Administrators for the Melbourne Rebels have green lit a rescue deal to save the Super Rugby club, amid revelations the club had been insolvent since 2018.
The deal, put forward by Rebels directors, is dependent on successful litigation against Rugby Australia and the Australian Taxation Office releasing the directors from their personal liability over the club’s $11.5 million in tax debts.
Filipo Daugunu of the Rebels celebrates a try during the round two Super Rugby Pacific match.Credit: Rugby Australia
Administrators have agreed to accept the proposal put forward by the Rebels’ directors given its promises are a return of 100 cents in the dollar to employees, and for unsecured creditors to receive between 15 and 30 cents in the dollar.
The club owes creditors $23 million.
The excluded creditors are the directors, their entities – owed collectively $6 million – and the tax office.
The plan also includes the Rebels directors funding litigation against Rugby Australia to obtain back the club’s licence which it was stripped of following the club’s entry into administration.
The directors allege Rugby Australia and its directors deliberately withheld the full revenue share for sponsorship and broadcast deals.
Rebels director Georgia Widdup said Rugby Australia had refused to meet with the group to discuss the proposal, and their legal action against the peak body was “well advanced”.
“As the administrator’s report makes clear, the Melbourne Rebels were heavily reliant on distributions from Rugby Australia. Unfortunately, RA made a range of representations to us over many years regarding funding that it would provide. We relied on these representations, but RA did not honour these commitments,” Widdup said.
Creditors will vote at the next meeting on whether to support the deal or wind up the company.
The administrator from PwC, Stephen Longley, found that the Rebels had been insolvent since 2018.
If creditors chose to vote for liquidation instead of the proposed deal, it could pave the way for a costly litigation for the club’s directors.
Rugby Australia had previously outlined its support for the club to enter liquidation. RA has been contacted for comment.
More to come
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