MELBOURNE (Reuters) – Rugby Australia (RA) said on Thursday it is preparing a legal counter-claim against directors of the defunct Melbourne Rebels who are suing the governing body over the demise of the Super Rugby club.
The directors lodged a claim at Australia’s Federal Court on Wednesday and are seeking A$30 million ($20.20 million) in damages from RA.
RA rejected a rescue deal in May for the indebted club which was shuttered at the end of the season in June.
RA said it rejected the directors’ “ambit claims” and “attempts to shift blame for their financial mismanagement”.
“RA is preparing a counterclaim against MRRU and its directors for misleading and deceptive conduct concerning the financial position of MRRU dating back to 2018,” the governing body said in a statement.
“Had RA not been misled or deceived, it would not have provided MRRU with a participation licence and thus not lost in excess of A$35 million that was paid to MRRU since at least 1 July 2018.”
The Rebels directors did not provide immediate comment when contacted by Reuters.
The Rebels went into voluntary administration in January with debts of over A$20 million.
RA stepped in to fund the Rebels’ operations, including paying player and staff wages, to ensure the team could play out the season.
The Rebels’s administrator said the club’s directors may have traded while insolvent from Dec. 31, 2018, but recommended creditors accept a deal put forward by directors to save the debt-ridden Super Rugby Pacific team.
Creditors accepted the deal but RA rejected it, saying it was not sufficiently viable.
($1 = 1.4850 Australian dollars)
(Reporting by Ian Ransom in Melbourne; Editing by Michael Perry)
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