FIRMS handling the financial collapse of Rangers who have pocketed £20 million in fees have come under fire as it emerged thousands of out-of-pocket fans who put money into the club are due to lose millions through a legal loophole.

Liquidators BDO have confirmed that the fans, who bought bonds to help support and fund the upgrading of Ibrox, are set to lose out because their claims will be legally time-barred.

Details of the payouts over seven years – described as "staggering" by one costs expert – come as it emerged that so far only £1.4m has still been received by those owed money.

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But there are plans for further payouts by BDO of £3.242m, out of a pot that stands at just £7.4m.

It still means that, barring any success in outstanding legal claims, the maximum creditors would get right now would be less than half that taken by those responsible for handling the fallout of the Rangers meltdown.

Since the oldco fell into administration under former owner Craig Whyte in February 2012, legal firms acting for BDO, the liquidators of RFC 2012 plc, have received around £11m, while the liquidator's bill stood at around £5.3m at October, 2019.

Among those who lost out from the financial collapse were 6,050 fans and holders of bonds who were owed over £7.7m by the club.

But BDO say claims totalling just £1.571m have been received to date – just 20% of what was expected.

Now BDO say that bondholders have no right to make a claim because they are out of time.

In a circular to creditors on the liquidation, the firm says: "Following discussions with our legal advisors, the joint liquidators now consider that they have made every effort to seek out and admit these claims, and any future claims will now be legally time-barred under Scots Law. No further claims will therefore be admitted from bondholders or any other creditor who has not previously intimated their claim."

BDO have been planning a £240,000 payout, having already distributed just £301,127 to those bondholders who were out of pocket.

One creditor said: "I feel sorry for those debenture holders who are losing out. I honestly do not think they all realise that they are owed money. Or maybe they have been put off by the fact unsecured creditors like me are only likely to get a few pence back for every pound owed. But that's still a lot of money."

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When Rangers went into administration some fans urged bondholders to waive the sum due to them because it might help with the club's survival – but that was before it was plunged into liquidation.

It was in 1990 that Rangers turned to fans to help finance a multi-million-pound reconstruction and refurbishment of the main stand at Ibrox.

The then Premier League champions offered 6,807 bonds, costing between £1000 and £1650, to their supporters and the business community to raise more than £8.5m towards the £12.5m cost of the new three-tier stand development.

The changes were aimed at making Ibrox all-seated, to comply with new legislation coming from Lord Justice Taylor's report into the Hillsborough disaster.

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.

Before BDO took on the liquidation in October, 2012, Duff and Phelps amassed £3.484m in fees plus £1.326m in legal fees over the eight months they acted as joint administrators.

Leading legal costs expert Jim Diamond said: "After 40 years in the legal profession, this situation still staggers me in regard to how professional service providers can make hundreds of thousands of pounds or in this case millions of pounds in fees while the creditors can end up with little or nothing. A 'Bleak House' situation in many ways.

"I strongly recommend the Scottish Government look into the whole structure on how professional fees are constructed with the absolute priority being the protection of the creditors and/or buyers of professional services."

More than £47m was paid to Rangers players, managers and directors in the EBT scheme administered by the Murray Group, then majority shareholder of the Ibrox club, between 2001 and 2010 by way of tax-free loans.

Leading legal costs expert Jim Diamond said: "It's an absolute disgrace and an indication in my view and experience of the Scottish legal marketplace which is totally geared up for the professional people without the necessary controls and not to the benefit of the general public and in this case the creditors.

"How can you look at this and have nobody complaining?

"Scotland needs to have the politicians have a look at what is going on."

Papers reveal that £8.224m of the legal fees including "outlays" which are solicitors' expenses have so far gone to London-based legal firm Stephenson Harwood and were mostly over the settlement of a claim against London-based Collyer Bristow the solicitors involved in the controversial takeover of the club by Craig Whyte. The liquidators banked £24m from that claim.

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.

That deal meant that Stephenson Harwood were 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".