Rebels last-ditch bid to avoid liquidation

The Melbourne Rebels board is making a desperate bid to save the club, which owes more than $20 million in debt.

The Melbourne Rebels board is making a desperate bid to save the club, seeking an extra 120 days to arrange a debt deal to avoid it almost certainly going into liquidation. Picture: Getty Images

The Melbourne Rebels board is making a desperate bid to save the club, seeking an extra 120 days to arrange a debt deal to avoid it almost certainly going into liquidation.

Rugby Australia’s legal team has been approached for the time extension, but the governing body has already signalled the club’s current entity will crumble under the weight of more than $20 million debt.

An administrators report was expected to come out early next week, with the Rebels playing their first game of the Super Rugby season at AAMI Park in Melbourne on Friday night.

Any delay would allow more time for the Rebels’ board to mount a claim against Rugby Australia, which it has claimed owed up to $8 million of the club’s debt.

But creditors, including Rugby Australia and the Australian Taxation Office, which was owed $11.6 million, would have to agree to an extension.

Vaiolini Ekuasi in action for the Rebels. (Photo by Daniel Pockett/Getty Images)

Rugby Australia has taken over the Rebels licence.

Administrators made all staff redundant last week, which leaves the liability for redundancy payments with the club.

Some staff were rehired but others, including chief executive Baden Stephenson were let go.

Rugby Australia confirmed the redundancies last week, encouraging staff made redundant to apply for a Federal Government backed bailout scheme.

“Affected staff members (including those offered contracts by Rugby Australia) will be able to claim a redundancy package via the government’s Fair Entitlements Guarantee (FEG) scheme,” the statement said.

The FEG scheme only kicks in when a company has been put into liquidation.

“If the employer has not entered bankruptcy or liquidation FEG payments are not available — you should contact the Fair Work

Lukhan Salakaia-Loto at Gosch's Paddock in Melbourne. (Photo by Daniel Pockett/Getty Images)

Ombudsman in relation to the employer’s refusal to pay your entitlements,” the Department of Employment and Workplace Relations states.

The FEG scheme was set up in 2001 following a number of high profile company crashes.

Parts suppliers relied heavily on the scheme during the collapse of Australia’s car industry.

Any delay in going into liquidation means former employees will have to wait months for their payouts.

Rugby Australia’s public statements point to a grim future for the Rebels’ beyond the 2024 season.

The governing body has an $80m loan with Pacific Equity Partners, with at least $50 million drawn down so far.

There are questions about whether it can continue to support five Super Rugby teams in Australia.

Rugby Australia’s public statements point to a grim future for the Rebels’ beyond the 2024 season. Picture: Getty Images

The Waratahs have already been taken over by Rugby Australia.

The ACT Brumbies have rejected reports of concerns about the club’s finances.

The Twiggy Forrest backed Western Force remains a strong club, with some rugby insiders suggesting that the league could drop to three Australian teams next year, including the Waratahs and Queensland Reds.

A fixture shake up to allow more rounds to be played could cover off any loss of games to meet its broadcast deal with Stan Sport.

However, it was possible that the Rebels licence could return under a different corporate entity next season.