Rebels' administrators push rescue deal for embattled Super club

MELBOURNE :Administrators for the Melbourne Rebels have recommended that creditors accept a deal put forward by directors to save the debt-ridden Super Rugby Pacific team and said the club may have been trading while insolvent for the last five years.

The Rebels went into voluntary administration in January and while Rugby Australia (RA) stepped in to prop up the team until the end of the season the governing body has declined to guarantee its future beyond 2024.

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.

Administrators said the directors' proposal was preferable to liquidation given that litigation costs could leave creditors worse off.

"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," administrator Stephen Longley said in his report.

The report detailed the extent of the Rebels' liabilities, with unsecured creditors and related parties claiming nearly A$22 million ($14.32 million) out of total claims of more than A$23 million.

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

The administrators said the Rebels were potentially trading while insolvent as far back as Dec. 31, 2018, and had a history of trading losses exacerbated by the impact of COVID-19 in 2020 and a reduction in annual distributions from RA.

Liquidation could open up the directors to insolvent trading claims.

Administrators