Worcester Warriors players and staff are to have their contracts terminated after part of the club was wound up in court.
The company that held those contracts – WRFC Players Ltd – was liquidated in the High Court on Wednesday morning.
HM Revenue and Customs (HMRC) has been pursuing the Warriors for unpaid tax in the region of £6million.
While Worcester are in administration, the company that holds player and some staff contracts – WRFC Players Ltd, a subsidiary of WRFC Trading Ltd – had been operational and was the subject of HMRC’s action.
Judge Nicholas Briggs made an order winding up WRFC Players Ltd at an Insolvency & Companies Court hearing on Wednesday.
This means that contracts are automatically cancelled for all staff and players. They will now all be able to find new jobs.
Ted Hill, Ollie Lawrence, Fergus Lee-Warner and Valeriy Morozov have already joined Bath on loan and others will follow them out of the door having become unemployed, along with members of staff.
Because they had not been paid for September, all players were able to leave on October 14, meaning that liquidation has simply brought their departure forward by nine days.
Administrators Begbies Traynor are seeking a buyer for WRFC Trading Ltd and are talking to two consortiums, but any successful takeover will bring with it the urgent task of rebuilding the squad.
Worcester’s matches against Gloucester and Harlequins were cancelled on Monday and while they remain suspended from all competitions, they could be restored to the Gallagher Premiership if a buyer is found by the middle of this month.
The Rugby Players Association (RPA), which represents professional rugby players in England, said "lessons must be learnt" from the "terrible situation".
The trade union said it will continue to support its members through this "hugely challenging and difficult time".
In a statement, it said: "The RPA is extremely saddened to hear of the liquidation of WRFC Players Limited. We stand with all Worcester employees. Our immediate thoughts are with all the players and staff who have lost their jobs today due to this terrible situation.
"We will continue to support our members in all ways that we can throughout this hugely challenging and difficult time, as we have done since it became clear that the club was in financial trouble.
"It is clear that lessons must be learnt from this situation and that players must be fully involved and consulted in any discussions regarding their futures and the future direction of the professional game."
Bill Sweeney, the Rugby Football Union CEO said: “The RFU will continue to speak to the administrators, and potential buyers, during the course of the next 24 hours to understand the possibility of a buyer taking over the club in time for the men’s team to participate in the Gallagher Premiership during season 2022/23. “We are also liaising with the administrators in relation to discussions with potential funders, which may enable the University of Worcester Warriors women’s team to continue in the Allianz Premier 15s even if the men’s team cannot continue to participate this season."