ORFU flush to pay creditors

When asked whether the union would consider repaying some creditors who lost money when the deal was agreed to save the union from liquidation, Union chairman Doug Harvie said that would not happen.

### ODT Online Fri, 14 Mar 2014
Profit pleases ORFU
By Steve Hepburn
The Otago Rugby Football Union has recorded a $406,800 profit, just over two years after it faced going out of business because of debts of more than $2 million.
The union now has reserves of more than $500,000, and is predicting a small profit for the coming year. […] In March 2012, the union was a few days away from going out of business, with debts of $2.2 million and creditors failing to come to agreement. But a rescue package was nailed down and the union traded its way out of difficulty, albeit with some concessions from creditors.
Read more

****

Correspondence received.

From: Bev Butler
To: Doug Harvie [ORFU]
CC: Steve Hepburn [ODT]
Subject: ORFU board responsible for paying the black tie dinner bill
Date: Fri, 14 Mar 2014 07:31:59 +1300

Friday 14th March 2014

Dear Doug

In today’s ODT the ORFU have reported a profit of $406,859 for the 2013 financial year and a profit of $134,656 for the 2012 financial year. Part of this so called profit is just pocketing of monies from unpaid bills.

As you are fully aware, the ORFU ran up a DVML bill of $25,352 for their black tie fund raiser at the stadium on 5th August 2011. This was for food, booze, soft drinks and cleaning.

Not only did the ORFU run off without paying this bill but the ORFU paid no venue hire for this brand new venue. Then to top it off the ORFU pocketed $52,000 from this fundraising event into their ‘pot’ which then is reported as profit for the 2012 financial year.

The fact that the ORFU then pressurised the Council to ‘write it off’ does not excuse the ORFU from the moral obligation to pay this bill.

I was quoted in the ODT as saying this was ‘obscene’. It is like booking a large restaurant, gorging yourselves on all their food and drink and hospitality then doing a runner.

It is ‘obscene’ and I expect this bill to be paid in full.

Laurie Mains, and his wife, Anne-Marie, refused to answer questions as to whether Anne-Marie was paid for her services in organising this event. I actually have no problem with her charging for her professional services. What I do have a problem with is that it is standard practice for professional event organisers to ensure all outstanding bills are paid before the ‘surplus’ is paid to the organisation. This did not happen. I don’t know whether Anne-Marie was paid $10,000, $12,000 or even more but whatever the amount the issue is that the other bills should have been paid first.

I fully expect this bill to be paid as the ORFU did actually have sufficient funds to pay this bill as evidenced by the reported profit of $134,656 for the 2012 financial year.

I also remind you that the $350 [sic] guests to this black-tie dinner paid $250 per ticket which would have been paid with the understanding that this would cover the costs. When a function such as this is organised, the ticket price is to cover the costs of the meal, venue hire, cleaning etc. Once the bills are paid, then any surplus is genuine ‘profit’ and the organisation then can legally pocket this ‘profit’.

The fact that the ORFU pocketed this money instead of paying their bill is unacceptable.

It is time the ORFU did the decent thing and pay this bill.

Yours sincerely

Bev Butler

——————————

From: Doug Harvie [ORFU]
To: Bev Butler
CC: Steve Hepburn [ODT]
Subject: RE: ORFU board responsible for paying the black tie dinner bill
Date: Thu, 13 Mar 2014 20:16:32 +0000

You have your facts wrong Bev – ALL creditors of ORFU have been satisfied in full, in one way or another.

I will not be responding to any further correspondence on this matter.

D J Harvie
Partner

Harvie Green Wyatt
(P O Box 5740, Dunedin 9016, New Zealand. Phone +64 3 4775005 or +64 21 2234169. Fax +64 3 4775447

——————————

From: Bev Butler
To: Doug Harvie [ORFU]
CC: Steve Hepburn [ODT]
Subject: RE: ORFU board responsible for paying the black tie dinner bill
Date: Fri, 14 Mar 2014 09:43:19 +1300

Dear Doug

Saying that “ALL creditors have been satisfied in full, in one way or another” is not the same as saying that all creditors have been PAID in full.
I know it is uncomfortable for you to be reminded of this but it still does not excuse the ORFU from doing the decent thing and paying their obscene black-tie dinner given they already had the money but decided to pocket it instead.
How about showing some decency or goodwill towards those that bailed you out of your financial mess now that you are flush with $406,859 profit?

Yours sincerely
Bev Butler

[ends]

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Posted by Elizabeth Kerr

13 Comments

Filed under Business, DCC, Democracy, DVML, Economics, Events, Hot air, Media, Name, New Zealand, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums

13 responses to “ORFU flush to pay creditors

  1. Russell Garbutt

    There are arrogant sods and then on a much higher level is the ORFU. The sense of entitlement is simply jaw-dropping. “Go away Bev” and don’t make me feel guilty. Well Mr Harvie, you need to learn, just as others are now learning, that those with right on their side will never go away. Never.

  2. Hype O'Thermia

    It’s the 3rd generation beneficiary attitude of entitlement. Rugby has changed since the days when players had real jobs in the real world and had to make sacrifices to play at a high level. Those guys remained anchored to reality, they didn’t lose track of the idea that paying one’s way was important. Without it there was little respect and no reason to have self-respect, it was like being the guy who suddenly had to go home when it was his turn to shout.

