Rangers administrators ordered to pay £3.4m for breaching duties in 2012 rescue

David Whitehouse and Paul Clark, partners at Duff & Phelps, were appointed by the Court of Session as Rangers' administrators in February 2012 after HMRC took the club to court over £18m of unpaid tax. They ran the club for months, then sold the business and assets of the old company to Charles Green's consortium for £5.5m. Liquidators at BDO later argued the pair's conduct during that rescue fell below professional standards, and Lord Tyre agreed in a 125-page judgement at the Court of Session in Edinburgh issued on October 6, 2021.

The judge found the two breached their duties by failing to cut costs and failing to sell assets and players. They relied on a report from manager Ally McCoist for redundancy and player-sale decisions instead of independent advice — below the standard of an 'ordinarily competent administrator', Lord Tyre found. They refused West Bromwich Albion's £1.7m April 2012 bid for Steven Naismith as too low to trigger his £2m buy-out clause — a decision the judge held incorrect. They also never seriously pursued selling Murray Park or an Ibrox sale-and-leaseback.

The defence was that mass redundancies and player sales would have scared off potential buyers, but Lord Tyre rejected that reasoning. He ordered the pair to contribute £3,404,500 to the company's property: £850,000 for the lost chance of selling Murray Park, £750,000 for failing to consider leasing and selling Ibrox, £827,000 for Naismith, and £977,500 for other 'marketable' players they declined to move on.

£3,404,500 compensation to liquidators BDO, itemised across Murray Park, an Ibrox lease-back and players never sold.

They relied on the manager's own report for the most consequential calls on redundancies and player sales, without independent advice on critical matters.

A £1.7m cash offer for a player was declined over a £2m contract clause while the club had no means to enforce it profitably.

Revenue-generating assets — Murray Park and a potential Ibrox lease-back — were left unexplored to keep the club intact for a buyer.

The fear of deterring buyers was treated as licence to do nothing, which the court held was itself a breach of duty.

An administrator's job is to maximise value for creditors, not to keep the football product comfortable — deferring painful sales on a buyer's behalf puts the adviser's own money at risk.

BDO won the sum in proceedings concluded earlier in 2021, with Lord Tyre ordering Whitehouse and Clark to hand over £3,404,500. Both had been indicted among seven people over fraud allegations relating to Rangers; the case was dropped in June 2016, and prosecutors later admitted their prosecution was malicious and conducted without probable cause, paying them multi-million-pound settlements. Charles Green, also arrested in the probe and eventually acquitted, was found to have been wrongfully taken to court.