Worcester Warriors have been suspended for the rest of the Premiership season and will be relegated from the top tier. The decision was taken by the RFU (Rugby Football Union) club financial viability group to give time to find an investor and the "best chance for a long-term sustainable future".
Worcester players and staff had their contracts terminated on Wednesday when part of the club was wound up. The financially stricken Gallagher English Premiership club can appeal their relegation.
To be successful, the Warriors would need to show there was no fault for the insolvency event. As well as having their Premiership campaign ended, the suspension sees them kicked out of the Premiership Rugby Cup.
In a statement, the RFU said: "As the club no longer has staff and players on contract, and with many seeking alternative employment, the decision has been made to focus on how the club can be viable over the long term.
“The decision also gives certainty to PRL and Premiership rugby clubs to protect the integrity of the Premiership and allow clubs and their teams to plan for the rest of the season." It added that the club's administrators, Begbies Traynor, are in discussions with several potential investors and it is expected they will also be planning for long-term sustainability.
The RFU also said work is ongoing with an unnamed potential investor to ensure the University of Worcester Warriors women's team can continue competing in the Premier 15s for the remainder of the season, however their Allianz Cup tie against DMP Sharks on 15 October will not go ahead. While WRFC Players Ltd - through which players and staff were paid - has been wound up, a winding-up petition against WRFC Trading Limited, which remains in administration, has been suspended.
It has been confirmed that a condition of any takeover deal will require the payment of all rugby creditors, including any outstanding salaries owed to staff, players and coaches. Some staff are still owed 35% of their August wages, while some did not get paid at all, and nobody was paid for September.
Four players, including England centre Ollie Lawrence and flanker Ted Hill, had already joined Premiership rivals Bath on loan before their deals with Warriors were terminated on Wednesday. Scotland and British and Irish Lions winger Duhan van der Merwe was the first Worcester player to then sign for a new side, rejoining Edinburgh after the High Court's ruling, while Joe Batley moved back to Bristol.
HM Revenue and Customs had been pursuing Worcester for unpaid tax of about £6m. The club also owe a reported £15m, understood to be the largest share, as part of the combined £124m loaned out to Premiership clubs by the Department for Culture, Media and Sport during the height of the Covid pandemic as sports survival payments.
Julie Palmer of Begbies Traynor said: “While they are disappointed by the action taken, we fully appreciate the stance of the RFU and Premiership Rugby.”
She went on: "I am reassured they are continuing to work with us in a positive way to try and achieve a rescue to enable rugby to take place next season in a properly structured approach to enable the long-term viability and success of Worcester Warriors."
Premiership Rugby chief executive Simon Massie-Taylor said while encouraged by work already done at Worcester, the time needed to find "the best long-term solution" put the competition at risk.
"What is clear is that it will take much more time to get the right solution in place for the club," he said.
"Whilst we appreciate this decision will be disappointing to many people close to Warriors, we value the certainty this decision brings to the other Premiership clubs. We will now continue to work with administrator, the RFU and other key stakeholders to find the best outcome."