  3. Ma Fia

    Clear as day that Doug wants to shut this down. Isn’t running off and not paying the bills from money gained from those who were enticed to attend TBTD and pocketting the money tantamount to theft?

  4. Rowena Davenport joins the ORFU Board. God help her. And they’ve also added (gosh) Ross Hanson from South Link Health !!

    Meanwhile Andrew Rooney says ORFU is now totally debt free, owing no money to NZRU or the banks… ”This is quite a good position for us to be in. I wonder how long it has been since the union has been sitting with no debt and money in the bank.”

    Rugby: Union in profit but spending to be kept reined in
    http://www.odt.co.nz/sport/rugby/295523/rugby-union-profit-spending-be-kept-reined

  5. Mr Rooney credited the incredible turn around to the hard work of staff, and that it was a long time since the ORFU had been debt free and on such a good footing. Brilliant! That’s what happens when you win the Ranfurly Shield (for a week) and have an ITM Cup semi-final. Very meritorious indeed. Strangely, there is a memory blank here between drinks, because I could have sworn that there was a small matter of a $2 million debt moved onto the citizens by a sleight of hand deal when the ORFU unloaded Carisbrook onto the city. Then of course, there was the small matter of the rate payers being stiffed for $480,000 owed to the city, plus about the same again to sundry creditors. The ORFU, instead of doing ‘high fives’ and congratulating themselves all round, should be hanging their heads in shame everytime they set foot in the Stadium. What? Don’t be daft, we’ve achieved exactly what we set out to do.

  6. Off to Wanaka then, to join Guest and others of his ilk…

    The financial meltdown of the Otago union a couple of years ago was tough to take, he said. No-one had seen it coming. […] People at the Dunedin City Council ultimately paid for a loose arrangement over the value of Carisbrook. –Adrian Read

    ### ODT Online Wed, 19 Mar 2014
    Rugby: Official helped see Otago through
    By Steve Hepburn
    After stepping down as president of the Otago Rugby Football Union on Monday night, Adrian Read has finished a rugby administration career that lasted nearly 40 years. Adrian Read has been at the coalface of Otago rugby for 20-plus years. Seen Bledisloe Cups won and Springbok heads attained, and watched the Highlanders host finals and then nearly head out the back door. From the Otago union having a staff of three, then 36, to then all but going bust.
    Read more

    No mention at all of the pokie rort to fund the Centre of Excellence for Amateur Sport (read Highlanders’ facility). Funny that.

  7. Mike

    Well there’s your problem – 3 employees to 36 but without enough income to pay them – maybe they should have gone back to the 3 before they built up millions in debt (<$2m to the bank and $2m to the DCC paid off in the first ratepayers’ bailout, and then another $480k to the DCC and another bunch to the bank paid off in the second ratepayers’ bailout).

    • Mike

      Actually I’m wrong here, memory fades – they owed the bank $4.9m before the Carisbrook bailout – of the $7m the city paid $4m went to the bank, $2m went to pay off the debt to the DCC, and $1m went to the secret trust.

      None of the money from Carisbrook actually went to the ORFU (depending on the true identity of the secret trust, of course).

      • Bev Butler

        Mike, there was also a secret report many years before the 2009 date that you mentioned which clearly showed the serious financial situation of NZ rugby. This report was commissioned by the NZRU and the ORFU’s financial position formed part of this report. Steve Tew, the NZRU and ORFU know what I’m talking about. Funny how contents of secret reports find their way to me.
        So, as you say, it is rather disingenious for the ORFU, to cry ignorance of their serious financial state.

        • Bev, It was spelt out loud and clear in the 2004 MWH Report commissioned (strangely enough) by the ORFU, to see what action was required to bring Carisbrook up to standard for hosting ‘A’ grade Tests. That was when Jim Harland and Peter Chin poked their noses in and decided that council should aid in a rescue. To this day, I reckon Harland and Chin were set up by the ‘wide boys’.

          {Cambridge Dictionaries Online: wide boy a man who is dishonest or who deceives people in the way he does business: Some of the younger property developers are real wide boys. -Eds}

  8. There’s the problem outlined right there. With all due respects, Adrian Read has toiled like a navvy all those years. And what is the result? A lot of camaraderie. Every club in every sport has that factor, why else do they exist? Camaraderie fits fine at the club level, only the very elite get to be mates with the other elite. The workhorses seldom scale the heights of elitism. Works fine in the amateur scene where it is all voluntary. But those same people seldom are business people, so you can see how the whole professional circus was set up to fail. The ‘wide boys’ in the NZRFU took the local mugs to the cleaners, and in Dunedin’s case, it was blest with a totally incompetent structure at the time and it went mad and broke. Would have stayed that way too, except there was an even madder bunch in the council employ, aided and abetted by equally, or madder elected mayor and council.
    In all, a freak meeting of a perfect storm. We all know how it turned out.

  9. Hype O'Thermia

    Have you noticed how many of the people who get cleaned out by Nigerian scam are to all appearances well-educated, sophisticated, “too smart to fall for that nonsense”? It’s something that has astonished me over the years I’ve been using a computer: people’s vulnerability to a well-spun “vision”.

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