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Battle for control

Thursday, 6th March, 2014

By By Darrin Manuel

Musicians’ Club administrator Robert Brennan has withstood a challenge to his position and has vowed to try and restore the club to its former glory.

 

Mr Brennan was appointed to right the club’s finances after it went into voluntary administration last month.

 

At a creditors meeting yesterday Mr Brennan faced opposition from national insolvency firm BRI Ferrier’s Peter Krejci, who stood as an alternative administrator at the request of some creditors and members.

 

Mr Brennan faced numerous questions about his suitability as the club’s administrator given he himself is a creditor with $4750 owed to him.

 

Conversely, Mr Krejci was keen to point out that he has absolutely no ties to the club, and could provide a completely unbiased and impartial approach.

A ballot was taken with creditors voting 36 to 25 in favour of sticking with Mr Brennan.

Some members of the audience were unhappy with the process, however, as creditors were required to sign their name to their vote.

Several people said that staff who are owed money would be reluctant to vote against the administrator as they could be victimised in future.

Mr Brennan said the ballot could not be anonymous under the Corporations Act, as the value of each creditor’s vote was weighted against how much money they were owed.

He also promised that no staff member would face a backlash for voting against him.

The creditors meeting was followed by a meeting with members, where Mr Brennan urged the club’s factions to forget past transgressions and work together.

“Everyone needs to commit to the survival of this club and overcome the differences we have had,” he said.

“We need this community to unite together to save the Musicians’ Club.”

Mr Brennan revealed that the club was insolvent and has liabilities totalling $3.5 million, including around $750,000 owed to ANZ bank.

The club lost around $2 million in the last 20 months, with a $200,000 loss in the last quarter alone.

Despite the dire financial picture, Mr Brennan said he would fight for a ‘deed of company arrangement’, which would - with the blessing of creditors - allow the club to keep trading and repay its debts at a later date.

The only other options are liquidation or handing the club wholesale back to the control of the board - neither of which are likely to appeal to members.

Other items to come out of the meeting:

* The directors are now completely powerless - the club is entirely under the control of Mr Brennan, who will receive $350 an hour for his services.

* No board members may discipline staff or members for their work or conduct.

 

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