HEARTS could face losing out on a substantial chunk of the £800,000 due for last summer’s transfer of Lee Wallace to Rangers if the Glasgow club goes into administration.
Rangers, who yesterday began the process of entering administration by lodging papers signalling their intention to do so at the Court of Session in Edinburgh, bought the Hearts full-back in July of last year for a fee of £1.5 million. It is understood the deal was split into three different instalments, the first, a fee of £700,000, was paid when Wallace made the move to Ibrox.
Hearts, however, are still due £500,000 this July, and a subsequent £300,000 next July. Those payments are now in serious jeopardy as Rangers’ financial affairs take a turn for the worse. If the Glasgow club were to enter administration, Hearts would almost certainly face a delay in receiving their money, as administrators would take time to analyse the amounts owed to Rangers’ creditors.
If Rangers agree a company voluntary arrangement (CVA) with their creditors, there would be a risk for Hearts that they would only receive a fraction of the funds owed to them. Should the Ibrox club go into liquidation, Hearts may not receive any outstanding funds.
Last month, Hearts made a proposal to Rangers, in which the Tynecastle club were willing to shave off up to £100,000 from monies due in order to receive £700,000 from the current SPL champions immediately. This arrangement was proposed for the benefit of both parties. However, the Evening News understands that the offer was met with little enthusiasm by officials at Ibrox.
Hearts have also been afflicted by cash flow issues, culminating in three consecutive months of failing to pay wages on time. The club also faces an £150,000 tax bill that must be paid by Thursday to escape a winding-up order, although the club are confident this will be settled.
Directors are expected to meet and discuss the Wallace transfer money once the dust has settled at Ibrox although, with the club not due the first instalment until July, Hearts have not banked on the funds arriving any sooner.