London Welsh, the 130-year-old Greene King IPA Championship rugby club, is seeking voluntary liquidation following the acknowledgement by Chairman Gareth Hawkins that the club’s current business model is ‘totally unsustainable.’ Although HMRC officials were pushing for a Winding up Petition at a hearing last Monday, Registrar Christine Derrett adjourned the application until January 23 to give creditors time to meet. This follows several prior postponements over the course of the Exiles four court visits during 2016. “The debts accrued from trading in this way have left the club with no alternative but to seek liquidation. Having to break that news to 40 staff members yesterday was extremely difficult, commented Gareth Hawkins.
In a statement on the website, London Welsh stated: “The club remains confident that it will be able to satisfy such outstanding amounts over the forthcoming weeks.” Hawkins furthered: ‘””In the new year, it is the hope and intention of the board that London Welsh will be able to return to playing at Old Deer Park. However, it will first be necessary to change the club’s business model to a semi-professional set-up and form a new company, and then raise £300,000 so that the club can regain a position within the RFU Greene King IPA Championship.
Hopes for Foreign Investment Unfounded
Earlier this year, it looked like there might be hope for the Club, with rumours of foreign investment circulating during much of the last year. These rumours have proven unfounded, alas, as illustrated by the Daily Telegraph’s recent expose of the supposed “Californian-based investment group” who purportedly presented the club with a bogus bank letter showing that he had $100 million to invest.
Heading into 2017, the pressure will be on Gareth Hawkins, the former under-15s coach and businessman who was appointed London Welsh chairman three weeks ago, after Bleddyn Phillips resigned, to make the best of the club’s precarious financial situation.
855k Owed to Creditors
“It is bad, but it is not an insurmountable problem,” Hawkins said of the Club’s financial situation. (Their most recent set of accounts showed losses of almost £1.2m, with the club owing £855,764 to creditors within a year and £1,007,628 to longer-term creditors.) “There are lots of avenues that we could go down to precede the Revenue winding us up. Some of them are difficult, some of them are expensive, but we will find a way.
“It is a bit simplistic to think that money will fix it. It is more of a long-term problem of keeping a club going in the Championship without a £2 million budget. operated a proper cash flow, all the things that you need to run a business are missing.”
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