[TeflonTed]

Unashamedly pinched from SN board, with thanks to poster BromsgroveBeat87, who attributes this to @RFU Twitter. Although I can’t see that post, but here it is anyway…..

1 What is the current status of Worcester Warriors? Will they be playing next season and, if so, in what competition?

Worcester Warriors (men's team) are now exiting the league structure and will not be participating in the league (as happened when London Welsh last went into insolvency). A new club could restart at the bottom of the pyramid in season 2023/24 but this would be right at the bottom.

2 Will Worcester Warriors be allowed to merge with or take over another club? If so, what are the consequences of them doing so?
There have been various press reports about different possibilities, such as a merger or taking over the first XV of Stourbridge RFC. All of this would need RFU approval and we would need to consult with other relevant stakeholders (e.g. other local clubs). At the moment we have not received any proposals. We don't want to pre-empt any process, but the regulations are designed to prevent a club effectively "buying" a league position.

3 Why was the club sold to the current owners, Atlas, when there were other potential bidders for the club who could have maintained professional rugby? How did that happen?
 What say did the RFU have in the sale?

The decision who the clubs was sold to was purely a matter for the administrators, and the administrators were clear that the RFU (and DCMS) had no say in the sale process.
The administrators were clear that their legal duty was to maximise the sale price and so would not prioritise a sale to a group who would guarantee professional rugby. We believe that there were three bidders in total, and it was purely the administrators who made the choice. The administrators only informed the RFU of the sale once contracts had been signed.

4 Having bought the club, Atlas then withdrew Worcester Warriors from the process to apply for Championship status - What conditions were the RFU looking to put on the new owners?
The RFU put forward a number of conditions that the bidders for Worcester Warriors would need to meet to protect against the particular concerns relating to the club and what had emerged through the due diligence process undertaken by the RFU. These include commitments not to dispose of the land around the stadium (thereby securing it for the club and the local rugby community), swift payment of rugby creditors and other key governance conditions. Atlas, who were selected by the administrators of the insolvent WRFC Trading Limited, were not prepared to meet these conditions, and so the RFU was unable to approve their application.
The RFU was also not satisfied with the information provided, in particular relating to the financial position of the buyer and their ability to continue to fund the club and to deliver on the business plan provided which included significant development at the Sixways site. The RFU was also not provided with sufficient evidence of funding. While some information was provided, there was no information as to debt levels or shareholder funds and no externally verified financial statements were provided. The RFU did not have comfort that the business plan could be funded.
The RFU was also concerned by the public statement from Atlas that they were prepared to acquire the site and develop it without a rugby offering.
Atlas did not accept the RFU's position, did not sufficiently engage with the necessary conditions required and therefore put themselves in a position where the RFU could not approve their bid.

5 Is there any chance of Worcester Warriors' rugby creditors being paid?
At this point, sadly it seems there is little or no chance that Rugby Creditors will be paid. Atlas are outside the jurisdiction of the RFU and the RFU cannot force them to pay.

[TeflonTed]

Atlas Statement :-


"We see no reason for a new Worcester Warriors to go to the bottom of the rugby pyramid," said Jim O'Toole.
"We are still in constant dialogue with Stourbridge RFC about the proposed commercial sponsorship with their first team playing as a re-branded Worcester Warriors in Regional 1 Midlands in 2023/24, with the goal of a return to Championship level rugby within 5 years and their migration to Sixways. That remains the aim, subject of course to Stourbridge membership approval firstly, then RFU consultation and approval.

"We also recently explained that we will be setting up a Hardship Fund, which will be managed by an independent body, with funding to be made available to those who were most critically impacted by the insolvency of the previous business including local businesses. 
"We have shown our resource and commitment to the local community by taking on all running costs of the stadium and staff since exchange which in turn has given comfort to staff that the stadium would remain open, that they would be paid on time and that the Warriors Women, the Warriors Foundation, Midlands Academy, Worcester Raiders and the many other events could continue on-site while we move to completion in the coming weeks.

"We look forward to bringing rugby back to Sixways as soon as possible, providing jobs for the local community and bringing back life to the venue which will benefit the whole community and our next statement will be in relation to completion in due course."

Which seems to say basically that the RFU are wrong.

[SimonG]

The RFU are very often wrong but not in this case I'd suggest.

Lots of waffle and very little action from Atlas.

