Wasps will take their place in the English Championship next season after their takeover was approved by the Rugby Football Union, but Worcester will not be joining them unless they find new buyers.
Atlas Worcester Warriors Rugby Club Ltd, the consortium led by the club's former chief executive Jim O'Toole, has seen its bid rejected on the grounds of its refusal to meet the conditions set by the RFU.
The English game’s governing body said it will instead work with Worcester’s administrator Begbies Traynor to enable alternative bids in the hope of preserving professional rugby at Sixways.
An RFU board meeting on Friday morning ratified the regulatory assessment of the prospective owners, which was undertaken by the 'Club Financial Viability Group’.
Included within this were reviews of financial information, considerations of the bidders and their business plans for the clubs and external background checks in order to understand the level of risk involved.
Wasps and Worcester entered administration earlier in the season, resulting in their expulsion from the Gallagher Premiership.
If approved by the RFU, any new buyers would be able to relaunch the club in the second-tier Championship, thereby ensuring their survival as professional entities.
The consortium seeking to buy Wasps, which includes members of Wasps Legends, were given the green light subject to several conditions being met.
These include financial commitments to ensure that the club remains funded, the lodging of a significant bond and the swift payment of rugby creditors.
However, Worcester’s buyers said they were unwilling to meet the conditions requested of them, including not disposing of the land around the stadium and swift payment of rugby creditors.
#Together I Can confirm that Adam Hewitt and I are fully committed to bringing Worcester Warriors back to the Premiership. We have the plan and the funding. Give us the opportunity. We Will give you the rugby. Bring it on!— Steve Diamond (@Steve_Dimes) December 15, 2022
A RFU statement read: "The RFU Board was also not satisfied with the information provided, in particular relating to the financial position of the buyer and their ability to continue to fund the club and to deliver on the business plan provided which included significant development at the Sixways site.
"The RFU has not been provided with sufficient evidence of funding. While some information has been provided, this has been only internal P&L information which appears to cover only part of the business of the main shareholder and the RFU was told that no further information could or would be provided.
"This means that there is no information as to debt levels or shareholder funds and no externally verified financial statements have been provided.
"Evidence of a non-binding heads of terms for external off-shore financing has been provided, but this is not committed.
"For these reasons the RFU does not have comfort that the business plan can be funded, nor that rugby is at the centre of the proposal for the business which is an American medical services company.
"The RFU is also concerned by the public statement from the bidders that they are prepared to acquire the site and develop it without a rugby offering."
Atlas can still press ahead with its takeover after being selected by Begbies Traynor, but the absence of RFU approval would be a hammer blow to hopes of preserving Worcester’s professional status.
In what was seen as a pre-emptive strike before the RFU’s decision, Atlas on Thursday released a statement accusing Twickenham of "seeking to impose onerous operational conditions", thereby hindering "any commercial business that is needed to support elite men’s and women’s rugby".
Former Worcester director of rugby Steve Diamond has said that the consortium he is fronting remains interested.
"We understand that the decision will not be the news that Worcester’s former staff, players and fans will want to hear, but the best long-term interests of the club and rugby in Worcester is our key priority," RFU chief executive Bill Sweeney said.