The Melbourne Rebels have found a potential lifeline through a proposed deal put forward by directors.
Facing the spectre of insolvency stretching back years, the team’s future hangs in the balance as creditors weigh the offered terms.
Following the Rebels’ voluntary administration earlier this year, administrators have shed light on the club’s precarious financial state, suggesting the Super Rugby club may have been insolvent since 2018.
Directors have tabled a Deed of Company Arrangement (DOCA), aiming to salvage the team’s operations while ensuring employee entitlements.
However, the proposed agreement comes with a stark reality for unsecured creditors, who may only recoup a fraction of their claims. Administrators have cautioned against the alternative of liquidation, citing potentially dire consequences and heightened litigation costs that could further erode creditors’ returns.
Key stakeholders, including the Australian Taxation Office and the Melbourne and Olympic Parks Trust, are among the creditors seeking redress, underscoring the size of the Rebels’ financial obligations which is reported to be nearly AUD $24 million.
Rugby Australia (RA) has refrained from committing to the Rebels beyond the current season, pending consultations with relevant parties. Despite the uncertainty, the Rebels find themselves in a successful Super Rugby campaign.
The proposed deal is set for creditor deliberation in early May.
