Purpose

The purpose of this blog is to provide some clarity and explanation to ARHS members and the public as to why what happened, happened. Nobody won. Everybody lost in the end. The members, an organisation they spent the better part of half a century building. The volunteers, an opportunity to contribute to a meaningful cause. The community, a valued attraction that held cherished memories. The employees, a job they loved and put everything on the line for. There was a lot of love, passion and dreams from everyone.
At the end of the day though, there needs to be some cold hard facts faced. Mistakes were made. Some of them can be attributed to inexperience, some of them were miscalculations. Some, in the opinion of many, may not have been mistakes. Certain facts are known but are yet to be disclosed to the world. It is hoped that they eventually will and people will be able to piece together what happened.
The ARHS was a small business at the end of the day. Every dollar that came in the door needed to be spent wisely to support the operation. In the end, this did not happen and where money went is something that has kept Deloitte’s forensic accountants busy since the commencement of the liquidation.

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A few questions

Theres been a lot going on of late. The liquidator released another tranche of documents to the court and conducted a Q and A session with the former ARHS membership. Both these events were interesting in the sense that a little bit more has been added to the picture and a couple of blogs are coming soon.

There has also been some correspondance in the form of some documents fowarded to the blog. These too add to the picture and beg a lot of questions. This one deals with the rumour that did the rounds of the Society’s volunteers in early 2016 that the rent on the CEOs house was being paid for by the Society.  

This screenshot shows an email from the CEO to the finance staff on the 3rd February 2016. In it, the CEO asks why rent hasn’t been paid and mentions an irate landlord. This raises a number questions but does largely confirm the rumour.

Why was the ARHS paying for a house for the CEO? It isnt unknown in big companies for a total package to be offered to entice people to take jobs, but the the CEO was already established in Canberra and the ARHS was certainly not a big company. 

So what do we know about the house? Given its a rental, its history can be found online (address provided by a former member):

https://www.realestate.com.au/property/7-grady-pl-jerrabomberra-nsw-2619

The date of November 2015 appears to line up with the email date and it shows a weekly rental of $850 a week. It is interesting to note that this is a rather large house at 4 bedrooms 3 bathrooms. The photos attached so quite a spacious living area rumpus room kitchen and backyard. In short, this is not a modest house.

To do the math, $850 a week for 12 months is roughly $45,000.00. 

Key question is raised here- Did the 2015 Council award the CEO an effective $45k raise at the same time it defaulted on a payment plan to the ATO?  

Returning to the email, more specifically, why is the subject line entitled ‘Sharons Pay’? Talking with ex volunteers and staff, the person in question is the wife of the CEO, who never held a position within the ARHS. Why would the CEO send an email to the treasurer, corporate services manager and bookeeper about house rental titled this way? From a members point of view, this looks quite suspect. 

6029 Sold

Following an announcement on a closed facebook group this morning, it appears that 6029 have been sold to two private individuals. No doubt the ex ARHS members would wish its new owners the best and hope to see 6029s working life continue.

Oddly, it had been rumoured that a  different consortium of interested parties had already indicated to ex-members it had almost secured the locomotive and was the preferred bidder from the EOI process.  Involved in this bid were the ex-ARHS CEO, who indicated to a number of ex-6029 restoration team members that haed been appointed by the head of a new 6029 trust (Named as the pre-2016 ARHS President) to begin mechanical assessments and rectification work. 

Why and how that bid fell through is something that will likely never be known, although given some of the personalities that appeared to be involved and their past activities with regard to the collapse of the Society, its not hard to draw a conclusion.

Also of interest is that the Liquidator is to hold an information session for the ARHS membership in the coming week. Emphasis has been put on the fact that its to be a Members Only meeting, so it will.be interesting to see if some of the findings from the liquidators audits of the accounts are revealed.

