Going down! Hearts chairman Romanov's henchman says liquidation is inevitable



The former chairman of Vladimir Romanov’s failed Ukio Bankas last night warned Hearts fans to prepare for liquidation and life as a newco.



Liutauras Varanavicius served as a Tynecastle director for 17 months but quit after Romanov refused to stop throwing the bank’s cash at the club.



The result of that recklessness will be felt today with the arrival of administrators in Gorgie.

Teetering on the brink: Vladimir Romanov's side could go into liquidation

Five parties, including fans group Foundation of Hearts, are vying to buy the club’s assets through a CVA.



With debts now touching £25million, however, Varanavicius believes it may be impossible to deliver the club safely from administration.

‘Unfortunately, I could foresee this happening,’ he told Sportsmail.



Uncertain future: Hearts manager Gary Locke

‘I expected it for some time. I thought maybe the club would be sold before administration happened, but the market has been bad and it’s the wrong time to sell anything in football.



‘Scottish football is really in a bad way compared to how it was when Romanov came in. Now I think bankruptcy is the only procedure which can see Hearts go forward.



‘I think they must start up again as a newco. The Rangers example shows that may be the only way to do it — because the level of debt is now way too high for anyone to buy the club.



‘I don’t know the plan. They can try for a creditors’ agreement but, in my opinion, that won’t happen.



‘Bankruptcy and liquidation is the only way out for Hearts now. You can always believe and pray for something which is not achievable — but it’s better to believe in something realistic from the start.’



Hearts directors want to appoint KPMG as the administrators with immediate effect.



Last night, however, Gintaras Adomonis of Lithuanian administrators UAB Valnetas launched a legal fight to appoint insolvency experts BDO to protect the interests of Ukio Bankas.



A petition will go before the Court of Session today and looks likely to succeed.



This has raised fears there will be a quick sale of assets — including Tynecastle.



Meanwhile, Foundation of Hearts have attracted 5,000 pledges of financial support from fans, while Sportsmail understands former Livingston owner Angelo Massone will also approach the administrators with a renewed bid of £4.5m.



Game over? Hearts have been warned to prepare for liquidation and life as a newco

Another party in the US is exploring scenarios for Hearts with a group of individuals in North America and Scotland, while a separate mystery potential bidder has appointed Edinburgh accountants Haines Watts to perform due diligence.



Whether anyone can satisfy the demands of Ukio Bankas or HMRC is the major question.



Worried that Hearts may have little option but to start again as a newco in the Third Division, Varanavicius accused Romanov of playing Russian roulette.



‘He invested way too much in Hearts,’ he said. ‘And it wasn’t his money. He is paying for his mistakes now.



‘I told him that at the time — that’s why I left. I only understand one way of doing football business. The first part is to break even; the second is to make decisions about investment.



‘The problem was Romanov was spending money which belonged to the institutions. The management should have said something. They should have stopped it.’

HEARTS TIMELINE

2005 - January 29: Hearts' board approves Vladimir Romanov's investment, allowing him to eventually secure 80 per cent of club shares and control of the Jambos.

2006: A series of managers are hired and fired by Romanov as Hearts qualify for the Champions League.

2010 - May 3: Hearts reveal club debt has risen to just under £35million - an increase of £5million in the space of a year.

2012 - April 16: Hearts admit players will not be paid on time just four months after December wages appear late.

May 19: City rivals Hibernian are humiliated with a 5-1 defeat in the final of the William Hill Scottish Cup as Hearts clinch the trophy for second time in six years after 2006 final's triumph over Gretna.

Hearts owner: Vladimir Romanov October 22: The Jambos are hit with a transfer embargo by the SPL after six players and manager John McGlynn receive their October wages six days late.

November 7: Hearts confirm they have been served with a winding-up order over a tax bill of almost £450,000.

December 3: The tax bill is settled after the Hearts support raise more than £1million through a share issue, staving off the winding-up order. Repayment plan for a second tax bill worth £1.5million is also agreed with HMRC.

December 20: The SPL place the Tynecastle outfit under an 'indefinite transfer embargo' over the failure to make bonus payments to their players following their Scottish Cup win in May.

2013 - January 17: The SPL lifts the transfer embargo placed on Hearts after they pay January wages on time - but rules they will only be able to sign under-21 players on a one in, one out basis.

March 5: Romanov's decision to resign from the board of UBIG, the company which holds a majority stake in Hearts, following the collapse of Ukio Bankas sparks speculation that Russian may also surrender control of Hearts.

May 18: Hearts are spared immediate relegation from the top flight after the SPL announces Hearts will not be subjected to an immediate points deduction after concluding an insolvency event had not occurred at the club's majority shareholder UBIG.

June 4: The club is again forced to downplay administration fears after reports of another £100,000 tax dispute with HMRC.

June 12: The administrator of Ukio Bankas says he has 'no reason or desire to harm Hearts' after a court in Lithuania upholds a decision to liquidate the bank.

June 13: Club announces that all their players are up for sale as fears for their future enters a 'critical' period.

June 14: SPL confirms Jambos fail to pay 'a number' of their players their July wages and hit them with an immediate transfer embargo.

June 17: Hearts confirm they have served Court of Session with intention to appoint administrators.



