London Wasps to appoint administrators to 'protect club's interests'

[dutchman]

RFU rejects clubs' appeals over Premiership relegation



Worcester Warriors and Wasps have both had their appeals against relegation from the Premiership dismissed by the Rugby Football Union.

Under RFU regulation 5, both clubs made 'no fault insolvency' applications citing the Covid pandemic as the main reason for going into administration and being suspended from the top tier.

But the RFU's club financial viability group rejected both applications.

Those decisions have been further ratified by the RFU board.

Both clubs now have the right of appeal to an independent panel, but have also been reminded that the timeline to agree sales of the clubs is 12 December, to allow the Premiership and its 11 remaining member clubs sufficient time to plan for the 2023-24 season.

The RFU has confirmed that if the expected sales of Wasps and Worcester take place within the timeline, and rugby creditors are paid, then both clubs will begin the 2023-24 season in the Championship.

The applications were made by the respective administrators for both Wasps Holdings Limited and WRFC Trading Limited, the main operating entities of the respective clubs.
Wasps plan 'lacked resilience'

RFU chief executive Bill Sweeney said: "We are all deeply concerned by the insolvency of Worcester Warriors and Wasps.

"We appreciate this decision will be disappointing for the clubs and their fans, but it's clear from the club financial viability group's investigation that there were factors beyond Covid that resulted in the clubs entering insolvency.

"This has reinforced the need for greater financial transparency between clubs, Premiership Rugby and the RFU to enable both organisations to have better visibility of how these businesses are run."

The report highlighted that Wasps had shown "insufficient evidence" that there had been no fault on the part of the club or the directors or that "the financial impact of Covid was the sole reason of WHL's entry into administration".

It also said that the club's business plan "ultimately lacked resilience and could not transform what was a loss-making and debt-funded business (specifically via the retail bond issued in April 2015) into a sustainable and self-serving operation."

"The business model clearly never managed to reach the level it was intended to via the cash generation envisaged by the subsidiaries controlling the CBS Arena," it added.

"But equally the operation was immeasurably vulnerable to the lack of ability to refinance the bond, which ultimately was a key event that precipitated WHL's entry into administration."

[dutchman]

Tories storm out of council chamber in row over CBS Arena debate



A row over a debate on the CBS Arena led to the Coventry Conservative group storming out of the council chamber yesterday (6 December.) All of the Tory councillors left the meeting after they were told by its chair, Lord Mayor Cllr Kevin Maton, that they had to change the wording of a motion they wanted to raise.

The party had tried to move a debate calling for Labour council leader Cllr George Duggins to explain his communications around the council's alleged role in a failed bail-out of Wasps and arena operators ACL. The motion raised by Tory leader Cllr Gary Ridley and seconded by party colleague Cllr Peter Male stated: "Following the council’s admission that talks have taken place with Wasps RFC regarding a potential bail-out, this council calls on the leader of the council to explain why his version of events differs from those of the chief executive."

Labour councillors objected to its wording as they claimed 'the council' referred to all 54 elected members who they said had not taken part in any talks. Labour councillor Mal Mutton called the motion a "downright lie" and said it should be "removed without delay."

"We the elected members of this chamber are the council, and we've never admitted to Wasps about a potential buyout because it's never been on the order paper," she said. "There's absolutely no reason for this to be on the agenda and it should be removed without delay."

Fellow Labour Cllr John McNicholas also called for the motion to be withdrawn and fellow Labour councillor Linda Bigham added: "I certainly haven't taken place with any talks (sic) - have the members opposite had any talks?

"As far as I am aware this council has not, so this is an untruth Lord Mayor. And I will not be accused of an untruth purely for people to try and make political points. I'm not a liar and I will not be accused of having meetings that I have never had."

But council officers told the Lord Mayor that there was no constitutional reason the debate couldn't go ahead as it was. The Lord Mayor, an independent figure who was elected as a Labour councillor, added that it was not the first time motions had been argued against as being inaccurate.