Management Defects

From the very beginning the Society was intended to be run by members for members.  A model constitution was adopted which provided for management by a council, comprising a president, vice president, secretary, treasurer and ordinary council members.  All these positions were filled via direct election from the ARHS membership and there were few stipulations on who was eligible to nominate.  This system worked well whilst the Society had a limited focus, ie establishing the initial operation of 6029, 3102 and cars and then securing a home for the, namely the nascent Canberra Railway Museum.  However, the bigger and more diverse the Society got, the more flaws in the model became evident.

Chief amongst them was that the 9 councillors, however dedicated, were still just volunteers.  Each could only give so much time to the Society and although they were nominated allocated areas, it was impossible for the council to manage the day to day business due to the time it took for decisions to be reached. Further complicating this was the fact that the line managers appointed within the Council did not necessarily have the skills or background in the area they were supposed to be managing.   This would have been mitigated to a certain degree if a open arrangement existed between council and the volunteers, but too often advice and requests for information coming from the ‘boots on the ground’ was ignored or dismissed, particularly in later years.

A further consequence of the diversification was that factional divisions began to appear, representing different interests and opinions regarding what the Society’qs strategic direction should be.  For example, those wishing to maintain an authentic nsw branchline experience in the form of the Michelago Railway found themselves at odds with those wishing to run weekend sleeping car tours.  The two interests were incompatible and thus the factions started competing for resources.   Driven by this competition, the Council became a forum for the ongoing debate and in some instances, was stacked with candidates to favour one activity over the other.  In this environment, passion took over from reason and sound business planning fell by the wayside.  Eventually, discouraged by infighting, one group would loose out and the Council would go through a period of relative calm and co-operation.

Even with calm seas, there was still a persistent shortage of resources available to feed every aspect of the ARHS operation.  This is best evidenced in the lack of material additions to the facilities at Canberra Railway Museum from its establishment in the 1980s to the present day. With the exception of the government funded shed (For loco 1210) erected in 2015,  few major improvements were carried out.  At the same time, volunteers and employees performed minor miracles in the primitive conditions which would have struggled to meet modern WHS standards.  A most recent example would be the replacement of 6029s coupling and connecting rod bearings.  Manufacturers recommendations are that replacement of the roller bearing assemblies are best performed in a clean workshop facility out of the weather.  Volunteers and employees instead completed this work partly in the rain and on a dirt floor as there was no other alternative.  Such intent and dedication speaks volumes for those involved but unfortunately show the lack of priority and direction of those in charge.

In latter years, after the formation of ESPEE some steps were taken towards an independent management structure using the senior employees as line managers with a general manager and latter a CEO oversighting and representing to the council.  Whilst this was a move in the right direction, it was compromised in two ways:

  • The council was still required to provide oversight to the activities and was still subject to the aforementioned divisions
  • The GM was appointed to the position without a competitive selection process to ensure that he was the best available and most suitable for the position

The latter was perhaps even more unwise as the appointed person was serving as President of the Society immediately prior.  Leaving aside potential conflicts of interest, the lack of a selection process was a ‘normal practise’, as previous employees had normally come from volunteer ranks, having ‘proved’ their value.  In one instance, a maintenance employee was transferred to manage the Society’s booking office. However, it did not allow for the possibility that there may have been a better qualified applicant out there, nor did it guard against employee\council conflict.  

All these factors eventually combined to form a ‘perfect storm’, as the difference between what the council and membership expected, what the CEO said and the reality of the situation on the ground diverged.

