Worcester Warriors: 'Owners' Atlas still owe administrators £1.2m
- Published
Sixways has been home to Worcester Warriors since 1998
Worcester Warriors' administrators Begbies Traynor say they are still owed £1.2m if prospective new owners Atlas are to finalise their purchase.
The latest interim 'progress report' issued by Begbies Traynor shows that Atlas missed a self-imposed deadline to complete the deal earlier this month.
Atlas were last month given more time to finalise the buying of the troubled ex-Premiership club.
They are now under the control of Chris Holland, who also owns Wasps.
Holland, who this week announced a plan to move Wasps to Kent, took over last month as Atlas majority shareholder.
When Atlas were announced as new Warriors owners in May, having paid £2m to complete the purchase of WRFC Trading Limited, they were required to pay another £1m by 9 October.
But they did not meet that deadline and one of Holland's companies, Loxwood Holdings, now own the 97% holding of WRFC Trading by default as original Atlas owners Jim O'Toole and James Sandford had failed to repay a loan by the due date of 28 May.
The latest Begbies Traynor report also confirms that the administrators fee is currently estimated at £1.8m for all the work done in the 13 months since being appointed to run affairs from Sixways in September 2022 following the collapse of the previous ownership.
"Our fees have been fixed by time costs subject to our fees estimate of £1.8m," said a Begbies spokesman. "If our time costs exceed this amount then we have to seek revised fee approval from the relevant body of creditors."
The report also highlights the continuing problems in trying to find a suitable buyer for Warriors - and confirms that all the bidders who sought Rugby Football Union (RFU) approval to play in the Championship this season were "unable to satisfy its requirements".
Begbies says that in accordance with the RFU's 'change of control' requirements, any purchaser of the club is required to satisfy all 'rugby creditors' within 28 days of being issued a licence to play in the appropriate league, unless otherwise agreed - but these rugby creditors were determined by the RFU.
The RFU have said whoever buys the club needs to pay the rugby creditors they had flagged - players, staff and Premiership rivals Gloucester, who were still chasing compensation as a result of the late cancellation of a game at Kingsholm because of Covid in March 2022.
However, Begbies say this does not line up with who their legal creditors are.
"The concept of rugby creditors does not exist under the Act and, in fact, is fundamentally at odds with certain insolvency principles," the report said.
"In particular, we have a statutory duty to distribute the realisations of the Company's assets in a manner that is prescribed in the Act."
"The RFU's requirement for the incoming purchaser to pay rugby creditors ahead of other creditors is inconsistent with this payment regime."
The report also reveals just how much the legacy of Covid is hanging over the Warriors. The company applied for 'business interruption' money from their insurers to try and claw back some cash for the loss of all those games during the pandemic, but it was rejected by the insurers.
As things stand, following the shock collapse of Warriors' separately funded womens team last week, the only Worcester sides playing on the artificial surface at Sixways this season are football teams - non-league ninth-tier outfit Worcester Raiders, from the Hellenic League, and Worcester City Women, who play in the West Midlands Regional League.
Wasps at Sixways in 2024?
But it was announced on Monday that Wasps could be training and playing out of Sixways next season.
Having announced a long-term move to Kent, in the short term they need a new stadium while their new home is being built.
But they are adamant that they do not want to replace Warriors and are committed to assisting Worcester's return to competitive rugby.
If Worcester's affairs can be sorted out, like fellow Wasps and London Irish, there is the incentive of a place in the proposed Premiership 2, if it gets off the ground in time for the 2025-26 season.
It is now over a year ago since Warriors, along with Midlands rivals Wasps, were expelled from the Premiership after going into administration because of their financial problems.
Both sides were given opportunities by the RFU to play at second-tier level in the Championship this season, but neither were able to provide financial stability in time.
When either Wasps or Worcester reapply to join the RFU pyramid, they were originally told that they would have to do so at the bottom rung - but that might not now be the case.
BBC Sport has been told that "the door has been kept open for Wasps, Worcester and Irish".
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