In attendance: Terry Jackson, Gary Kichenside, Kevin Nowland, Bernie Russell

Apologies:  Bill Keith

1.   The most recent correspondence from Damien Foley was discussed. The main issues raised were lot 1442, retention of cash balances and independent legal advice.

Lot 1442

2.  The Steering Committee believed that it was important for the new TBCC to have some form of control over lot 1442 due to the following reasons:

• There could be objections from the owner of the lot or subdivided lots (should it be sold) in the event that the TBCC wished to develop sections of the adjoining land;
• A combined development, including lot 1442, would significantly expand the range of development options available to the new club;
• Rezoning is not desirable as the lot is worth more to the new TBCC as a development lot than it is as saleable parcels of land.

3.  It was agreed that it was highly desirable for a market price to be fixed now, with the new TBCC having first option to purchase at the current (i.e. mid 2010) market price, as discussed.  This was predicated on TBCC having the financial capacity to purchase the lot at some future date.

4.  A second option discussed was to add the current value of the lot to the proposed loan for stock and cash, and to extend the term of the loan to allow for the repayment of the lot. Again, this was predicated on the financial capacity to repay the loan, and on the agreement of the MIBC board to such an extension in the term (potentially up to 15 years).

5.   A third option floated was to enter into a joint venture with MIBC for the development of the land. The Steering Committee reserved its decision on this option pending the completion of the financial analysis.

6.  Further deliberation on Lot 1442 was deferred until Friday 1 October to enable finalisation of the financial analysis.

Retention of Cash Balances (Stock and Cash)

7.  The Steering Committee strongly believes that all current assets, including stock and cash, were clearly the subject of the terms of transfer outlined in the supporting documents accompanying the resolutions put to members at the April General Meeting.

8.  It was nevertheless agreed that the new club's financial capacity to repay any loan in relation to stock and cash was an equally significant factor in determining how to proceed.  Accordingly, further discussion on the subject was deferred until Friday 1 October to enable finalisation of the financial analysis.

Independent Legal Advice

9.  It was noted that the Steering Committee is a sub-committee of the Board, primarily charged with bringing about de-amalgamation according to both the MIBC Board and members' wishes, in the interests of MIBC.  It was also noted that the Steering Committee has a secondary responsibility to the future members of the new entity, to ensure their interests are not compromised by any shortcomings in the de-amalgamation process.

10.  The Steering Committee believes that the MIBC Board understands and supports this secondary role and that the Board's acknowledgement of the need for independent legal advice in the Steering Committee's Terms of Reference is consistent with this support.

11.  In this light, the Steering Committee was concerned that many aspects of its work, such as the submission of its final report, the content and wording of subsequent resolutions put to MIBC members and the submissions to the Supreme Court and other Government bodies, could all have ramifications for future members that are not necessarily of primary concern to MIBC's legal team.   Accordingly, the Steering Committee wishes to seek independent legal advice about these issues, specifically from the viewpoint of both the Steering Committee (in terms of liabilities and responsibilities) and the future members of the new entity.

12.  It is not possible to constrain this advice to particular issues, as members of the Steering Committee do not have legal expertise and are not aware of the specific risks inherent in the process and, therefore, the issues about which advice should be sought.

13.  It was agreed that it would be difficult to sign off on a final recommendation without at least preliminary legal advice from an independent source.

Financial Analysis

14.  The financial analysis is continuing, although remaining work is not expected to have a significant effect on the final recommendation.  While there were some differences of opinion over some of the underlying assumptions, the figures at this stage show that, in all probability, there is insufficient cash flow to cover the mandatory asset replacement program envisaged for the club.  If these figures are correct, the issue of lot 1442 becomes a moot point, as TBCC would not have the financial capacity to purchase the land no matter what the proposed terms of purchase.  Nor would the new club have the capacity to repay the proposed short term loan to MIBC.

15.  It was agreed that further work would be undertaken on the financial analysis and that the Steering Committee would meet again on Friday at 2:30pm in the Tennis Shed to come to a final position.

Bernie Russell
Secretary, De-amalgamation Steering Committee