‘Sold us out’: Fury erupts after inner west cultural club sold to developer

One of Sydney’s oldest cultural clubs is without a home after its inner west land was “sold from underneath members” to a developer to clear $20 million in debt amid factional infighting and protests.

The Cyprus Community of NSW club in Stanmore was this week sold for $55 million by EY administrator Morgan Kelly to property firm Conquest, to the outrage of some members.

Members of The Cyprus Club protest outside the Stanmore venue. Credit: Wolter Peeters

The administrator says this is the only way to return the company to solvency, but a deeply divided membership, distrustful of the administrative process, fears for the future after their home of almost 40 years was sold.

On Tuesday evening, the administration team arrived at a member information night at the Stanmore club to find a handful of members staging a protest, complete with signs reading “sack EY”.

Kelly and his colleagues faced an increasingly hostile and vocal crowd when he announced the worst fears of many – that he had sold the club’s land.

Shouts erupted from the crowd of angry members. “You’ve sold the club from under us,” one member shouted. Some hurled personal insults at Kelly.

The Cyprus Community of NSW Club in Stanmore has been sold by the administrator. Credit: Nick Moir

“You’ve sold us out,” one woman yelled.

The site covers nearly a hectare and includes the club’s buildings, a car park, six neighbouring houses and a large vacant block.

Members say they felt blindsided and don’t understand how the land could be sold off without their knowledge. In an FAQ document circulated in April, EY told members it intended to put a sale to a vote.

In his affidavit tendered to the NSW Supreme Court, Kelly concedes he had once told members that their club could not be sold without going to a vote – a view he now no longer holds.

Kelly, who at times had to pause his presentation while members shouted at him and each other, insisted he had the right as administrator to sell the land and was pursuing litigation in the courts to confirm that right.

“Given the ongoing disputation and breakdown in trust between certain ... members of the company, it is our view that even if a meeting were convened … the long-term difficulty in reaching a consensus is unlikely to be resolved and risks further delays or deadlocks in respect of any proposed sale,” his affidavit read.

This breakdown in trust stems from allegations of mismanagement made against the previous board by certain members – which is strenuously denied – and concern among some that the administration process has not been transparent.

When asked why the administrators had kept offers from interested buyers secret from the members, an EY representative claimed that “rumours” circulating were “scaring bidders”.

Angry members confronted the administrators at a meeting on Tuesday. Credit: Wolter Peeters

While many wanted a deal where a developer would deliver a new club along with a residential development at the Stanmore site, the administrators say this was not viable for developers.

The only way to make the club solvent is to sell and find a new home, Kelly argued.

Club to close as debts rise

In a notice sent to all members in May, EY determined the club’s level of debt exceeded $12 million in 2023 and rose to $16 million in 2024.

According to a preliminary investigation by EY, the club owed money to two lenders after taking out loans to pay previous debts, including mortgage lender Sydney Wyde, and Cyprus Capital, a company set up to raise funds from members of the Cyprus Community of NSW via shares.

Multiple court cases, including action from Cyprus Capital, racked up further debts.

To consolidate debts, the administrator took out a loan worth more than $17 million. That was used to pay off the existing loans and interest, and costs arising from Cyprus Capital’s appointment of receivers. Now debts are more than $20 million.

“While we can’t comment on the club’s financial position at this time, we believe the sale price, which was above various recent independent valuations, will recoup the club’s debts, enabling it to relocate to another suitable premises and ensure its ongoing operations to deliver important community services,” Kelly told the Herald.

The club’s restaurant, which used to serve tzatziki, halloumi and arni kleftiko, and the clubhouse will be forced to close by August 30 when an impending fire order from council comes into effect. The administrators say the club cannot afford to bring the building into compliance.

The club’s operations, including Greek school classes, dancing and other activities, will be spread across different venues in the inner west and south-west of Sydney until a new location can be found.

“The club’s items and equipment have 12 months to stay on this premises before they can be relocated to an alternative site. But because of the fire safety order, the clubhouse is no longer fit for purpose,” Kelly told members.

A community in tatters

“I feel shame we’ve come to this stage. I never thought this would happen to my beautiful club,” Ellie Stassi, 72, said after the explosive meeting.

In an impassioned speech to the members in Greek, which she later repeated in English to the Herald, Stassi questioned how the club would find a way forward when members were so divided.

Ellie Stassi gave an impassioned speech in Greek to members and the administrator Morgan Kelly. Credit: Wolter Peeters

Previous factional warfare between members, including members being expelled and a dissatisfaction with the previous board, looms over the club. When Kelly announced the previous board would be reinstated to facilitate a fresh election after the administration was over, the crowd erupted in anger.

Olga Constantine, whose late husband was once a solicitor for the club, took part in the protest against EY.

“I hope we get new blood on the board with expertise who can steer us forward and that we can find a club not too far from Stanmore,” she said. “How long that is going to take and how much money is going to go, I don’t know, and how the members are going to trust anything that is going on is another serious issue.”

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.