ESPEE

The formation of the ESPEE commercial operation was intended to provide the Society with a secured line of funding for capital projects. In theory, it was a sound decision as it made full use of the Society’s hard won accreditation, provided training opportunities for its volunteer and professional train crew and opened doors on the leasing of locomotives and rollingstock for Society operations.  In practise, it virtually condemned the Society to insolvency and placed the assets held in the Canberra Railway Museum trust at risk. This was primarily due to the lack of appropriate safeguards being applied in the setting up of ESPEE as there was no attempt by the ARHS Council or the management to keep ESPEE legally at arms length from the ARHS Heritage Operation and Canberra Railway Museum Trust and there was extensive cross pollination of staff, equipment and procedures as a result.
Even on an accounting level, the lines between commercial and heritage operations became blurred- No separate annual report was issued for ESPEE (Which was essentially just a brand name belonging to the ARHS) and it was not beyond the realms of possibility that items of expenditure and income were ‘confused’ between the operations. For instance, the annual reports showed that ESPEEs operating costs declined from $1.1 million in 2013-2014 to $642k in 2015\2016, whilst revenue remained steady. Some of this could be put down to one off establishment costs, however, given ESPEE launched into a full time contract at the end of the 2015 financial year (which in turn would have made it its busiest when combined with other train working) it seems odd to say the least that there would be such a decline. Compounding this, the entry for ‘tour sales’ (ie heritage operation expenses) more than doubled from $247k to over $500k. Again, on the surface it could be assumed that 6029s operations were responsible for such an increase until we take into account that all 6029s major tours took place post March 2016 (the end of the 2015\16 financial year).
Some of this could be swept aside whilst the business was making enough money to cover its costs, which it initially was. However, the short haul market was an increasingly crowded one, particularly during the quiet wheat seasons of 2014\2015\2016 where major operators had crews and motive power to spare for short term contracts of the like that ESPEE traditionally picked up and ESPEE subsequently saw a steep decline in this kind of work from mid 2015 onwards. The long term scrap train contract went some way to alleviating this; however, issues with the loading site hampered consolidation efforts. It has also since been established that there was a conflict of interest between the ARHS\ESPEE CEO and the company that ran the scrap train, with the former being a shareholder and beneficiary in the latter until a relationship breakdown. Whether this ultimately contributed to the resulting termination of the contract is unknown but it would seem logical that it played a part. The termination of the contract effectively ended ESPEEs ability to fund itself, let alone provide the money needed to meet the Heritage fleets growing need, and yet no ‘line in the sand’ (a defined point where the commercial business had to be wound down before it started to drain the Society’s reserves) had been established in its setting up, presumably for the same reason no attempt was made to legally make it a separate entity- The Society Council\Management apparently didn’t foresee or accept that it could ever fail. Thus from January 2016, the ESPEE operation was being supported by the Heritage operations, something that it could never sustain (ESPEE directly employing one full time Operations Manager and supposidly providing the money to fund a full time Safety\Accreditation manager and Heritage Operations manager).
Recognition of this from the ‘new’ council was slow in coming and may have had something to do with the appointed Treasurer, whose full time employment was with one of ESPEEs major customers\partners. On these grounds, this appointment can be seen as a mistake for a Council looking to get away from such conflicts of interest (which had plagued both the former CEO and also the President, who sat on the board of another heritage operator). Conflicts of interest are relevant whether they are perceived or real. In this case, the person representing members financial interests was also involved with the accounts division of a customer and was the immediate supervisor of ARHS’s accounts staff. Not a good look, particularly when the customer also relied on the ARHS’s accreditation to operate under. Due to the treasurer previously occupying the board level role and securing good deals on insurance for the Society, there was a certain amount of trust invested in him by the membership and it is hoped that that trust was not misplaced.
In the end, the action to wind up ESPEE occurred too late, with less than a month between this action and the appointment of the liquidator. The making redundant of ESPEEs operations manager was also a painful (but necessary) hit to the Society’s small cash reserves but it appears that the Council had to decide between bleeding to death or accepting a potentially non-fatal wound, an unenviable choice. It could be speculated that if that line in the sand existed and action taken earlier, the Society may have survived the demise of ESPEE, but only just.

What is going on?

