Salford Red Devils have been deducted three wins by the Rugby Football League for failing to meet the terms of a financial commitment agreed in 2013.
The club entered into a company voluntary arrangement (CVA) in 2013 with a new company, Salford City Reds (2013), applying for RFL membership.
Should the terms of the CVA not be met, the RFL said it would dock six points.
On 22 October a certificate of non-compliance was issued by an insolvency practitioner, leading to the sanction.
As this season is being decided on a win percentage basis because of the impact of the coronavirus pandemic on the 2020 schedule, the club have been deducted three wins instead of six points.
An RFL statement said a condition of the January 2013 membership application was that the club fund the CVA of the old company, Salford Football Club (1914) Limited.
“The ‘insolvency event’ does not relate to Salford City Reds (2013) Limited and does not impact any of that company’s debtor or creditor relationships,” the statement added.
It is currently unclear what financial breach has constituted the insolvency event which led to the punishment.
The punishment for such a breach was extended from six to 12 points in an update of RFL insolvency rules in 2015, however the legacy punishment now applies with immediate effect.
The sanction means that Ian Watson’s side drop from eighth to 10th in the Super League table and no longer have an outside chance of qualifying for the play-offs, as they can no longer finish seventh.
Earlier on Tuesday, the regular Super League season was curtailed with the play-offs brought forward to begin next week after Hull KR said they could not complete the season because of an outbreak of Covid-19.
Prior to their punishment, Salford could have reached the play-offs by finishing seventh and waiting on standby if a top-six team stated they would be unable to compete in the end-of-season competition.