Embattled Gold Coast chief Michael Searle has dismissed claims his debt-stricken NRL club is on the brink.
A Federal Court in Brisbane ruled on Friday that a major construction company could begin wind-up proceedings against the organisation’s property arm next month.
The club, which has run up record debts in excess of $30 million, could find themselves on death row next month unless they can prove their solvency within 30 days, with the debt intertwined with the football club.
It’s believed the Titans football club had given some financial guarantees to the Centre of Excellent which could impact on them should the property arm goes bust.
However, Searle said in a statement on Friday that two formal expressions of interest have been made for the club’s $20m centre of excellence at Robina, which is at the centre of the legal action.
Searle re-iterated earlier claims that the football club is facing a current cash flow shortfall of $2.5m, but is projecting a profit in 2012.
He said the club have been in discussion with the ARLC about funding to ensure its longevity and sustainability.
“We are confident that with the full support of the Commission we will ensure the Titans remain a viable and competitive force in the NRL for many years to come,” Searle said.
Justice John Reeves on Friday ruled in favour of Reed Constructions, who claim to be owed $1.46 million, replacing the Australian Taxation Office as the plaintiff in the bankruptcy action after the ATO withdrew last Friday.
While expressing extreme concerns at the depth of the club’s debts, ARLC chief executive David Gallop said Friday’s Federal Court outcome had not changed the club’s perilous situation.
That would change dramatically with the possibility the ARLC may yet be forced to step in and financially bail out the Titans should next month’s liquidation proceedings be successful.
While Searle’s investments have put the future of the club at risk club chief executives have private concerns he’s shuffling the Titans’ deck chairs as they flounder financially.
Even the NRL which sent financial auditors north this week amid rumours the Titans were sinking fast, have been caught off guard by the magnitude of debts run up by the property arm.
An alarmed NRL club boss told AAP during the week the Titans were “on life support waiting to die”.
Other chief executives contacted were deeply concerned if the Titans folded it would be a really “bad look” for rugby league at a time when it was talking boldly about expanding its game.
Queensland rugby league icons Wally Lewis and Mal Meninga were united in their calls this week to the Commission not to allow the Titans go the same way as the ill-fated Seagulls, Giants and Chargers before them.
Lewis played 34 games for the Gold Coast and also made his coaching debut with the club.
He said everything possible had to be done to rescue the Titans.
“Can you imagine what the AFL will do if the Titans fold?,” warned Lewis.
“They have to survive.”
Meninga though was confident the Commission would intervene.
“I’m pretty sure they (the commission) will be in the trenches with the Titans when it’s crunch time, so I would imagine they don’t want them to not succeed,” Meninga said.