Neath survived a winding-up petition at a court hearing in Cardiff on Thursday but the future of Wales’ oldest club remains uncertain after a judgment that was greeted with dismay by supporters.

Neath were sued for £31,000 by a company that loaned the club money earlier this year to help it meet its wage bill but Judge Andrew Keyser, sitting at Cardiff civil justice centre, said it was not liable for the sum.

The judge described Neath, who are bottom of the Welsh Premiership after winning only one of their first 13 matches, as insolvent but found that the loan was taken out by another company run by its director, Mike Cuddy, rather than Neath Rugby Limited.

The Breakdown | Neath’s sad decline laid bare as they face judgment day in court | Paul Rees Read more

Cuddy’s demolition business collapsed earlier this year as he was kept in hospital for six months because of illness.

He has vowed to remain in charge at the Gnoll and rebuild the club, even if it means dropping down the divisions, having put more than £500,000 into the club over the years.

Neath won a record seventh Premiership title in 2010 but they have largely struggled since then. Fans were hoping the winding-up petition succeeded so they could take over the club and start again.

“This is not the result we wanted,” said Dawn Williams, the vice-chair of the Neath Supporters’ Club. “Strong management is needed going forward and we had investors waiting to come in and help run the club but they will not get involved under the current structure.

“My understanding is that it will be business as usual but I am not aware if the club’s bank accounts have been unfrozen. The current owner doesn’t mind if Neath have to fight their way back up from the third division but until the Welsh Rugby Union has its input, we do not know what will happen.”

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Neath, who had to postpone their match at Bedwas last weekend because they could not raise a team, are due to entertain Llanelli on Friday night.

Williams said her club had been told there were concerns over player insurance and the ground’s safety certificate.