At a special meeting held at the weekend, RSA members voted overwhelmingly to purchase the Crows' defaulted $375,000 mortgage on its former premises in Devon St East. The club plans to sell the high- value property, pay its many creditors and move into new premises at the Pukekura Raceway with a clean slate.
However, Steve Crow says the executive's plan will leave the RSA further in the red than ever.
The Auckland porn baron and his brother David became involved in the RSA in 2008 when they bought the clubrooms for $1.9 million.
To do so, they took out two mortgages, one of $375,000 from a finance company and a second of $1.525m provided as vendor finance by the RSA itself.
Although the brothers' initial aim was to help the struggling organisation, the relationship quickly broke down, culminating in the club walking out of the clubrooms in February.
A court case to solve the problems had been set down for August, then put off while the parties negotiated.
Those negotiations had already fallen over by Saturday, however, with the RSA executive telling the 158 gathered members that ridding the club of the Crows was the best way forward.
"If we buy that first mortgage it will put us in a very strong position," welfare chairman Reg Trowern said.
Mr Trowern said the RSA would take out a loan to buy the $375,000 mortgage, held by finance company PMIT.
"If we own that mortgage I am confident we could then get the title to the land."
If the RSA executive's plan works out, it will use the money from the sale of its clubrooms to first pay back wages owing to its former employees, then the money it owes its creditors, including the Crows, and then the $738,000 it owes its own welfare arm.
It will then set up a new company with a clean slate and move into a renovated clubrooms in the Tuson stand at the Taranaki Raceway.
During the meeting, Steve Crow accused the executive of misleading the members with its figures.
In turn, the meeting's chairman warned Mr Crow about speaking on behalf of his company 435 Devon, as he has been banned from directing or managing any company for four years.
Mr Crow's figures showed that after the club had paid real estate agents, rates, legal fees, the welfare arm and its creditors, it would be $522,000 in the red. Those figures were based on a valuation of $1.2m.
"We have no objection to them selling the building but the wealth just isn't there that they think it is," Mr Crow said.
"And that's why they want to make a new company, to escape their creditors."
Mr Crow said the club owed he and his brother $318,000.
"And we are not going to take a financial bath from this so they need to know there is a lawsuit if they don't sort something out."
Mr Crow said he had wanted to warn the members about the perils of their impending decision, but because of the way the meeting was run he wasn't given a chance.
He is now threatening to lay a complaint with the Companies Office about the meeting.
Despite Mr Crow's misgivings the RSA members voted 139-16 in favour of buying the mortgage, then 146-11 in favour of selling the clubrooms.
RSA spokesman Steve Bone said it was the first step towards starting afresh.
"It will be a long proceeding but one that will end in the RSA owning its own clubrooms and putting the past behind us," he said. "We are going to honour our creditors no matter what the Crows say."
The club will now begin the legal proceedings into buying the mortgage and continue working with the Taranaki Thoroughbred Racing Club on plans for renovating the Tuson stand.
In the meantime, the racing club has offered its premises as a meeting place for members.
source: http://www.stuff.co.nz
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