Is this the end of the Liberal Democrats?

Thanks to Ridiculous Politics for highlighting this story.

The Lib Dems could now be facing bankruptcy. A former key donor has been arrested on charges including fraud and it's possible that his past donations may be ruled in breach of current party funding law.

Currently no-one can make an individual donation to a political party if they are not on the electoral roll. Despite this Michael Brown made donations of £2.4 million to the Liberal Democrats through an entity called 5th Avenue Partners. If the Electoral Commission rules that this entity was not "carrying on business" in the United Kingdom then the Lib Dems will have to repay all the money. This could send them into financial bankruptcy.

Before the current arrest, but when his donation was still under investigation, Menzies Campbell defended taking money from the controversial ex-pat businessman. Asked if he would take the money knowing when had been thrown up about his business dealings in October 2005, Sir Ming said on Channel 4: 'Well, now everything is out in the open, then the answer is probably yes. Why not? As far as I know, there is no intention to give the money back.'

How the Lib Dems can afford to repay all the money is unclear. And it's doubtful that Michael Brown will be willing to register to vote in the UK and donate them more money. His support for the party was based on his regard for Charles Kennedy but not for "the muppets who purport to serve him" and he was not happy when Kennedy was stabbed in the chest by them. So they may have to look elsewhere.

Could this be the straw that breaks the camel's back and brings the Liberal Democrats to extinction? Now that Kennedy's leadership is no more, what will "the muppets" do?