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Rugby Australia statement: Melbourne Rebels' administration

Rebels' Darby Lancaster in action on April 13 (Photo by Josh Chadwick/Getty Images)

Rugby Australia have issued a statement after the administrator for the financially stricken Melbourne Rebels recommended creditors accept a proposed deal to save the club, adding it may have been trading while insolvent for the last five years.

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The Rebels went into voluntary administration in January with Rugby Australia taking over their competition licence and covering player and staff payments until the end of this season.

RA is still working through a decision on whether to wind it up, but PwC administrator Stephen Longley has recommended in a report that creditors accept a proposal from directors to save the club, who this weekend play away at the Crusaders.

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Nemani Nadolo on his peak and once being considered “too big”

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Nemani Nadolo on his peak and once being considered “too big”

Former Fijian winger Nemani Nadolo chats to Liam Heagney about when he reached his peak and how he was actually at one stage considered too big to play rugby.

Rebels directors have proposed a deed of company arrangement (DOCA) which would guarantee employees 100 per cent of their entitlements, but leave unsecured creditors with as little as 15 cents to the dollar. The deal will be put to creditors, which includes RA, at a meeting on May 3.

A statement read: “Rugby Australia acknowledges the findings of the administrator’s report regarding Melbourne Rebels Rugby Union Pty Ltd issued to the company’s creditors.

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“RA continues to solely fund and operate the Melbourne Rebels Club and its teams to ensure participation in the 2024 competitions. We have done so since the company was placed into voluntary administration by its former board of directors in January.

“For clarity, RA remains a creditor of the MRRU. We also welcome the positive news that MRRU employees are to receive full payment of their entitlements under the proposed deed of company arrangement.

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“RA notes the public statement made by the former directors of MRRU in response to the administrator’s report. The administrator has not made comment on the strength of the claims of the former directors of MRRU and has attributed no value to those claims.

“The administrator’s report suggests that MRRU and its former directors have been trading whilst insolvent since at least 2018. Given the seriousness of the conduct of the MRRU directors, the administrator has made a report to ASIC.

“RA notes section 7.2 of the report specifically states that MRRU’s financial difficulties are not due to RA’s lack of funding, but rather MRRU’s trading losses, lack of alternative funding, excessive costs and insufficient non-RA revenues.

“RA has complied with all its contractual obligations to MRRU. This includes the payment of all funding (which is subject to an agreement signed under authority by two MRRU directors on behalf of the MRRU board) and also paying all applicable PAYG amounts to MRRU, who misused these funds and did not pay them to the ATO, which was the intended purpose.

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“RA maintains that the true financial state of MRRU has not been disclosed to RA for some time – it was only once the company defaulted on its payment plan with the ATO last December that RA was made aware of the full state of the MRRU situation.

“In addition, RA has not been advised by the former MRRU directors that they are subject to director penalty notices from the ATO. Despite multiple requests from RA, the MRRU directors have failed to provide any viable proposal or business plan regarding the future of the Melbourne Rebels.

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“Contrary to the former directors’ statement, RA met with the former directors at their request in March to discuss a potential resolution. Despite RA’s request for a proposal, no fully-formed proposal was provided by the group.

“RA remains committed to rugby in Victoria, and will continue to actively consult with relevant stakeholders, as well as our legal and financial advisors regarding next steps. We will confirm our position on the future of the Melbourne Rebels Club in due course.”

After releasing its report in midweek, Longley said the directors’ deal was preferable to liquidation given litigation costs could leave creditors with as little as nine cents. “I’m of the view that the likely return to creditors under the proposed deed will provide a materially better outcome for creditors than a winding up,” it wrote.

The club’s liabilities were detailed in the report, with unsecured creditors and related parties claiming nearly $22million out of total claims of more than $23m. The unsecured creditors include the Australian Taxation Office, which is claiming more than $11m, and the Melbourne and Olympic Parks Trust ($1.14m) which runs the Rebels’ home ground, AAMI Park.

The report revealed in the last three calendar years, the Rebels incurred operating losses of $5.7m (2023), $5.3m (2022) and $5m (2021).

“My preliminary view is that the company may have traded whilst insolvent from December 31, 2018, and that it is likely that all debts that remain unpaid were incurred which could result in an insolvent trading claim exceeding $16.8m,” Longley concluded in its report.

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2 Comments
N
Nickers 369 days ago

Farcical, to what end would someone want to pay to keep this thing going.

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JW 3 hours ago
How 'misunderstood' Rassie Erasmus is rolling back the clock

The All Blacks have definitely exchanged physicality for their running rugby, tiring teams out in the last 10 minutes type approach, over the last decade.


Hell they were the ones getting tired in South Africa last year.


Previously, we had always had to get ourselves pumped up to match the SB. Our forwards would need to punch above their weight. There’s been no such feeling or talk like that for a decade. We’re happy that we can go toe to toe all day everyday now. I suggest Ireland still need to do that though.


Yes I’m not familiar with those games, or the way you’d played them, you and Graham were discussing, but I’d say the players I’ve seen recently certainly do have those capabilities (to outplay/skill NZ or France). Really though I think we both acknowledging the same thing, the capaticity to play multiple ways, because you have the most well rounded player types.


So I fully endorse unlocking that further. Ireland became a tricky bunch for sure. You may not have heard me champion their play when it first started coming out, by I credited them/Lancaster, as encompasing a lot of the great backline/phase play trickery I’d become accustomed to naturally seeing, through evolution, from all ages in New Zealand. He put a plan together about how/when to cut/when to loop/when to skip. Players I grew up with, well even myself of course, we just did those things based on what we see, and Lancaster put that together as a package for people who don’t.. have such DNA, or ‘IP’. I’ve not seen any other team do it with such precision, or make it look so natural as they did. They’ve lost it now of course (as had NZ already), but my point would be that you can also do you’re own thing. For instance you could go to grubbers instead of territory kicks, low fast guys, even the tall lanky Fassi’ are supreme at reading and catching a bouncing ball. Simply by not going to your lineout strength, you can put immense attacking pressure through space and speed for example. Brown got the use of those athletes going in the wide channels, while still looking for say someone who was as good as Kieran Read to really unlock that threat. But anyway, maybe I misconstrued what you wanted the team to do, but I just think there are, as youve said about the past, ways SA can play. I wouldn’t be worried about anything too fancy, but yes, they say defence wins match’s but really that’s just because attack is the hardest thing to get right. So if you can get it right, yes, you do almost become unbeatable. Like I said I couldn’t see going as far as to play like a “Brazil” being a “trick” to get over the mental barrier of expectation, not with SA’s psyche. In tsaying that though I’m thinking to myself, in terms of clamming up in big games, Irelands playbook approach would be better than instinct. That’s because you need that ‘brazilian’ to play on instinct, and I think the game means too much to us for that, and maybe that’s how Ireland was able to keep up it’s threat in those big games, all everyone simply had to do with stick the playbook.


Even without winning WCs NZ has been able to feel like it was still on top, and playing with some audacious flair, as in just backing yourself to beat these two players in front of me that results in a breakdown field which wins you the game, requires that sort of knowledge that you are the best, that level of confidence. That’s an advantage NZ has had to keep that style going over the decades. The acid test has come on, there is a desire their from from Razor to regain it, now to be able to play that way when doubts set in.

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Connor Nicolas 4 hours ago
'Individuals are stepping up': Vern Cotter on Beauden Barrett's influence

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Connor Nicolas 5 hours ago
'Individuals are stepping up': Vern Cotter on Beauden Barrett's influence

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Charles Brown 5 hours ago
Does a crowd have the right to boo their team if they're not being entertained?

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