London Welsh to remain in Championship after takeover 21/07/2009 |
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Red Dragon Rugby's acquisition of the 124-year-old club was completed over the weekend and the Rugby Football Union are satisfied the deal meets all its conditions.
Among their demands, the RFU had stipulated any new investor must have enough funds to support the club for at least two years.
"London Welsh are once again solvent and so will continue to play in the Championship in the upcoming 2009/10 season," the RFU announced in a statement. "However, the RFU can confirm that London Welsh will start the 2009/10 season with a five-point penalty.
"This is due to the club going into administration and its failure to inform the RFU of their intended administration when they became aware it was likely to happen contrary to RFU regulation 3.6."
London Welsh called in the administrators after chairman and principal investor Kelvin Bryon announced he was unable to bankroll the club's push for promotion into the Guinness Premiership. The club announced it was looking for new owners to invest an additional £1million-£1.5million per year.
London Welsh have announced that existing creditors totalling £1.3million have agreed to write off their debts. The other bona fide creditors of around £450,000 have been underwritten and will be paid in full.
(Source: telegraph.co.uk)
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