The contracts of Worcester Warriors players and personnel will be terminated as a result of the club being wound up in the High Court.
HMRC has been pursuing Worcester, who had been suspended from all tournaments, for almost £6 million in unpaid tax.
Judge Nicholas Briggs ordered that WRFC Players Ltd, the company that pays the players and staff, be wound up.
The filing of a winding-up petition against WRFC Trading Limited, which is still in administration, has been halted.
The four players who were loaned to Bath on Monday, as well as the rest of the squad, are now free agents and can join with any club.
Scotland and British & Irish Lions winger Duhan van der Merwe has signed for a new club after rejoining Edinburgh.
The Warriors had no representation in court.
The joint hearing for both companies, held at the Royal Courts of Justice in London, was relayed online as a result of the train strike.
“This is the darkest day for English rugby,” said Warriors director of rugby Steve Diamond. “It’s ended up like the Titanic, sadly. The ship has sunk, the captains are nowhere to be seen.”
All WRFC Players Ltd debts, including the estimated £6 million owed to HMRC, remain unpaid.
The club also owes a reported £15m, considered to be the highest portion, as part of a total £124m loaned out to Premiership clubs by the Department for Culture, Media, and Sport as sports survival payments during the height of the Covid pandemic.
The ground and the club are owned by WRFC Trading Ltd, which went bankrupt on Monday, becoming the first to do so since Richmond in 1999.
Much of the surrounding acreage is now owned by other enterprises co-owned by Jason Whittingham and Colin Goldring.
Begbies Traynor, the administrators appointed to handle the club’s WRFC Trading Ltd wing, will continue to handle that phase of the process.
However, all contracts for players, backroom staff, administrative personnel, and the women’s squad that play under the University of Worcester Warriors brand have been effectively cancelled.
Some employees are still due 35% of their August salary, while others were not paid at all, and no one was paid in September.