Administration discussed at Rangers before Craig Whyte deal, court told

The Rangers board discussed the possibility of the club going into administration several months before it was bought by Craig Whyte, a court has heard.

The club's former finance director told jurors it would have been "remiss" of them not to have talks on the issue when faced with a potential burden from a looming tax case.

The court has heard Rangers faced a possible bill from HMRC of more than £50 million in the so-called "big tax case" - a potential debt described by Whyte's advocate as a "nuclear missile" heading towards the club.

Donald Findlay QC also suggested the club was "already heading for a potential financial disaster" before Whyte appeared on the scene.

Former Rangers owner Whyte, 46, is on trial accused of acquiring the club fraudulently in May 2011.

He denies the two charges against him, one of fraud and another under the Companies Act.

Ex-financial director at Rangers, Donald McIntyre, 58, has been giving evidence for a second day at the High Court in Glasgow.

During questioning, Mr Findlay suggested the club was in a financial "predicament" around the start of 2011, before Whyte took over.

Mr McIntyre said the club had debt but it was getting to a more manageable level.

The court has heard the stadium needed about £1.7 million to be spent on it, that the club faced a £2.8 million bill from a "small tax case" and that its bank wanted out of football.

Mr Findlay also spoke of the upcoming "big tax case" in which no-one knew what the final bill could be.

"The figure that was being talked about as a potential liability was in excess of £50 million," said the QC.

The lawyer described it as "an unknown nuclear missile heading towards the club ... an exocet".

The witness replied: "Time will tell. Counsel told us that we had a very good chance of success in the case."

Jurors have heard the club went into administration "some time" after Whyte took over in May 2011.

Mr Findlay pressed Mr McIntyre on when he was first aware the Rangers board was discussing the possibility of administration for the club.

The witness said the subject "undoubtedly cropped up" as they moved towards the big tax case, also known as the EBT case. He put the date at about October 2010.

"I think it would have been remiss of us, given the potential tax burden of EBT, not to have discussions," Mr McIntyre told the court.

Mr Findlay put it to the witness "the possibility of administration for Rangers Football Club was recognised by the board several months before the Whyte deal was concluded, let alone that he took over".

"Yes," replied Mr McIntyre.

Mr Findlay later put it to him: "By the time Mr Whyte is coming to try to buy the club the club was already heading for a potential financial disaster - before Craig Whyte even appeared on the scene."

The witness said it all depended on the outcome of the EBT case but they were not contemplating the club being "brought to its knees" over it.

Mr McIntyre later told the court he would not have been in favour of a "pre-pack" administration for the club.

"I think it's an easy way out," he said. "I think debt is there to be honoured as best you can."

When the club did go into administration it was not to do with the EBT case, the court heard.

Mr Findlay earlier told the court former Rangers owner Sir David Murray had described Whyte's offer to buy the club as the "only show in town".

Prosecutors allege Whyte pretended to Sir David, and others, that funds were available to make all required payments to acquire a ''controlling and majority stake'' in the club - including clearing an £18 million bank debt, £2.8 million for the ''small tax case'' liability, a £1.7 million health-and-safety liability and £5 million for the playing squad.

The Crown alleges Mr Whyte had only £4 million available from two sources at the time but took out a £24 million loan from Ticketus against three years of future season ticket sales ''which was held subject to an agreement or agreements being entered into between the club and Ticketus after said acquisition''.

The second charge under the Companies Act centres on an £18 million payment between Mr Whyte's Wavetower company and Rangers to clear a Bank of Scotland debt.

The trial, before Judge Lady Stacey, continues on Wednesday.