TITANS boss Michael Searle stands to be liable as a result of the club's financial woes after it emerged he personally guaranteed the bank loan at the centre of the debt that threatens to bring the club down.
In another development, the
Herald understands that the Titans football club is also a guarantor on the loan, made by the Commonwealth Bank for the building of the Centre of Excellence facility next to Skilled Park.
The Titans' property arm owes the bank $15 million - a huge share of their total debt of at least $25m. It is believed Searle, the Titans' managing director and majority owner, personally guaranteed the loan for about $10 million.
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He hopes to sell the Centre of Excellence and said yesterday he had two expressions of interest to buy it. But if the bank were to call in the guarantees, he and the football club could be ruined.
The Titans have just weeks to find a way out of their perilous financial position after the Federal Court in Brisbane was told the club's property division was ''
prima facie insolvent''.
In a potentially critical blow to the club, Reed Constructions, which completed work on the contentious Centre of Excellence facility at Robina, was given the green light to begin bankruptcy proceedings next month.
Lawyers for Reed were successful in their bid to continue the actions started by the Tax Office, and will return to court on April 20 with a view to liquidating the trust, Gold Coast Titans (Property) Pty Ltd.
The property arm is a separate entity to the football business but in a damning assessment of the Titans' financial state, the accountants hired by the ARL Commission, McGrathNicol, reported this week at least $25 million of debt was deeply intertwined with the football club and could bring it down.
This effectively gives the Titans less than 30 days' grace as Reed tries to recoup $943,858 in construction costs plus more than $100,000 in interest, as well as legal costs.
The club has no choice but to hold a fire sale for the Centre of Excellence and another asset, the Titanium Bar in Surfers Paradise.
If they fail by April 20, administrators will be called in to liquidate the asset on behalf of creditors. ''In relation to the property arm, we will consider all options to sell the asset in a managed and transparent process with our bankers. We have received two formal expressions of interests to date which we are considering,'' Searle said.
In court, Justice John Reeves found in favour of the construction firm, ruling it could begin efforts to have the property arm wound up.
Titans lawyer Ashley Tiplady maintained the property division and the football division of the club were clearly divided, although an audit from ARL Commission accountants suggested the rugby league business had been bleeding cash towards the property arm and was also incurring debts.
Searle said the football club was operating $2.5 million short due to poor home crowds and the cost of the building dispute but was forecast to record a profit this year. The Titans' other major backer is a company run by the father and uncle of the club's football manager, Scott Clark. Robert Clark and Phil Ward are directors of Handling Solutions, which is owed more than $5 million.
Clark snr, a former director of accountancy firm Searle Sessarago Financial Performance, a business in which Searle was the founding partner, confirmed to the
Herald he was in discussions with the Titans about how to resolve the debt.
ARLC chief executive David Gallop said he had told players' union boss David Garnsey yesterday players would be paid whatever the outcome. ''We wish to see a viable club at the Titans,'' Gallop said.