[Latecomer]

"We look forward to bringing rugby back to Sixways as soon as possible, providing jobs for the local community and bringing back life to the venue which will benefit the whole community"

Atlas' mission statement seems to have changed quite a lot since they rode into town on their white chargers.
Still, at least they've kept us well informed throughout..............not !!

[A38]

For what worth, this is my speculation as to what has happened over the last eight months or so.

1) The previous owners had been running out of cash for some time and the two companies, WRFC Trading Limited and WRFC Players Limited were probably technically insolvent by mid summer.
2) Over this period, creditors built up significantly. We know that the Revenue was owed significant sums, trade creditors had not ben paid for supplies and there was a hefty bank overdraft.
3) The owners seemed to have "kept house" - the classic device for people in financial distress to avoid facing their creditors face to face. Promises were made which could not be kept and towards the end there was no money to make the payroll.
4) Over the summer there were various land transactions for which we do not know the reason - although one, involving the land on Pershore Lane, resulted in money being borrowed, ostensibly to cover cash shortages, at high interest rates.
5) It is typical in situations such as this for directors to be less than forthcoming about the true position as they, in desperation, seek a way out. But, again, typically in such situations there is just no way out.
6) The Revenue lost patience as did, it is reported, at least one trade creditor and formal proceedings were begun.
7) The Newcastle game proved to be the last Premiership game for Worcester Warriors but even at that time it was theoretically possible for the club to maintain its position if a new owner could be found and if the then directors were prepared to sell for the very nominal amount which would have been on the table.
8) However, a new owner would be faced with a mountain of debt and would also have to find many millions just to cover day to day expenses and salaries. My guess would be that as a minimum £10m would be required - maybe more.
9) But why would a new owner willingly come up with such a large sum of money just to maintain Premiership status? It does not make business sense and accordingly the only way forward was Administration in the knowledge that the inevitable sanction of relegation to the Championship the following season could not be avoided.
10) Worcester ceased to be a part of the Premiership and the Administrators began the task of "looking at the books" and marketing the club's assets and, following Receivership, the Sixways site.
11) As we know Atlas emerged as the preferred bidders. We cannot know how detailed their financial plans were but one does have to wonder if the RFU's requirements, particularly as regards unpaid players wages, were fully understood.
12) The RFU had suffered considerable criticism for a lack of overview of what was happening at both Worcester and Wasps and it should have been no surprise that any new owners of both clubs would have to satisfy far more stringent enquiry than had happened in the past.
13) Atlas and their US backers could not meet the RFU's requirements. They should not have been surprised at this but they seemed to be; maybe someone at the RFU had given them to believe that all would be well only for that person to be overruled by superiors.
14) It was at this point that the financial strength of the US backers came into question. It is a moot point as to whether the money was actually available - on the surface it did not look like it but we did not know what if anything was below the surface - but it is also possible that it became to be realised that far more money would be required, to complete the purchase and to gain Championship status, than previously thought. A significant miscalculation of what would be required to clear the so called rugby creditors would have been a major factor and it could well be that the US backers declined to be further involved faced with the RFU's requirements even if they did have the funds.
15) Atlas then found themselves with a situation where there was no prospect of Worcester Warriors joining the Championship next season - or any league for that matter other than at the very bottom of the pyramid - and an absolute hole in their financial projections.
16) Which is where we are - promises of Wasps as tenants and Stourbridge's first team rebadged as Worcester Warriors. But's that's all we have at the moment- promises - and a clear indication that the RFU have put obstacles in the way, very reasonable obstacles.

So, I revert to my analysis: -

a) Worcester Warriors in the hands of Messrs Whittingham and Goldring could not continue, it had run out of cash.
b) There was a theoretical prospect of a buyer being found - but that buyer would have had to put down many millions of pounds more or less as the Newcastle game was being played. If that had happened the Quins game and all the others could have gone ahead.
c) But it was never a business proposition and Administration was inevitable.
d) Atlas, as preferred bidders, miscalculated how much cash would be required to achieve Championship status and accordingly the possibility of the Championship was lost.
e) The US backers either did not have the money or the appetite to continue and withdrew.
f) The prospect of Wasps picking up the Sixways site at a fire sale price looms.

Overall, there was never any real prospect of Worcester staying in the Premiership; there was no one who could afford to or want to inject the many millions needed. It didn't matter that there was a decent squad assembled - there was just no money. It was an illusion.

[SimonG]

With the state of Premiership Rugby at the moment it seems the only buyers to be trusted are those with long-term connections to the club in question either as supporters or players (as at Wasps). You have to seriously question the motives of anyone else.