Worcester winding up order

The house used by academy players has apparently been repossessed.

Surely the first question is what happened to the approx £15 mill Worcester should have received from the CVC deal?

How can a club receive around £15 mill a couple of years ago, yet supposedly now owe the tax man around £6 mill. Am I missing something?

After the Saracens farce and the ongoing situation at Wasps, this really doesnt look good for the rfu. The Rugby Paper are also reporting that two other clubs might have similar problems. I assume all of these clubs received approx £15 mill via the CVC deal?

I am sceptical that any deal can be done this side of Administration. Any buyer, buying before Administration will have to pick up all the known and unknown liabilities of the company. For that to be something a sensible buyer would contemplate would require many weeks if not many months of due diligence examination by accountants and lawyers.

In the circumstances that Worcester Warriors are in, 99% of the time a sensible purchaser would treat with the Administrator and only buy the assets they wanted and 'Tupe' across the staff and players.

It is a smart move to flag interest at this stage because you could place yourself at the head of the queue in negotiating with the Administrator.

I would be pretty certain that any deal that is done will be via a Pre-Pack Administration

Just to provide everyone with a bit more understanding of  the practicalities of what happens when companies get close to insolvency:

1. Sensible directors will take insolvency advice to ensure they are not 'wrongfully trading' if they were wrongfully trading then they expose themselves to potential personal liability from the creditors

2. The advisors (usually insolvency specialists) see this advisory appointment as an opportunity to get into position to get the Administration gig

3. The insolvency advisors will work with the directors and potentially interested parties to work out the shape of a pre pack administration deal

4. Once this is agreed the directors put the company into Administration and the Administrator will convey those assets (for value)  from the company into a Newco phoenix company owned by the new investors 

5. This pre -pack could be challenged by the unsecured creditors who usually come out with nowt

6. The employees are tuped (transfer of undertaking) across to the Newco

7. In Worcester's case there are a number of complications in that there is a regulator involved ('the RFU') and HMRC are all over it and the directors and the insolvency advisors face additional scrutiny so everyone will be treading very carefully.

A Pre Pack Administration is a legitimate route to save the 'goodwill' in the business and to try to preserve some continuity .......in Worcester's case the imminence of the new season means that a deal has to happen swiftly and from a reading of the press reports it is probably unlikely that Worcester have the money to pay August salaries and after the media attention creditors will be screaming for payment.

It will be interesting to see what the RFU do given that last time this happened to a Premiership club they were dropped to the bottom of the pyramid. 

New owners are unlikely to invest if there was little chance that Worcester warriors could remain in the Premiership or quickly get back into i

Of course the proposed New Consortium could just but the shares in the Worcester Warriors company but that is very very unlikely.

From my reading of the press reports  it is likely that a lot of work has been going on in the background but I still think an Administration with all that entails is a more likely scenario than a sale of the shares in Worcester Warriors.

Just my opinion of course 

You could be right Camquin.......but HMRC would accept something rather than nothing so new investors could possibly do a side deal with HMRC ......as long as that was legally tenable under insolvency law........that aspect is definitely beyond my knowledge

I am not sure that a winding up order stops the Directors putting the Company into Administration though. You may know better than me Camquin

WEvans..........you are absolutely spot on! 

Commercially it is a bonkers proposition and with a number of class actions in the pipeline even more so.

PS Halliford . . . loads of clubs are available :-)

PPS ALL OF THE ABOVE IS SAID " WITHOUT PREJUDICE"!!!!

Worcester Warriors players and staff remain in a "state of limbo" with a pre-season fixture just over a week away. Earlier this month, HMRC hit the Premiership club with a winding-up petition over unpaid tax, believed to be in excess of £6m. While the coaches and playing group have continued to train, the non-playing staff have been told not to come into work. It is understood the club's bank accounts have also been frozen. On Monday, co-owners Jason Whittingham and Colin Goldring released a statement saying they were "working through a number of options with our advisors", adding "these include solutions for keeping rugby at Sixways". It is thought club staff have had little direct dialogue with the owners, and only saw the statement shortly before it was released. Sources have also told the BBC their wages have been paid sporadically for the past few months, and that they are not expecting to receive their wages on time next week.