The Otago Rugby Union is set to post a loss of several hundred thousand dollars and admits it can not pay creditors.
It is calling on the support of the community to get out of what it says is a very serious position, and says a bail-out from the national body is not an option.
Chairman Wayne Graham said yesterday that the union had to show it could still operate as a viable business.
"Otago rugby has to cut its cloth to suit. There is no time for excuses now. This is very serious where we sit today. We are unsure whether the ORFU will be able to trade on," Graham said.
The union, with the help of the New Zealand Rugby Union, has brought in Jeremy Curragh as change manager and he is going through the union's books trying to find a way for the union to operate and make a profit.
Curragh said the financial accounts for last year were still with the auditors and he could not say what the final loss figure would be, but acknowledged it would be several hundred thousands of dollars.
The negative equity for the union was more than $2 million.
The union was in discussions with sponsors, the bank, and other key stakeholders to draw up a plan to return to profit, and Curragh admitted the union was in a teetering position.
"The position we are in today is not from one sole contributing factor. There have been lots of contributing factors. There are lots of historic decisions which appeared to be correct decisions at the time but have come back to bite us," Curragh said.
"Lots of things have happened which could have been done better and that has resulted in the position we find ourselves today."
Graham said there were creditors who could not be paid by the union.
Staff wages were being covered by the NZRU.
Meanwhile, Graham confirmed that part of the $7 million received from the Dunedin City Council for the sale of Carisbrook went to pay a loan over houses owned by the union.
The union had bought houses around Carisbrook years ago as ground expansion was mooted.