Out of blue, today saw the publication of an article on the RIOTAct website regarding the ongoing ARHS Liquidation- https://the-riotact.com/heritage-trains-may-be-back-on-track-by-years-end/218987. The unusual thing is that this appears to have been iniated from the Liquidators end as it extensively quotes Mr Senatore and no other parties.
The immediate standout is the statement “He did not see any need for further sell-offs, meaning significant assets such as the prized Beyer-Garratt 6029 locomotive, were safe and would remain part of the heritage rail fleet.”
Anyone following from the rail sector would know that a Tender by EOI went out on 6029 more than a month ago (https://www.slatteryauctions.com.au/product/709/885022/slattery-tenders/1953-beyer-garrett-ad-60-class-4-8-4-4-8-4-articulated-steam-locomotive) and it closed a little over 2 weeks ago. A preferred tenderer has yet been announced, although as the blog noted last week there were at least 2 interested parties (THNSW and a private consortium linked with the former ARHS CEO, a cause for concern given his past involvement). The silence since the EOI closed is interesting in itself- Included in the EOI document was the term “The locomotive needs to be collected by 4pm Friday 29th September 2017”, so three conclusions could be drawn- 1, the preferred tenderer was THNSW (No need to collect the locomotive), 2, There was no preferred tenderer and the locomotive remains with the ARHS Trust or 3, there have been complications with the sale to another tenderer, delaying an announcement.
Conclusion 1 could probably be ruled out- If THNSW was the preferred tenderer, they would be unlikely to still be silent on such a significant acquisition. Reading the news article today gives credence to conclusion 2, but then why put it to an EOI in the first place? So it seems Conclusion 3 is the likely scenario by elimination but then today’s new article doesn’t make sense, unless it was written over a month ago.
Leaving all that aside, the liquidator then discusses the potential models for the future structure of a revived ARHS which is well and good but none of this has actually been communicated to the ARHS membership before it went to press. In fact this appears to be the most info offered up by the liquidator full stop on where the Society might be heading. It’s unfortunate that it wasn’t passed to the members first.
Also unfortunate is that it doesn’t give details on finance. Restarting the Museum is going to take money- even to register a new organisation and trust, so there needs to be money in the bank from the get go.
Structure wise, it seems wise to keep the trust separate from the operation arm but at least one arm will need outside assistance in terms of experienced personnel as there are simply not enough volunteers with the ability to form part of a start up operations management team, especially one as damaged and fractured as the ARHS. It is also simplistic to assume operations could be back up and running by year’s end. A vast amount of work waits in the areas of site OH&S compliance, infrastructure at the CRM, accreditation\crew retraining, business and product planning and indeed investment in the assets themselves. This also takes money, probably in the region of $500,000 plus before it gets to a stage where it can start supporting itself again, so the question of where this money is coming from needs to be addressed. It has been made clear that it isn’t coming from the Government, so private investment seems to be the only other option as that kind of capital cannot be raised from within the former ARHS Membership. This leaves some sort of private investment, which could be risky as those investing may want a return on said investment, putting a new organisation into a form of debt from the start.
At least one ‘group’ has been undertaking to look into models etc but it’s still out for judgement as to whether they are on the right track or aware of the enormous task ahead. Driven by the former ARHS Secretary now Private Citizen and involving the national trust amongst others, they have focused primarily on how the renewed Society should be governed. This is a necessary step but whether there is the depth of experience in term of actual rail operations is questionable. The National Trust deals almost exclusively with properties and gardens. Moveable heritage, such as those in the Canberra Railway Museum trust require a different set of rules to allow them to operate. This is partly the reason Transport Heritage NSW exists out of the restructure of the NSW Governments Rail Heritage Assets- No other organisation, government or otherwise, was equipped to deal with them. Even Sydney trains maintain its own Heritage Division that takes primary responsibility for the Heritage Buildings under its care with its own standards. It also appears that they are focussed more on a future National Transport Museum then just a restarted operation of ARHS ACT. This vision is fine but already it could be said that mistakes are being re-trodden by looking to the far paddock before the backyard is secure. It should be noted that as yet the Liquidator has not indicated who will be appointed to the new trust from its inception which means much of this effort might have been expended for nothing more than good advice.
Aside from this, not much else is known publically about other ‘groups’ intentions. The friends group has quietly disappeared from public view since the Auction and next to nothing has been heard from the last Council who are presumably still in contact with the liquidator and support the proposals put forward.
As a quick aside, there has been some interesting correspondence come the blogs way and we’ve been looking into figures in our ongoing effort to understand why the ARHS collapsed. Suffice it to say, it doesn’t look very good for some people who have put their interests ahead of the Society’s. More to come.

