Worcester Warriors: Relegated Premiership club's debts amount to more than £30m
- Published
Worcester Warriors are currently suspended and have been relegated to the Championship for next season
The full extent of Worcester Warriors' debts has finally been revealed as totalling more than £30m, in a report sent to the club's creditors by their administrators, Begbies Traynor.
The report also discloses that former owners Jason Whittingham and Colin Goldring claim they are still owed more than £2m by the club's companies.
Begbies Traynor is still negotiating the sale of Warriors to a consortium.
The chief contenders to take over are fronted by ex-Warriors CEO Jim O'Toole.
After submitting a "significantly higher" bid than rivals, the report shows O'Toole and James Sandford's consortium paid a deposit of £500,000 to be able to negotiate exclusively.
That exclusivity period lasts until the end of November.
In a further demonstration of the O'Toole and Sandford consortium's long-term intent and commitment, the report also shows they have already invested more than £1m, having also paid off a £634,000 loan taken out by the club's former owners on land at Sixways.
WRFC Trading Ltd, the part of Whittingham and Goldring's operation which owned the ground at Sixways, went into administration on 26 September.
WRFC Players Ltd, through which the Warriors players and staff were paid, was then wound up in the High Court in London on 5 October, causing the cancellation of contracts and triggering the loss of 21 players so far to other clubs.
Warriors were suspended by the Rugby Football Union and relegated - both sanctions are still under appeal on a "no fault insolvency" basis by the administrators, led by Julie Palmer.
Whittingham and Goldring, who are still listed as being part of the Warriors board during the current period of administration, were told they had been disqualified as company directors for 12 months.
That came following a court hearing in Cardiff in October when they were found guilty in their absence of failing to file accounts for two of their companies, Worcester Sport Ltd and MQ Property Ltd, for the financial year to 28 February 2021.
However, their disqualifications were removed following two hearings held at Cardiff Magistrates' Court on 10 November when the two cases were reconsidered, and the punishments and fines reduced after they pleaded guilty to failing to file the accounts in time.
Golding told BBC Sport that the pair's disqualifications were lifted and the cases re-listed as they had "not been served notice" of the original hearing.
What are the report's findings?
Since being made Warriors' administrators in late September, Begbies Traynor has carried out detailed investigations into the club's financial collapse, including into transfers of land entered into by the club prior to administration - and the possibility of wrongful trading by Warriors' directors.
The report lists two of Goldring and Whittingham's other companies as being owed £2.085m by the club's trading arm, WRFC Trading Ltd.
The administrators say this figure could yet be disputed - but that it is a fraction of the club's debts, set out in full for the first time, having previously only been speculated at verbally by Begbies Traynor in various interviews over the past two months.
As well as owing the government £16.1m from their Covid Sports Survival loan, Begbies Traynor says the club owe £2.1m in unpaid taxes to HM Revenue and Customs.
Jason Whittingham and Colin Goldring (right) first became Worcester Warriors directors in December 2018
Hundreds of suppliers, businesses, banks and ticket holders are also together owed more than £5.8m.
The club's payroll arm, WRFC Players Ltd, also owed £6.8m at the time of being wound up.
Joint administrator Palmer has now concluded that, even if Warriors' entire assets were sold off, the funds raised would be unable to pay off the club's debts.
The club's assets were diminished greatly in 2018, prior to Goldring and Whittingham becoming directors, when the freehold of both the stadium at Sixways and a large portion of the surrounding land was sold by WRFC Trading Ltd to another of the Warriors owners' companies before being leased back to the club.
The club were last sold to a four-man consortium fronted by Jed McCrory in October 2018.
Whittingham and Goldring, who also jointly owned Morecambe Football Club, joined the Warriors board in December 2018.
McCrory then left in June 2019, leaving Whittingham and Goldring at the helm.
As things stand, hundreds of suppliers, fans and firms are set to lose all money owed to them, unless the new club buyers were to pay them back.
In her report, Palmer says it is "highly likely" money owed to HMRC will be paid back, while the Covid Sports Survival loan looks set to be taken on by a future buyer.
How can a manager control his emotions? Sacked in the Morning discusses anger on the sidelines
Which portable heater is best? Sliced Bread turns up the dial to find out which gives the most heat for the lowest energy used
