Melbourne Rebels win vote to continue fight for survival at creditors meeting

The peak body acknowledged the outcome in a statement on Friday night, adding: “RA is pleased that the Rebels’ employees will receive 100 per cent of their entitlements.

“RA will continue with its evaluation of the viability of any future business models for the Melbourne Rebels, and engagement with the relevant stakeholders in this process.”

Two sources, who attended the 2pm meeting on Friday but declined to be named for professional reasons, said the administrator had the deciding vote after the creditor vote was tied on the consortium deal.

The sources added the Australian Taxation Office had voted against the proposal.

Notes taken of the meeting by the sources reveal ATO representative Craig Moreland explained the tax office rejected the proposal as there was no legislative basis to waive the Rebels’ directors from the $11.6 million tax debt the directors are personally liable for.

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Moreland added there would be a benefit for a liquidator to investigate the claim made in the administrator’s report that the Rebels had been trading insolvent from at least 2018.

The meeting occurred just hours before the team was scheduled to host the Blues in a Super Rugby match at AAMI Park on Friday night.

The first-stage distributions to employees and unrelated unsecured creditors are equivalent to $4.28 million. The directors of the Rebels have also agreed to fund the administrators $741,000 for their work in running the club.

The consortium is also planning to raise a further $15 million to $25 million to propel the club into 2025 and beyond.

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Under the deal, employees will receive a return of 100¢ in the dollar, and unsecured creditors will receive between 15¢ and 30¢ in the dollar. The range of the payout will depend on whether the directors are successful in their planned legal claim against Rugby Australia over alleged underfunding of the club.

The Rebels’ consortium must jump two hurdles before it can retain control of the company: Rugby Australia handing back the licence for the Super Rugby competition, and the Australian Taxation Office releasing the directors from their personal liability over the club’s $11.6 million in tax debts.

The group has 30 days to negotiate with the sport’s peak body and the tax office. If unsuccessful, the consortium will then have 60 days – or a date approved by the administrators – to commence legal proceedings to wrangle back the licence.

If they’re still unable to claim back the licence, or be released from their director penalty notice, the deal will collapse, and the consortium will no longer have any claim to the company.

However, there is a clause that allows the consortium to waive either of these conditions.

Widdup said the directors were still in discussions with the tax office and expected there would be more talks in the near future.

“There is still a lot of work to do, but with the vote out of the way and a lot of community and government goodwill behind the club, we can finally get excited about what the future holds, and we urge Rugby Australia to support rugby in Victoria.”

Relations between the directors of the club and Rugby Australia remain frayed despite the parties resuming meetings this week ahead of the meeting. Last week, Rugby Australia accused Melbourne Rebels’ directors of misusing tax funds forwarded by the national body amid revelations the Super Rugby club had been trading while insolvent from at least 2018.

In regards to Rugby Australia’s view, Widdup said on Friday: “I think they can say what they want to say. I guess what we’re keeping our focus on is keeping the team alive in Victoria. And we’ve certainly achieved that today. At least we’re a step forward anyway.”