"It's clear that we cannot be in a position where either the whim of the Lord Mayor or anybody else can say a debate cannot take place," he said. However, the Lord Mayor also said that the Conservative Group should explain their use of the term, as he claimed they would use the answers in the debate to suggest that individual councillors had been involved in the talks.

He then proposed a compromise, saying: "There is an opportunity now for an adjournment now for a discussion between the leader and the deputy leader and the leaders of the opposition to see if there is a way for this to be dealt with later. I will give this 10 minutes."

But Conservative Cllr Marcus Lapsa called for the motion to go ahead as it is, saying: "You've already said the debate can go ahead. You've already had legal representation to say it's going ahead."

"Just because some people on the other side of the chamber don't want to debate it, you've already made a decision, so can we just get on with the debate?" The Lord Mayor responded: "I'm giving you every opportunity - because I know you'll use it later - for this debate to happen.

"I was simply saying I was giving 10 minutes for the leaders to talk to see if there's a way of resolving this because quite clearly you're incapable of doing that at the moment."

He then said: "I think at the moment there is two options. Either the leader and deputy leader of both parties can go away and see if there is a form of words that addresses the concerns that Cllr Mutton has raised."

"If you want to reword it then that gives you the opportunity. If you're not prepared to do that, then I am going to rule that this is no longer a valid motion and I am going to move onto the next item. That is your choice."

Following the Lord Mayor's comments, the Conservative councillors left the meeting in protest and the debate was abandoned.

[dutchman]

Rugby club's debts totalled £95m when they went into administration - report



Wasps had debts totalling £95m when the club went into administration, reports by administrators FRP have revealed.

They show that the combined debts of the rugby club's parent company Wasps Holdings and their three Coventry Building Society Arena companies have cost taxpayers millions of pounds.

Dozens of local firms were also owed money, including Arena tenants Coventry City who were owed about £465,000.

Wasps and their stadium businesses owed more than £21m to public bodies.

Wasps Holdings entered administration on 18 October, resulting in their relegation from the Premiership.

The administrators' reports have highlighted the full extent of the CBS Arena's and Wasps' debts.

Taxpayers took the biggest hit as a result of the £14.1m unsecured Covid Sport Survival Package (SSP) loan from the Department for Digital, Culture, Media and Sport (DCMS), administered by Sport England.

A further £7m owed to His Majesty's Revenue & Customs (HMRC) has not been repaid - and there were also losses for local taxpayers.

Coventry City Council was owed more than £270,000, with the council telling the BBC the bulk of it (£228,152) was as a result of unpaid business rates.

Warwickshire County Council was owed £600 and Stratford District Council £2,868, while West Midlands Police lost £20,570 and West Midlands Ambulance Service took a loss of £1,755.

The reports also show former Wasps owner Derek Richardson had loans of about £16.5m in the various Wasps companies when they went bust.

It is a bigger blow to the public purse than when Worcester Warriors collapsed in October, owing the government £16.1m from their SSP loan (the biggest of the combined £124m package of loans given to all 13 Premiership clubs), as well as £2.1m in unpaid taxes to HMRC.

The other big losers were Wasps bondholders, who were owed £35.2m.

They did receive around £7.4m back, but it still results in total losses of £27.8m.

It was not just taxpayers affected by the collapse of Wasps as more than 40 local firms lost money.

Signage company Moseley Signs - who recently removed Wasps' logo from the Arena - were owed more than £92,000.

Coventry City Council took another hit as a result of Tom White Waste, which is owned by the local authority, suffering a loss of £11,336.

Surrey-based Compass, which previously supplied catering and events support to the stadium, lost £7.6m, while Delaware North, who had taken over from Compass were owed £4.5m.

[rebbonk]

club's debts totalled £95m when they went into administration

I would suggest that there are legitimate claims here for maladministration. It is illegal to trade when you know that you cannot service your debts, and £95M is hardly acceptable by way of a margin of error.

Somehow, I won't be holding my breath for anyone to face the courts!