Leopards Spots

Theres been little news of note lately.  The Auction ended up raising in the region of $500,000 which would have surprised many. This is despite some last minute theatrics from the friends group and some of its ‘backers’. Track machines previously housed at the trolley sheds at Queanbeyan also found new homes.
Unfortunately it appears that this amount was still not enough to overcome the combined debt and costs as an EOI tender process was initiated for locomotive 6029. From the scuttlebutt, there were a number of tenders submitted, including one from Transport Heritage NSW. What is interesting about this is that the former CEO of the ARHS ACT, who is now employed by THNSW, has been confirmed as being involved in a bid from a private equity group which had also purchased a number of Southern Aurora carriages at the Auction.

One wonders how THNSW feels about an employee actively assisting a competing bid and whether he disclosed this before the fact.
The disappointing thing is that all this sounds more than a little familiar as its not the first time the individual has been involved in a professional conflict of interest. (See https://arhsliquidation.wordpress.com/2017/06/27/an-interesting-email/). One also wonders how the former ARHS ACT volunteers and members feel about this person again being involved with former ARHS ACT assets. With loco 3016 still at Thirlmere on extended loan and operating the loop line services there also exists the potential that they may also see him operating that locomotive.
It would be hoped that THNSW would be alert to the sensitivities of the situation, ie that ARHS volunteers have not had an opportunity to remain involved with assets they have funded and maintained for years whilst an individual who may have contributed materially to the Society’s current regrettable situation does.

Leaving all that aside, there is little else to report. Various ‘committees’ have been convened by parties to put forward their case to become the trustee of the remaining assets should a restart be feasible but none of those presented could be described as compelling or sound. There has been nothing official from Deloitte either so the waiting continues.

Pulling Together

The latest update from the Friends group appeared over the weekend. As you’d expect, there was a fair amount of space dedicated to the approach from Capital Holdings as well as the protestations over the inclusion of the End Platform cars in the Auction on August 2nd.

 
There is no questioning that the four cars that make up Set 52 are highly suited for operations on the Canberra branch. However, their condition is average to poor with issues identified with structure and integrity, this is the reason they were withdrawn from Society service in the first place. It is not impossible that the cars could be refurbished, however, repairs of this scale and nature have not been attempted in the preservation era and there would be few around today that retain the know how ex Railway to do it. This also makes for a difficult job in convincing the Network owners and the regulator that they would be safe to operate once repairs have been affected. It is also worth noting that of the many other preserved examples around the state, there is just one end platform car in operation. It travels up and down a private siding (Maybe 10kms a day) once a month. Even the far better resourced NSW Rail Museum no longer uses its 8 car set on the loop line, primarily due to the same concerns that forced the withdrawal of Set 52.

 
The other question mark lies over what would happen to the cars once retained. During their operational lives, the cars were housed in the long shed between trips. The Shed road is just long enough to fit the 4 cars plus the BVJ and BJ first class cars. Once the set was out of use however, increasing pressure required the shed to also function as a workshop, meaning the cars had to be parked outside. The CEO was given the task of arranging protection for the cars but like many other things, failed to follow through and they were exposed to the elements. So the question arises that if the Museum restarts, what will be the priority? Protecting the cars at the expense of having a work area close to the machine shop and other facilities? And if the cars are to be left outside, what resources are there to protect them from the elements, taking into account that there may be higher immediate priorities?

