Creditors of Worcester Warriors see £24m go down the drain

The administrators of Worcester Warriors have revealed the club owed £24m to unsecured creditors when it went under.

According to a report by administrators at Begbies Traynor, there is a lack of funds available to repay these unsecured creditors, which include the likes of banks, ticket and season ticket holders, trade creditors and directors.

The 43-page report also confirmed that new owners Atlas have missed a deadline to pay its deferred consideration for the club.

Worcester Warriors’ Sixways stadium and the surrounding land was sold to Atlas for £2.05m in February. Headed up by Jim O’Toole and James Sandford, the consortium paid a non-refundable deposit of £500k on February 1 and then initially agreed to pay a deferred consideration of £1m over a two-year period.

Instead, the date was brought forward to October 9, but Atlas has missed this deadline. Begbies Traynor says Atlas are in communication over the outstanding amounts, which now total £1.2m.

Whilst there are insufficient funds for unsecured creditors, administrators are set to pay out nearly £12m to secured and secondary creditors.

Shares worth £9.81m were transferred from PRL Investor (formerly owned by Worcester Warriors) to Premier Rugby League in April and as the Department of Culture, Media and Sport (DCMS) had a fixed charge over these shares, it has been paid £9.79m.

HMRC is named as a secondary creditor and is owed £2.18m. Administrators anticipate that a dividend will be paid to HMRC, but is currently unable to estimate the timing or amount of distribution.