Worcester Warriors are suspended from all competitions and face liquidation at the high court on Wednesday; Wasps are struggling financially and have raised notices of intention to appoint administrators, talks with potential investors are now said to be at a "relatively advanced stage"
Wednesday 5 October 2022 07:41, UK
Worcester Warriors face liquidation at the high court on Wednesday, while Wasps are aiming to avoid administration with investor discussions at a "relatively advanced stage".
HM Revenue and Customs is pursuing the Warriors for unpaid tax in the region of £6m and is to press ahead with the winding up petition knowing the club is in no position to clear the debt.
Meanwhile, Wasps are struggling to repay the £35m bond that was raised to help finance their relocation from High Wycombe to Coventry in 2014 that was due in May.
While Worcester are in administration, the company that holds player and some staff contracts - WRFC Players Ltd, a subsidiary of WRFC Trading Ltd - is still operational and is the subject of HMRC's action.
Unless the high court opts for an adjournment, WRFC Players Ltd will be wound up in a move that will see the contracts terminated.
Ted Hill, Ollie Lawrence, Fergus Lee-Warner and Valeriy Morozov have already joined Bath on loan and others will follow them out of the door having become unemployed, joined by members of staff.
Because they had not been paid for September, all players were able to leave on October 14 anyway, meaning that liquidation has simply brought their departure forward by nine days.
Administrators Begbies Traynor are seeking a buyer for WRFC Trading Ltd and are talking to two consortiums, but any successful takeover will bring with it the urgent task of rebuilding the squad.
Worcester's matches against Gloucester and Harlequins were cancelled on Monday and while they remain suspended from all competitions, they could be restored to the Gallagher Premiership if a buyer is found by the middle of this month.
No definite decision on relegation has been made by the Rugby Football Union and Premiership Rugby, although the chances of continuing in the top flight appear remote considering the lack of time to agree terms with new investors.
Worcester owners Colin Goldring and Jason Whittingham have become deeply unpopular figures among players, staff and fans for allowing the club to sink into such a precarious position.
The duo have also been mocked for appearing to blame the squad and supporters for the crisis that has engulfed Sixways in an extraordinary statement issued on Friday.
A statement issued by Wasps Holdings Limited revealed that talks are at "a relatively advanced stage" with possible investors in the face of a winding up order from HM Revenue and Customs for £2m in unpaid tax.
The Gallagher Premiership club is also struggling to repay the £35m bond that was raised to help finance their relocation from High Wycombe to Coventry in 2014 that was due in May.
"A second notice of intention to appoint administrators has been filed to allow negotiations on securing its long-term future to continue and to protect the interests of the group," a spokesperson for Wasps Holdings Limited said.
"Since filing the original notice of intention on September 21, a number of additional potential investors and funders have come forward.
"Discussions are now at a relatively advanced stage and we remain hopeful of securing a deal that will allow the group, and the entities that sit within it, to move forward.
"We would like to thank all stakeholders for their engagement during this process and in particular the constructive support and approach provided by the Rugby Football Union and Premiership Rugby.
"This will continue to be vitally important as negotiations with interested parties proceed and we remain in regular dialogue with both organisations.
"While the financial circumstances facing the group are extremely challenging, we remain optimistic about a positive outcome and will keep our players, staff, supporters, partners, bond holders and suppliers updated as this process moves forward."
Failure to secure the finance needed to prevent administration could result in automatic relegation from the Premiership.
However, the Rugby Football Union has the discretion to reduce or waive any sanction if the insolvency was deemed to be beyond the control of the club, including in the event of a pandemic.
