Worcester

[Heathen]

Statement from Jim O'Toole :

https://twitter.com/JimOToole/status/1563756855410786304

Would going into Administration mean that they get a points deduction?

[Neils]

Article in TRP says PRL will not parachute another team in to replace them. It will stay a 26 week league though as the EAs reject making it a 22 week league. Apparently they are not prepared as they have a bye week to start.

[NellyWellyWaspy]

Statement from Jim O'Toole :

https://twitter.com/JimOToole/status/1563756855410786304

Would going into Administration mean that they get a points deduction?

The PRL can chose not to impose such a deduction due to the Covid situation. BUT ... and this is a BIG but. Not imposing a penalty would encourage any other club who is in a similar situation to take advantage of the Covid joker and do the same.

Worcester have been rearranging the financial asset deckchairs to try to protect some assets from seizure by creditors. Not that I think that would necessarily work, as such shenanigans can be reversed by the Court, but such action is costly and could take years.

One thing you can be sure of. HMRC will want someone to pay them otherwise they will vote against any proposal. The assets of the existing club cannot be liquidated and used to preferentially pay HMRC, so the new buyer would have to agree to cover HMRC for any shortfall (in effect, buy that debt). The buyers are unlikely to do so for other debtors. The rest will be left to hang out to dry. A lot of companies, council and individuals are going to lose a lot of combined money.

Now, just assuming that all the involved business go in to a combined administration, the administrator becomes 100% liable to pay ongoing debts, such as wages. The players and coaches are going to be in the firing line here. Their contracts would legally have been ended, allowing the administrator to impose whatever deal they wanted, knowing the players can either accept of walk away from rugby.

What happens to Worcester's share in the PRL? Frozen, for the time being, probably.

What would the PRL do? Would it force Worcester's hand regarding players, by giving the other clubs permission to cherry pick players and for them to be temporarily outside the cap, thus forcing the administrator to honour existing contracts or lose players, and thus the club would fold anyway?

Going in to administration is a nuclear option. What you think you might achieve and be able to do often doesn't turn out that way.

Here, the PRL

[Chunky24]

Not sure of the business side but going in to administration this season and taking a points penalty seems to be what he wants presumably as there is no relegation. This would mean they can play the season potentially with whatever players they have and not be relegated while planning and investing for the following premiership on and off the field (assuming he got control plus all the ifs, buts and maybes NWW mentions)?

[MarleyWasp]

Reading between the lines it sounds as if the owner's expectations for an offer aren't realistic and this is the only alternative.

[SBSam]

Would this be covered by RFU rules? I couldn’t find anything other than salary cap refs for the PRL. Tye RFU financial regulations do seem to include relegation.

[NellyWellyWaspy]

Reading between the lines it sounds as if the owner's expectations for an offer aren't realistic and this is the only alternative.

When things are dire, by definition the owner no longer has the funds to keep it going. By law, they have to take some form of Insolvency action, and the creditors will decide what, most often HMRC. If there is only one buyer, the price will be low. Once in, let us say for example, Administration, things tend to happen quickly and creditors tend to get very little.

If the current owners truly are at that point, things are grim. Hope is not generally justified. If the PRL are indeed inclined to let the insolvency slide due to Covid (my guess is they will), the potential buyers can just sit back and watch it unfold to the point that the current owners no longer have control of events. Then, the deal will be made with the Insolvency Practitioner, in theory with some oversight from the creditors committee (but in reality little oversight).

No one is going to come out of it smelling of roses. There will likely be a lot of ill will and unhappiness. Well meaning locals and supporters who have extended credit will likely get stiffed. HMRC will lose its money.

And, as I said, whilst this is very sad for a very proud club, players and supporters, what will be key is the reaction of the PRL. It will have to be swift in any case, with the new season looming. Whatever decision they make could kill the club, or encourage other badly indebted clubs to go down a similar route to rid themselves of HMRC debt and other debt. Unintended consequences will abound.

[SBSam]

How long can covid be used as an excuse, though. Worcester had had the CVC money, millions in covid support and a full, unrestricted season.

[SBSam]

Would this be covered by RFU rules? I couldn’t find anything other than salary cap refs for the PRL. Tye RFU financial regulations do seem to include relegation.

It’s ok, I have answered my own question.

[NellyWellyWaspy]

How long can covid be used as an excuse, though. Worcester had had the CVC money, millions in covid support and a full, unrestricted season.

You might think so, but it depends what the PRL wish as an outcome. Most rules and regulations tend to have a get out of jail free loophole.

If the PRL, who undoubtedly have a much clearer picture of what the state of play is amongst the other 12 clubs (they will have been having informal talks for well over a year, as this train wreck will have been coming down the tracks for some time), think that one or more other clubs will be following Worcester (whose future is by no means a done deal, either way), then, is it tenable to 'punish' Worcester? The PRL might end up with a league of maybe just 6 clubs. They have contracts with broadcasters that will most certainly be at jeopardy.

[Bloke in North Dorset]

As well as what NWW says, if the Directors know they can't cover  operating costs then they are trading fraudulently. I think there was one post where they said they had personally guaranteed salaries.

I suspect the crunch will come on pay day. If the pay wages then they might get a stay but as it unlikely anyone will extend them credit its hard to see how they can put a team out for their first game which is on the 10th away to Irish.

A very sad state of affairs.

[NellyWellyWaspy]

As well as what NWW says, if the Directors know they can't cover  operating costs then they are trading fraudulently. I think there was one post where they said they had personally guaranteed salaries.

I suspect the crunch will come on pay day. If the pay wages then they might get a stay but as it unlikely anyone will extend them credit its hard to see how they can put a team out for their first game which is on the 10th away to Irish.

A very sad state of affairs.

At least an away game is cheaper to fund. A home game would mean opening up the stadium. Suppliers of the manpower, the food, etc, would likely baulk at extending credit for that. So, the real crunch will be the Exeter game on the 18th, four weeks from now. Nowhere near enough time to get things sorted.

[MarleyWasp]

Well this is an interesting twist... https://twitter.com/mcossalifrancis/status/1564344931308769281?s=24&t=BAUpTLvMUqmHTh3J-hAtEg

[Bloke in North Dorset]

Just seen it on Twatter. NWW called something similar and how we laughed.

[Raggs]

The fact it was dismissed immediately suggests our owners aren't panicking.