The bitter fallout from the Western Force’s axing has hit a new low with RugbyWA forced into voluntary administration because it can’t pay Rugby Australia’s legal costs.
RugbyWA claims it simply hasn’t the cash to settle the bill.
It also owes $1.14 million to the WA government for the 2009 upgrade of nib Stadium as well as an unspecified amount to law firm Lavan.
But it’s RA (formerly the ARU)’s pursuit of legal costs stemming from the arbitration and Supreme Court fights with the Western Force that have brought RugbyWA to its knees after the national body won both battles.
It’s believed RA’s total legal fees associated with axing the Super Rugby franchise are about $1.7 million of which RA is said to want RugbyWA to pay about $900,00.
RugbyWA, funded largely by billionaire miner Andrew Forrest, offered RA about $500,000 to settle.
However that’s been rejected and with subsequent negotiations breaking down, RugbyWA has taken the drastic step of calling in advisory and investment firm KordaMentha Restructuring.
Despite the dramatic turn of events, it’s highly unlikely RugbyWA will fold.
KordaMentha administrator Scott Langdon hopes to raise enough capital to hand back control to the RugbyWA board before Christmas and will meet creditors, including RA, within the next fortnight.
After that, the firm will have about a month to raise enough money and renegotiate a settlement figure for the costs.
In the unlikely event RugbyWA still can’t meet its debts, it will become extinct.
“If those proposals are not acceptable to creditors, then there is a potential chance that we could wind up rugby in Western Australia,” Langdon said.
“But the sole purpose of the voluntary administration process is to rehabilitate and reconstruct the balance sheet so we provide a platform for the future.”
RugbyWA chairman Tony Howarth says RA knew all along RugbyWA wasn’t in a position to pay the legal costs.
“I think they’re very aware of what they’re doing,” he said.
“In our mind they’ve been quite purposeful in what they’re doing. They were certainly very purposeful in removing the Western Force.
“Some feel it’s been an abandonment of rugby in WA.”
RugbyWA’s woes come at an awkward time for Forrest, who is trying to negotiate with RA about approving his new competition – the Indo Pacific Rugby Championship.
GusTee
Roar Pro
Fionn - The ARU's financial mess arises from writing off the significant funds it loaned to the Rebels et al.
jack
Roar Rookie
For an Australian Rugby union supporter TWAS, you seem to be hell bent on protecting some but smashing others - I have to ask, why are you so one sided? Surely even you can see that large amounts of money pumped into one franchise that was owned by a private entity is a weird arrangement - why aren't you concerned about that? You ask who the ownership entity was that bought the Rebels, well it was a complex web of companies owned by Mr Cox, and one of his companies , in NZ was facing technical insolvency at the exact time that Mr Clarke and the ARU goons were supposed to have done a due diligence, when even blind Freddie could see that this company had limited assets and lots of liabilities - like you, Mr Clyne, the banker, did not seem to take issue with that - why those creditors continued to supply to him is another question, but facts are facts - why are you such a supporter of that transaction and question every one who is not a supporter of it?
ScottD
Guest
Yes. The contract does have a dispute resolution clause and the ARU publicly stated that they were insisting it be used to resolve the dispute
ScottD
Guest
Actions speak louder than words
Bakkies
Guest
Don't forget that it is confidential
Train Without A Station
Roar Guru
And in this situation they've specifically stated that isn't their intent.
Train Without A Station
Roar Guru
The point of the senate isn't to do the court's job. It's to address flaws in the system. A few cases of guilt on the banks would be reasons to look at legislative changes.
Train Without A Station
Roar Guru
Is that was the agreement says?
Train Without A Station
Roar Guru
Not in the senate's...
scottd
Guest
TWAS, yet again you show your lack of understanding of the facts. The contract between ARU/RWA had a disputes resolution clause. It would not be uncommon that in a contract between a parent body and its member organisation that each party would be responsible for their own costs in resolving the dispute. In addition to that it was the ARU that insisted that RWA abide by the contract and utilise the dispute resolution clause. So no, for the costs related to the initial mediation I would have expected both sides to wear their own costs and to split the cost of the external mediator. As I stated, the subsequent legal appeal to the courts is a different matter.
scottd
Guest
They can join the new WA rugby to form the new Australian Rugby Union Association.
scottd
Guest
Agreed. Which means that now RA will take what they are given and it won't by even close to the $500k that RWA offered them. In fact it might be $0
scottd
Guest
Dave, in a normal commercial situation I would probably agree with you but I don't think anyone on this site would have expected the national union to pursue such substantial costs that the member union would go into administration. Maybe I am just silly but I wouldn't think that this action is in the best interest of the national game overall
scottd
Guest
Rubbish again TWAS. RA don't own the game and anyone can set up a rugby competition and have it not affiliated to the ARU/RA or even to any of the state unions.
scottd
Guest
Total rubbish TWAS. The ARU/RA doesn't own rugby. If the WA clubs decide they don't want to be affiliated to the ARU/RA then that is their decision to make.
scottd
Guest
don't back track now mate, your previous post referenced fraud which is a criminal offence..
Ex force fan
Guest
Clyne didn't explicitly deny that they exist but tried to avoid answering the question. On form in my opinion he confirmed them by carefully avoiding a direct answer.
Ex force fan
Guest
Yes, in the long run I am confident that the ARU will realise how foolish it was to alienate your fastest growing state from your sport. The TWAS will again argue it is the previous management's fault not the current management...
Ex force fan
Guest
Without an income generating asset WA RUGBY would anyway not meet its obligation in 2018 and would have ended up in administration. The ethos of rugby is to play fair and never ever give up. Wa rugby did it, ARU not.
Ex force fan
Guest
He does not want to understand - it is clear enough.