Events that led to the decision to close Hero’s Hill
No one likes to see a club, like Hero’s Hill close, particularly at a time when the Clubs’ Industry is rapidly consolidating. On an average approximately 5 to 10 clubs seek amalgamation each month. Bankstown Sports believes in the survival of clubs and will do what it can to assist smaller clubs. Our track record of Baulkham Hills Sports, Bankstown Bowls and Birrong Sports bears testimony to this.
The CEO and Board of Directors of Hero’s Hill approached Bankstown Sports Club in June 2012, seeking an amalgamation, because Hero’s Hill was in serious financial difficulty and amalgamation was the only solution to help continue operating.
When Bankstown Sports had independent auditors inspect the books and assets of Hero’s Hill, the advice was not good. It clearly stated that Bankstown Sports Club would risk its members’ funds, and the trading losses were expected to continue. The Board of Directors and Executive Management of Bankstown Sports are accountable to its members, so the offer to amalgamate was respectfully declined.
To the best of our knowledge, Hero’s Hill approached 28 other clubs, all of whom respectively declined an offer to amalgamate. Some of them did conduct a due diligence, using independent auditors.
In January 2013, I was approached again by the CEO and Board of Hero’s Hill because the club had reached a state of acute financial stress. The club’s mortgage to an independent lending group, in South Australia, was due and it was evident that the mortgage company could immediately appoint an administrator to help recover their money. If this happened, there was no guarantee that creditors and most important of all, staff entitlements would be honoured.
Through this process, several members of the Hero’s Hill Board had supported their club with personal interest free loans, but now the Board came to a careful and considered decision that Hero’s Hill must inevitably cease operations. Having made this decision, the CEO and Board approached Bankstown Sports with a request that we meet the following conditions:
- Help Hero’s Hill cease operations with dignity.
- Clear all their debts.
- Honour the entitlements of all their dedicated staff and we offer them jobs.
By agreeing to these terms, the mortgage company actually extended their period of financing by four months.
Following an agreement with Bankstown Sports, Hero’s Hill appointed the services of Chambers Fleming Professionals Padstow Real Estate, for the Hero’s Hill land and buildings to go up for Auction with the proceeds of the sale going towards the payment of their debt that is estimated to be between $2.5 m and $3.0 m. Bankstown Sports will not directly benefit financially from this unfortunate event of Hero’s Hill closing as it is envisaged that revenues from asset sales will be substantially less than the total of all debts. Bankstown Sports Club will benefit from the transfer of the 43 poker machine entitlements to Bankstown Sports Bowls and Birrong Sports Club.
It would be difficult to ask any company in this current economic climate to take on another business that is estimated to sustain substantial trading losses with no certainty of ever turning that business around. When a company approaches another with the long traditions and history that Hero’s Hill has, seeking help to close the club with dignity ensuring all of their staff are provide jobs, and their creditors be paid in full, then we were compelled to act.
Mark Condi
Chief Executive Officer
Bankstown District Sports Club
