Administrators give Melbourne Rebels rescue plan the green light, with Rebels insolvent since 2018

In that report, Stephen Longley, the administrator from PwC, found that the Rebels had been insolvent since 2018.

“I consider it reasonable considering the date of insolvency is over five years prior to my appointment to assume that the majority, if not all, of the debt that remains unpaid would have been incurred after the date of insolvency. Accordingly, an insolvent trading claim against the directors could exceed $16.8m,” Longley wrote.

He also said in his report that his “preliminary investigations have not identified any offences committed by the directors other than failing to prevent the company from incurring debts whilst insolvent”.

The excluded creditors are the directors, their entities – owed collectively $6 million – and the tax office.

The plan to salvage the club also includes the Rebels directors funding litigation against Rugby Australia to regain the club’s licence which it was stripped of following the club’s entry into administration.

Creditors will vote at the next meeting on May 3 on whether to support the deal or wind up the company.

The directors allege RA and its directors deliberately withheld the full revenue share for sponsorship and broadcast deals.

Longley said he needed further time to assess the merit of all the directors’ claims against RA.

The administrator included in the report a table that showed that even if the Rebels had received the amount from RA the directors claim it was owed in 2021, 2022 and 2023, the company would have still been trading while insolvent.

Rebels director Georgia Widdup said Rugby Australia had refused to discuss their proposal, despite invitations, and that their legal action against the peak body was “well advanced”.

“As the administrator’s report makes clear, the Melbourne Rebels were heavily reliant on distributions from Rugby Australia. Unfortunately, RA made a range of representations to us over many years regarding funding that it would provide. We relied on these representations, but RA did not honour these commitments,” Widdup said.

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Rugby Australia had previously outlined its support for the club to enter liquidation. RA has been contacted for comment.

According to the report, in December 2021, the Rebels provided RA with its financial accounts and working capital. Directors also expected new funding to be provided by RA following a meeting in October last year.

“[The Rebels were] heavily reliant on RA to provide financial contributions to generate sufficient funds to keep trading,” Longley wrote in the report.

Between the 2021-23 financial years, funding from RA accounted for 60 per cent, 63 per cent, and 52 per cent of the club’s income, respectively.