Big debt sudden shock for Nelson Suburban Club
The Nelson Suburban Club has discovered a $300,000 debt and sent a begging letter to its 4800 members but is in no danger of shutting down, board chairman Ross Strawbridge said today.
He said there had been "no skulduggery" and there was no police involvement after the board became aware of what it owed.
The letter went out on September 4, telling members of the Tahunanui Drive club that it faced a $200,000 tax bill and owed $100,000 to other creditors.
It invoiced each member $100 asking for a one-off donation and offering a chance to win two $2000 travel vouchers, and also sought investment in a VIP scheme allowing the pre-payment of future subscriptions.
It also informed them that one member had donated more than $128,000 towards the IRD debt.
"The full extent of the club's total indebtedness had not been disclosed to the board in the monthly management reports," the letter said.
The board had undertaken to repay all its major creditors by September 30.
"We must emphasise, with the measures the board has put in place, the club will trade profitably. This has already occurred through cost-cutting initiatives and increased usage by members."
The letter said the 2013-14 budgets presented to the club's bank clearly showed it would generate surpluses in the coming year.
"However, the support of members is paramount in achieving this. We cannot emphasise enough the importance of all members making a contribution by September 30."
This morning Mr Strawbridge, an accountant, said since the letter went out 50 people had made donations and there had been "a good response" to the VIP scheme. Other members had indicated they were willing to help.
"The members are solidly behind the club and will assist at this time."
The club's manager for the past 18 months, Neil Ross, was on leave and a stand-in was in place, Mr Strawbridge said.
He said the club, the biggest in the region, had a peak membership of around 6500 but with renewals beginning on August 1, the current total was about 4800. Since 2009 it has also been the home of the Nelson RSA.
A multi-million dollar expansion was undertaken in 2005. Asked if this was related to the club's present difficulties, Mr Strawbridge said money was borrowed to fund the building programme, "I won't say any more than that."
He was attending a meeting related to the debts this morning, he said.
"No money was missing, there's been no skulduggery at all."
- © Fairfax NZ News