Directors of the now-defunct Melbourne Rebels rugby club have launched a legal battle against Rugby Australia, seeking $30 million (R355m) in damages for the club’s closure.
According to a report from Sydney Morning HeraldThe case, filed in federal court, also calls for control of the club to be returned to its directors so the Rebels can continue to compete in Super Rugby Pacific.
Rugby Australia closed down the Rebels in May after mediation attempts failed, leaving the club’s creditors owed A$23 million, including A$11.5 million to the Australian Taxation Office (ATO). Directors have been warned by the ATO that they could be held personally liable for the debt, which has become a key issue in the legal dispute.
A private equity consortium led by Leigh Clifford, the father of Rebels director Georgia Widdup, proposed a rescue plan that would see a A$30 million injection into the club, but Rugby Australia rejected the plan.
This led the Rebels’ director to accuse Rugby Australia of unfairly favoring other clubs, particularly the NSW Waratahs, in its financial management decisions.
In a strongly worded statement, Rebel directors expressed their distrust of Rugby Australia, claiming it had breached corporate law and failed to treat all member clubs equally. They claim Rugby Australia has a legal obligation to reimburse directors for tax debts and other debts incurred while Rebels players were part of the Rugby Australia team.
The directors are also demanding access to Rugby Australia’s financial records to investigate whether the union breached its fiduciary duties. They claim Rugby Australia has misused its assets over excessive spending at the 2023 Rugby World Cup.
Rugby Australia has yet to respond to the claims but acknowledged it would review the claims before commenting further.
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