The High Court has adjourned an application by HMRC to wind up London Welsh rugby club until the New Year, giving the club the opportunity to put in place its plans to enter voluntary liquidation as a result of its substantial debts
HMRC’s application, believed to be in relation to non payment of a tax bill of some £200,000, has now been delayed until January 23.
John Cullen, partner at Menzies LLP and instructed adviser to London Welsh for voluntary winding up, said: ‘This will allow the club more time to put its affairs in order. Importantly, there may now be an opportunity to safeguard and honour upcoming fixtures.
‘The High Court’s decision to adjourn is a more favourable outcome for the club and will allow assets and funds to be salvaged and disseminated to creditors in a timely and considered way. This will be better for all concerned.
‘The shareholders and creditors will be meeting on December 23, where shareholders will place the company into voluntary liquidation, creditors will then formally appoint a liquidator and a report detailing the club’s history and how the voluntary winding up will take place will be presented.’
The club is now mid-table in rugby’s second tier, the Championship.
Last week, London Welsh chairman Gareth Hawkins said the club aimed to seek voluntary liquidation at what he described as a ‘difficult point’ in its 130-year history.
‘Due to a playing budget of £1.7m and gates at games numbering as low 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,’ he said.
Hawkins indicated that the club plans a new approach in the New Year, but said: ‘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.’