 
The rest of the document broadly follows what occurred at the recent meeting and it is the last personal comment that is of interest, essentially being a call for unity. There can be no disputing the value of a united front but sadly, in the case of the Friends, behind it lurks an agenda. If their interest was in a united front, it should have been so from the very beginning, ie not setting up a splinter group that excluded certain members, trying to do secret deals with the liquidator behind closed doors and challenging the liquidator legally at every step, adding to the total bill. The Society is still (as of this date) an entity in being and its membership remains intact until the liquidator takes the final step to wind up the business. Why then set up an association with a selective membership to contest control of the assets in Court?

 
There is also comment made about this blog being wasted energy. It is reiterated that this blog was set up to make sense of the question as to why the Society failed, as answers were not forthcoming and in the opinion of many of the membership, there were some dreadful decisions made stemming back a number of years. As to the decision to keep it anonymous, if the identity of the writer(s) was known, some members would instantly align it with one faction or another. The object is to have members question why, not dismiss it as up there because one person has an issue with another. It is also noted that no attempt has actually been made at contacting the writer(s), despite there being a contact function on the front page.

 
Fundamentally, you cannot move forward from an event such as this without examining what led you to this point to start with and an acknowledgement that mistakes were made and some degree responsibility accepted. Not doing so leaves the possibility that the same mistakes may be made again and an acceptance that the actions were correct.

Once this occurs, people may find that the Unity desired is much more forthcoming as some levels of trust may return between the divided members.

 

To make a fresh start, one thing is also abundantly clear- Whatever form a new organisation takes, is that it must not be managed by Volunteers, from board level down. Anyone who has served in a council position in the past 15 years should be automatically disqualified from any position beyond an advisory. This would be a bitter pill for some to swallow but it would ensure that any rifts in the membership, be they personal or professional, can never be allowed to interfere with the running of the business and end the cycle of ‘my way or the highway’ that had crippled the ARHS for many years.

A Presentation

The regular meeting last night at Eastlakes presented a new bidder for the ARHS ACTs assets. 2 business consultants made a pitch to those present that they were prepared to purchase the trust assets and establish a new foundation to keep them in. Ex-ARHS member involvement would be through an ‘operating entity’ although ultimately these investors would have the only say on the operation and business. They appear to have spoken with both the Liquidator and the head of the Friends Group (the former President from the 2015 Council), the available funds figure appeared to be in the region of $1 million.

This is an interesting turn. They appear to have been drawn in on the basis of the recent media attention but there was the impression that may not be aware exactly of the extent of ongoing costs once the assets were purchased and also that the notion may have been given to them that this was a walk in, start operating business. They were directors of the Capital Holdings Group, (http://capitalholdings.com.au/) a successful and diverse business with interest in property management, investment portfolios and debt financing so they are clearly not dills and have the cash to back the venture.

Disappointingly, they also choose to be somewhat disparaging of the liquidator, sticking to the Friends line that (Despite public statements to the contrary) the liquidator had no interest beyond selling the assets and making his own money. If there’s anyone they should be working with to establish feasibility, it’s the liquidator as he is the only one with access to the Societies financial records, something that would tell them the most as to whether the business has the potential to be profitable or not

A key line in their presentation was that any operation had to run at a profit and herein lies the main question- Can this business actually be run at a profit without ongoing financial support? The answer on that depends entirely on what kind of operation they have in mind and to determine that, they need to make their own independent assessment free of input from any of the members or former councillors. Why? Quite simply, because we are all biased in the opinion of what kind of operational business works and what doesn’t. If you ask 10 members what they think is the best operation there will be 10 different answers, ranging from steam operations locally to interstate Southern Aurora Sleeping Car trips as most arguments are based on passion and conviction and not hard facts.

It need also be remembered that purchasing the assets is the first step. Completing that does not mean the business is operation ready, despite what some people might think and say. Anyone restarting would need to take into account that further investment would need to be made in the site infrastructure, the stock itself, training and accreditation and so on.

