7m worth of debenture seats at Ibrox Stadium where the latest iteration of the club now play, have received just £1.4m.

In comparison, since the club fell into administration under former owner Craig Whyte in February 2012, legal firms acting for insolvency firm BDO have received nearly £10.4m, while the liquidators bill by April this year stood at £4.1m.

According to reports, there remains just £8.2m left to distribute to those who lost money when the club went under. So, barring any other outstanding legal claims, the maximum creditors could expect to get as it stands now would be around half that taken by the liquidators, administrators and solicitors.

The Herald newspaper reports that the legal bill includes the £353,757 cost of employing counsel in the failed fight to convince the Supreme Court that the club’s use of Employee Benefit Trusts to pay players and staff were loans that were not liable for tax.

And £8.2m of the legal fees have so far gone to London-based legal firm Stephenson Harwood, largely as a result of the settlement of a claim against Collyer Bristow, the solicitors involved in the controversial takeover of the club by Craig Whyte.

That claim brought in £24m for the liquidators.

BDO said £5.4m of the Collyer Bristow fees were the result of it being “necessary to instruct” the company on a ‘no win, no charge’ conditional fee arrangement basis. The arrangement resulted in Stephenson Harwood being entitled to their costs plus an extra 75 to 100 per cent to “compensate them for the risk that they would not get paid if the litigation failed”.