Otago Rugby Union gets one-week reprieve

UPDATE Friday 5.15pm: The NZFU has agreed to give the struggling Otago Ruby Football Union another week to stitch together a recovery package.

The ORFU had been due to be liquidated by the High Court at 4pm today if it could not resolve its financial crisis.

NZFU chief executive Steve Tue told media, "The key parties have been talking since Monday and have identified some options that warrant further examination. It makes sense for the union to delay proceedings to allow these parties more time to undertake proper analysis."

Those taking part in the crisis talks include the NZRU, Dunedin City Council, Dunedin Venues Management, major lender BNZ and the NZ Rugby Players Association.

Asked what had changed since the start of the week, Mr Tew could not detail any specific developments. 

But the NZRFU boss did offer that that "the actual rather than potential threat of liquidation" had focussed discussions.

Otago Rugby Union faces liquidation Friday

Tues Feb 28: The Otago Rugby Football Union (ORFU) will apply to the High Court for liquidation 4pm Friday if it can't resolve a cash crunch that has left it with $2.35 million negative equity.

At a joint media conference last night, ORFU chairman Wayne Graham and NZ Rugby Union chief Steve Tew said the club owed $750,000 million to "trade creditors in the community."

The ORFU has just posted a $862,000 loss, and revealed it received $200,000 in interim funding fromthe NZRU over the past two months.

For the past month, "We have worked very hard alongside the Otago board to try and find a solution, but that hasn't been possible. Where we are, that's the reality ... there will be some people who feel very poorly affected by this," Mr Tew said.

Despite the ORFU receiving a $6 million windfall from the sale of its old Carisbrook stadium to the Dunedin Council in 2009, the NZFU has been subsidising Otago to the tune of around $900,000 a year.

"We've made the call that we can't keep putting New Zealand [Rugby Union] money in," the NZFU boss said.

"It's not just about Otago, it's about the 26 unions in total. We need to face up to the fact that this organisation is debt laden and cannot trade."

Mr Graham added, ''The position got to a stage where we had to draw a line in the sand, and that if by 4pm Friday - unless the current situation can be resolved by all the parties involved - we have no option but to apply for liquidation from the High Court."

Mr Tew stressed the liquidation did not effect the Highlanders Super Rugby franchise, which is a separate legal entity (and subject of an earlier NZ Rugby Union bailout).

The NZFU boss said Otago could still play in the ITM provincial championship "if the community can bridge this gap over the next few days or the next two weeks."

The New Zealand Rugby Union chief executive appeared to be implying that Dunedin ratepayers - already nursing debts for the city's new covered stadium - should also take the ailing ORFU under their wing.

Mr Graham said "an accumulation of factors" had caused the 126-year-old ORFU's problems over the past few years.