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Rob Hamlin: The ORFU’s small creditors: If I was one of them…

This post received today from Rob Hamlin was first submitted to the Otago Daily Times for publication at The Analyst blog. The newspaper’s suggested edits are shown in italics.

The conduct of the ORFU over the last couple of years has left a legacy of some 180 small creditors owed some 680,000 dollars. These traders now face a difficult situation, which the recent activities of various well placed worthies have done little to alleviate. These traders now have to make simultaneous decisions on two major matters rather than one. They have to decide whether to pursue their debts. But they also have to make up their minds whether they will continue to trade with the undead but still insolvent ORFU ‘zombie’ organisation that these worthies have rescued from an imminent, thoroughly justifiable and necessary corporate execution and autopsy process. It is most unusual for an organisation of this size, in such an apparently ruinous financial state and with such a poor track record of settling its debts over such an extended period of time to survive a crisis such as this. The fact that this is not a private limited company, but is an incorporated society takes us into completely new and unknown territory.

By a mixture of vague promises and third party support, the ORFU appears to have extricated itself from around three quarters of its multi-million dollar debt on consistent terms of a cash return of zero cents on the dollar. In all cases, except possibly the bank, they also seem to have secured agreements that trade, and presumably credit will continue to be furnished to the ORFU on established or even enhanced terms by these creditor organisations.

A pattern has thus been established and it would be a reasonable presumption on the part of any of the remaining creditors that similar terms in both of these areas will be sought from them on a case by case basis when contact with the ORFU is established by each individual creditor, as the ORFU clearly desires. No general creditor meetings have been called. Only a rather cheeky request via the media appears to have been issued inviting these creditors to get in touch with the ORFU’s accountants individually – presumably if and when they feel that they need to.

Some commentators on the ODT website have noted that I am a specialist in food marketing, and have invited me to consider the supply and demand of pies within the rugby stadia of this town. The food industry is a brutal one, in which not getting paid is an ever present danger, and I therefore spend a good deal of my time teaching and advising on such matters. Their suggestion is therefore an excellent one, and I will discuss the first of these two issues – debt recovery from the ORFU, not from the point of view of an academic, but what the hypothetical owner of ‘The Pied Piemaker™’ Ltd (get it?) might do if they were owed some $12,000 by the ORFU. Continue reading

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