New deal to save the Rebels

The administrator for the financially stricken Melbourne Rebels has recommended creditors accept a proposed deal to save the club, adding it may have been trading while insolvent for the past five years.

The Rebels went into voluntary administration in January, with Rugby Australia (RA) 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.

Rebels directors have proposed a deed of company arrangement which would guarantee employees 100 per cent of their entitlements but leave unsecured creditors with as little as 15 cents to the dollar.

Longley said the directors’ deal was preferable to liquidation, given litigation costs could leave creditors with as little as nine cents.

“I am 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,” Longley wrote.

The club’s liabilities were detailed in the report, with unsecured creditors and related parties claiming nearly A$22 million out of total claims of more than A$23m.

The unsecured creditors include the Australian Taxation Office, which is claiming more than A$11m, and the Melbourne and Olympic Parks Trust (A$1.14m) which runs the Rebels’ home ground, AAMI Park.

The report shows in the last three calendar years, the Rebels incurred operating losses of A$5.7m (2023), A$5.3m (2022) and A$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 A$16.8m,” Longley concluded in the report.

The deal will be put to creditors, which includes RA, at a meeting on Friday.

While the directors alleged a shortfall in RA funding contributed to the club’s dire financial state, the governing body pointed to the report findings that pointed the blame elsewhere. —AAP