South Head members invited to help avoid liquidation

July 19, 2017 by J-Wire Staff
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James Hochroth, Curtis Mann and Rodney Naumburger have emailed members of South Head Synagogue giving them an opportunity to pledge funds to avoid the synagogue being placed in liquidation on Friday or deferring the process.

The offer to seek help has been approved by the administrator Anthony Elkerton. However, the synagogue continues to be locked up.

Explaining the process and as to how members can offer help, James Hochroth, Curtis Mann and Rodney Naumburger told the members by email: “Administration is a mechanism that may be used to avoid liquidation of an insolvent company.  It provides the company with a moratorium on payments of debts for a short period of time while it endeavours to restructure. We have not been able to restructure South Head Synagogue to make it financially viable. The company is insolvent and is losing further money every day.

On Friday a meeting is scheduled to enable the creditors to vote to either;

  1. Adjourn the meeting.
  2. Place the company into liquidation.

If the creditors abstain from voting then by default the company comes out of administration. However, in that instance the administrator will have a lien over the synagogue premises enabling him to sell the premises in order to obtain payment due to him and costs incurred while he was administering the company.

The directors will then have control of an insolvent company without its major asset. Ongoing expenses will continue to mount including the Rabbi’s package as he will not have been terminated. Directors will be personally liable for trading while insolvent, a totally untenable situation.

Our estimate of the funding required to avoid liquidation and insolvent trading, comprises;

  • Administration costs and legal fees $250,000 to $300,000 (this includes an allowance for the Rabbi’s legal fees).
  • Payout of unsecured creditors approximately $100,000.
  • Ongoing working capital requirements $200,000.

A total of sum $550,000 to $600,000 that would need to be pledged before the meeting to avoid liquidation and take the company out of administration. All this is predicated on the secured creditors being prepared to leave their funds in place for the time being.

Further, the company would continue to incur monthly losses as expenses would far exceed income.

In the absence of having a negotiated settlement with Rabbi Milecki before Friday neither we nor other members with whom we have had discussions are prepared to advance further sums to the synagogue. You should also be aware that as late as a few hours ago we have endeavoured to continue negotiations with the Rabbi via Kevin Bermeister and we are waiting to see whether they will come to the party without putting undue complicated processes in place at this late stage.

If other members or friends of the synagogue are prepared to pledge funds prior to Friday then liquidation may be avoided or deferred. If you are so prepared please send an email to the administrator Mr Anthony Elkerton ( advising him of your details and the amount that you are prepared to pay prior to 5pm Thursday 20 July 2017 to avoid liquidation and what monthly ongoing amounts you are prepared to pay to avoid a recurrence of the current insolvent situation.



8 Responses to “South Head members invited to help avoid liquidation”
  1. Anna Simms says:

    What a tragedy.
    Could these numbers really be accurate?

  2. Michael Gertler says:

    I take no sides here but the starting point is obviously the contract with the Rabbi. Someone at some point in time signed a contract which contains (I believe) lifetime rights and provides for adjudication by Beth Din. So under civil law and Jewish law you can’t ignore that and as a former lawyer (without knowledge of the exact terms) it strikes me as strange that the view was taken that an Australian court would depart from what the parties had specifically provided in the contract. Are the Rabbi and Board being reasonable in negotiations given the situation the Shule now finds itself in and the changes in the make up of the congregation since the contract was signed? I have no idea, but I have to ask why the parties did not go down the contractually mandated beth din path (if that is the mandated path) well before the financial situation became so dire – my understanding is that these negotiations have been going on for years! I assume better minds than mine decided against that but it is not clear. The next point is what in fact do the members want? I hear that the majority want change, but at what cost? Rather than using a survey, why wasn’t there an EGM to determine support or otherwise for the Rabbi by vote, with all legal and financial facts presented beforehand? It may or may not have been possible to make it legally binding, but at least all concerned would have had clarity as to the percentage support in fact. It could have been by secret ballot to avoid embarrassing members. And that vote could also have addressed not just the binary issue of whether the congregation supports the Rabbi or not, but also the equally important issue of whether the vote would be the same if liquidation of the Shule were to be the consequence of removal of the Rabbi. Finally, if the position is that the Rabbi has entrenched rights and despite best efforts no agreement can be reached, then that is the reality and ought to have been acknowledged. Those who do not want to remain members had the right to resign, and a Board supportive of the Rabbi (or at least neutral) including perhaps the Rabbi as a Board member should perhaps have been appointed with a mandate to take whatever congregation remains and to make it work financially – or take the financial and other consequences of inability to do so. I have to declare the fact that I am not a regular attendee and not close to the details so I can only judge by all the emails which come to me which suggest that this situation could perhaps have been avoided had the legal and financial position been addressed early on. When I had my bar mitzvah at South Head the building was not as majestic as today, but it was a warm community with heart and I cannot imagine this situation having been allowed to continue on all sides. That said, due credit needs to be given to those who have tried to negotiate a favorable outcome and to those who have provided financial support. Anyway it is not the time for blame. It is a real pity and I hope compromise can be reached with creative and heart felt solutions.

    • Halina Rubenstein says:

      Well stated. The most measured and rational response I’ve heard since this debacle started.

  3. Halina Rubenstein says:

    It would be indeed miraculous for a last minute “stay of execution”, and I sincerely hope this happens so the shule can be enjoyed by all, but I’d like to understand why they are only now asking for help from the wider shule community, and at such short notice?

    The public meeting to discuss the shule’s financial woes way back in February would have been a great opportunity to do just that and there were organisations that could offer assistance but were not approached. However, this meeting appeared to have been hijacked (with little resistance from the moderators) by talk of whether or not the Rabbi should retire, Chabad, and why people aren’t able to sing Hatikvah on Yom Kippur. With such a vibrant and active community, this mess is so hard to fathom…

  4. Larry Baker says:

    Unfortunately giving money to the shule will only be throwing good money after bad. I’d rather support a brand new kehilla comprised of the old South Head members without ANY involvement by Rabbi Milecki nor his wife and family.

  5. Benyomin Simons says:

    In answer to Mr Hochroth’s request for members to financially assist the Shule so it should not go into liquidation this Friday.

    I suggest that Messrs Hochroth, Curtis and Mann return to the Synagogue immediately the approximately $300,000 that was recklessly incurred in legal and administration costs by taking Rabbi Milecki to court. Shouldn’t you be accountable to the members for this? You never consulted the membership for this action by way of an EGM!! Food for thought!!

  6. Avigael Cassel says:

    Just throwing good money after bad. At some point one needs to stop the bleeding and cut the loss. Otherwise its just another $600k down the drain ….

  7. Gary Keegan says:

    Sorry if Rabbi milecki is still there we won’t give a cent

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