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.
became the majority shareholder of Atlas last month and this week revealed plans to move Wasps to Kent.
After paying £2 million to finalize the acquisition of WRFC Trading Limited, Atlas was had to pay an additional £1 million by October 9th when they were revealed as the new owners of the Warriors in May.
However, they missed that deadline, and as a result, Jim O’Toole and James Sandford, the original owners of Atlas, did not repay a loan by the May 28 deadline. As a result, one of Holland’s firms, Loxwood Holdings, now owns the 97% stake of WRFC Trading by default.
The administrators cost is presently projected at £1.8 million for all the work completed in the 13 months since they were recruited to manage matters from Sixways in September 2022 after the previous ownership collapsed, according to the most recent Begbies Traynor report.
A Begbies representative stated, “Our fees have been fixed by time costs subject to our fees estimate of £1.8m.” “If our time costs exceed this amount then we have to seek revised fee approval from the relevant body of creditors.”
The study verifies that none of the bidders that applied for Rugby Football Union (RFU) license to participate in the Championship this season were “unable to satisfy its requirements” and emphasizes the ongoing difficulties in finding a suitable buyer for Warriors.
Begbies states that, unless otherwise agreed, any buyer of the club must appease all “rugby creditors” within 28 days after receiving a license to play in the relevant league in compliance with the RFU’s “change of control” regulations. However,
The Rugby Football Union (RFU) has stated that whoever purchases the team must reimburse the rugby creditors they have identified, which include players, staff, and Premiership rivals Gloucester. Gloucester was still seeking payment for the game’s late postponement at Kingsholm in March 2022 due to COVID-19.
Begbies assert that this is inconsistent with the identities of their actual creditors.
“The concept of rugby creditors does not exist under the Act and, in fact, is fundamentally at odds with certain insolvency principles,” the report stated.
“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.”
Rugby creditors must be paid by the prospective buyer before other creditors, according to the RFU’s criteria.
The article also makes clear how much the Warriors’ legacy is clouded by Covid. The corporation attempted to recover part of the costs for the loss of all those games during the epidemic by applying for “business interruption” money from its insurers, but the underwriters denied their request.
As of right now, the only Worcester teams using the artificial surface at Sixways this season are the non-league ninth-tier Worcester Raiders from the Hellenic League and Worcester City Women from the West Midlands Regional League. This is due to the shocking collapse of the Warriors’ independently funded womens team last week.
Wasps at Sixways in 2024?
However, it was revealed on Monday that the Wasps might practice and play in Sixways in the upcoming campaign.
They have declared a long-term relocation to Kent, but while their new house is being constructed, they urgently need a new stadium.
However, they are steadfast in their desire to support Worcester’s comeback to competitive rugby and refuse to take Warriors’ position.
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