In the media

There has been a lot of local media attention devoted to the ‘fire sale’ instigated by the Liquidator in recent days. The former Secretary of the Society (From the 2015-2016 Council) has been most active, giving interviews to local radio and now the local paper.
http://www.abc.net.au/news/2017-07-13/canberra-railway-museum-forced-to-sell-off-historic-trains/8704552
http://www.canberratimes.com.au/act-news/canberra-railway-museum-fire-sale-will-jeopardise-historical-artifacts-20170707-gx6hdl.html
Whilst the intention may be good, this has been approached in completely the wrong way. For starters, simply asking for people (General Public, Government or private industry) to stump up money is not fair for the simple fact that the person in question has put forward no workable plan or business case for what happens once the items are ‘saved’. This aspect is key to the future of the assets as without investment or purpose going forward, they might simply continue to rot where they sit and as dreadful as it might sound, some of the buyers may actually be in a position to look after them better than the Society ever could. A case in point is the End Platform cars. After many years of use, these were withdrawn from traffic due to the need for extensive mechanical and structural work to enable safe operation. The ARHS had neither the resources to accomplish that work, or to properly house\store them to prevent further deterioration. Hence, there was no option but to park them in the open where they have slowly deteriorated.
The question any investors would be asking is “What do I get back?”. In today’s world, a warm and fuzzy feeling as a return on a large financial investment is generally in the rhelms of only the richest of philanthropists. When you factor in the lack of structure, the now public split in the membership and the uncovered financial mismanagement of the past, you might as well set fire to the cash instead to save on your power bill.
Irresponsibly, the concerned citizen also bandied about the figure of $3m a year to operate the museum. Irresponsible because it is both incorrect and self-defeating. At its peak (in terms of employee numbers, commercial operations etc), the turnover of the ARHS did not reach this level. A properly managed, scaled down museum and local operation model would be lucky to touch a third of that. And how attractive is it to an investor if the investor knew that they would be facing addition bills of $3 million a year to cover costs, after the initial outlay to ‘save’ the assets?
It is unfortunate that this person is intent on blazing their own trail on this because they think that they are right, much like the Friends group did. Deloitte’s are now publically on the record saying “….the objective had been “to keep as much as possible open and operating”.
“To say we’re selling assets without regard to the heritage values is incorrect,” he said.
“We recognise it’s an important community organisation to maintain that and we’re trying to protect as much [stock] as possible, but we need to balance that with creditor’s rights.
“The prime assets have been quarantined, stock with greater historical significance.”
Ie they are working to keep whatever is practical and are working on a plan to restructure. Given that Deloitte’s is a world renowned outfit, it would be safe to assume that they are applying considerable expertise on this. It could also be reasonably safe to assume that they are consulting with Government and Industry as well to achieve as positive an outcome as possible.

At the end of the day though, it should be remembered why we are at this point- The business was not run well and could not pay its bills. Deloitte’s are correct in saying that the creditors must take priority- Some of these may be small businesses that rely on customers that pay their bills reliably as much as the Society did. Try telling a manager laying off staff that he is not going to receive a dollar he is owed because a carriage once carried a soldier to war and think about the flow on effects to that now redundant employee.
The Society was a business. It may have also been a charity but also remember that branches of one of the biggest charities in the Country, the RSL, is also in administration right at this moment. Being a charity does not exempt you from the rules of the game. If you mess up, there are consequences. The sale of these assets is the consequence.
Finally, make no mistake on this final point. Every ARHS Member, employee and volunteer is distressed and angry with what has transpired. Many have seen enormous effort disappear down the gurgler with the Society’s (preventable) collapse. However, cool heads need to prevail and to work constructively together if a positive outcome is to be achieved. That outcome might not be the shape, operation, interest that we all personally want, but it is quite possibly going to be the only one.