Team New Zealand 'will collapse within months' if America's Cup is held in Auckland: Grant Dalton

Emirates Team New Zealand on the water during the America's Cup World Series last December. Photo / Brett Phibbs

Grant Dalton has been calling Royal New Zealand Yacht Squadron members who want to ensure the America's Cup is defended in Auckland, warning Team New Zealand could collapse unless it is taken offshore.

On December 9 the 150-year-old squadron is scheduled to hold a special general meeting where members are set to be asked to vote on a motion requiring the cup to be defended in the waters adjacent to Auckland.

The meeting was requisitioned by a group of squadron members after Dalton, Team New Zealand's chief executive, said it was not viable to defend the cup in New Zealand.

However, the warnings by Dalton, and possibly one of the staff at the squadron, may mean the meeting does not go ahead, with several of the petitioners withdrawing their support.

Jim Farmer QC, the former Team New Zealand director who was central to organising the petition, believed the process was being undermined by Dalton and he was giving serious consideration to withdrawing the notice.

Farmer claimed a confidentiality agreement the petitioners had with the squadron had "clearly been breached". The squadron denies this.

In a written statement, Dalton confirmed he had been speaking to people who signed the petition. When directly asked about suggesting Team New Zealand would collapse if the America's Cup was held in Auckland, he did not deny it.

"An underfunded defender forced to compete against a fully funded challenger that has come through a rigorous elimination series will lose, and lose badly."

One of the squadron members who says he spoke to Dalton said the Team New Zealand chief executive warned him that, not only would the team lose if the cup was in New Zealand, it could collapse.

"He told me he believed that Team New Zealand may not be a defender because the team will collapse within six months," the squadron member said.

On the call Dalton had "come up with a lot of facts and figures which were different to some of the other ones that have been bandied about" and he was unclear what was correct.

Dalton had repeatedly said there was no way he would engage with Mark Dunphy, the multi-millionaire businessman who has said he is willing to put millions into a campaign to defend the cup in Auckland.

"I got the impression that [Dalton] was just doggedly determined not to engage with Kiwi Home Defence group no matter what they were up to," the squadron member said.

"He's been very good at raising money over the years, so it's pretty hard to work out whether it's a ploy to generate more funding."

Team New Zealand chief executive Grant Dalton. Photo / NZME

The squadron member said whatever Team New Zealand's prospects were, it would be a "travesty" for the cup to be defended offshore.

"My motivation is the fact that the cup defence should be held in New Zealand come hell or high water, because of the time and effort that New Zealanders have spent winning it and then defending it," the squadron member said.

"I think 90 per cent of New Zealand would rather us lose it honourably here, than take off like thieves in the night to someone else's beck and call."

Farmer, who spent a decade on Team New Zealand's board but has since raised questions about its governance and financial dealings, said he had been told by a number of those who signed the petition that if the motion to keep the cup in New Zealand passed, "that Team New Zealand will fold its tent and go into liquidation". This appeared to be a threat, Farmer said.

"My concern now and the concern of others is the whole process is being grossly undermined by what Dalton has been doing. I have no confidence any longer that we will have a fair meeting on the merits of the issue, which is the venue, are discussed.

"… I'm basically giving serious consideration, with others, to withdrawing the requisition and we may well do that very soon," Farmer said.

"The whole point of having this SGM was to get the members an opportunity to express their views on the venue, but it's quite plain that Dalton is, in effect, saying if you support this motion, Team New Zealand will go into liquidation, and you will be responsible for that. It'll be your fault. That's just appalling."

Farmer also claimed Royal New Zealand Yacht Squadron general manager Hayden Porter had been calling people who petitioned the meeting saying if it was held in Auckland, Team New Zealand would forfeit the cup and "hand it to the Italians".

Porter rejected the claim and said confidentiality had been maintained.

"Members are calling me as CEO for detail and factual information very regularly at present. We are obliged to provide that and will do so to our members. Our members deserve to be fully informed and we are ensuring that that is the case," he said.

In his statement, Dalton confirmed he had spoken to four people. He denied the squadron had provided him the names of those who petitioned for the special meeting.

"The America's Cup and NZ sailing scene is a very small world so it is not hard to know who they were," Dalton said.

He confirmed he was "of course" asking people to withdraw their support for the meeting but denied he was trying to undermine the process.

"The purpose of the calls was to correct a lot of misinformation that many people have been fed so they understand the complete reality of the situation which will allow them to make fully informed decisions."

He did not directly address a question of whether Team New Zealand could collapse if the event was held in Auckland.

"The stark reality is that an underfunded defender forced to compete against a fully funded challenger that has come through a rigorous elimination series will lose, and lose badly. Emirates Team New Zealand's sole objective is to win the America's Cup, not just to participate."