The administrator for the financially stricken melbourne Rebels has recommended creditors accept a proposed deal to save the club, adding it may have been trading while insolvent for the last five years.
The Rebels went into voluntary administration in January with Rugby Australia (RA) taking over their competition licence and covering player and staff payments until the end of this season.
RA is still working through a decision on whether to wind it up, but PwC administrator Stephen Longley has recommended in a report released on Wednesday that creditors accept a proposal from directors to save the club.
Rebels directors have proposed a deed of company arrangement (DOCA) which would guarantee employees 100 percent of their entitlements, but leave unsecured creditors with as little as 15 cents to the dollar.
Longley said the directors’ deal was preferable to liquidation given litigation costs could leave creditors with as little as nine cents.
“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,” Longley wrote.
The club’s liabilities were detailed in the report, with unsecured creditors and related parties claiming nearly $22 million…
