Scale of rugby league club’s cash crisis revealed

Rugby league club Bradford Bulls owed £1.84m when it collapsed into administration – which led to a court injunction, directors’ suspensions and, ultimately, failure.

It was the third time in four years the former Super League giant had failed financially, and the takeover saga rumbled on for two months before administrators announced no buyer had been found and the club was to be liquidated.

Earlier this week a consortium including Andrew Chalmers and Graham Lowe was unveiled as the backers of separate business that will create a new rugby league club in the city.

The administrators’ report has set out the scale of the Championship club’s problems – and the complex nature of the negotiations that took place behind a veil of non-disclosure agreements, despite what they described as “ill-informed” speculation in the media and on social media.

Gary Pettit and Gavin Bates of PBC Business Recovery, who were appointed administrators on November 14, had to obtain a freezing injunction to safeguard £132,900 that enabled November’s salaries to be paid.

They also suspended the business’s directors – emphasising it was a “neutral act in law” and did not imply wrongdoing – which made it harder to get a detailed understanding of the company’s financial position.

The pair have established the business, Bradford Bulls Northern, owed £1.84m when it entered administration.

It has directors’ loans of £750,000 and an overdue tax bill of £400,000 – which is still owed despite HMRC serving a winding-up petition last July. There were more than 400 other creditors, which are owed nearly £700,000.

The biggest trade creditors include kit manufacturer ISC, which is owed £216,000, the Rugby Football League (RFL), £66,000, and Bradford Council, £29,000.

Other rugby league creditors include League Express owner League Publications, which is owed £17,600, while rugby league clubs are also missing out on thousands, including £11,000 to St Helens and £3,000 each to Leeds Rhinos and Whitehaven.

The administrators sought a buyer and received 13 expressions of interest which resulted in four offers. However two were quickly rejected for being below the value a liquidation was expected to recoup and following negotiations, the remaining two consortia were unable to submit an offer that the administrators could accept.

At that point in early January the administrators, who forecast their total fee will be £233,000, announced it would begin the process of liquidation.

In response the RFL invited people who were interested in starting a new business to create a rugby league club in Bradford to begin discussions – an action the administrators described as “unauthorised”.

Regardless, a deal with the RFL, but not the administrators, was completed to launch a replacement club. Its first match is in two weeks, against Hull KR.

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