London Welsh Rugby Club Enters Voluntary Liquidation
Written by: Keith Tully
Reviewed: Wednesday 7th December, 2016
The rugby club London Welsh has entered voluntary liquidation after its directors and chairman accepted that their business model had become fundamentally unsustainable.
London Welsh is one of the oldest rugby union clubs in England but has been beset with financial difficulties in recent months and has faced a series of winding up orders in recent weeks.
Bosses of the club have told their employees that they face an uncertain future and a difficult festive period.
The club’s chairman Gareth Hawkins said in a statement: “London Welsh has reached a difficult point in its illustrious history. Due to a playing budget of £1.7m and gates at games numbering as low as 400, the club’s current business model is totally unsustainable.
“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. All creditors of London Welsh Rugby Club will be contacted by the liquidator.”
Hawkins went on to explain that he hopes that London Welsh will soon be back playing rugby at its Old Deer Park sports ground but on the basis of a very different financial and operational structure.
“It will first be necessary to change the club’s business model to a semi-professional set-up and form a new company,” he said.
A sum of around £300,000 is also understood to be required for London Welsh to regain its place within the Greene King IPA Championship, which is the second tier of rugby union competition in England.
The club’s chairman has said he is confident a new London Welsh operation can make its semi-professional business model work.
“Richmond have proved that a club can compete in the Championship with a semi-pro model, and I firmly believe we can make this work in 2017,” he said.
London Welsh was formed in 1885 and played in the top tier of English rugby as recently as 2015.
Having settled a sizable tax bill with HM Revenue & Customs and avoided a winding up order in September 2016, there were hopes until recently that overseas investors may be able to provide the financial backing that the club needed to remain viable.
However, that financial backing did not materialised and the club has now officially been entered into liquidation on a voluntary basis.
Author
Keith Tully
Partner
Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.
