Demons claim short-lived CEO lacked skills needed for the job and misled their board

Sacked Melbourne chief executive Paul Guerra made misleading statements to the Demons’ board and presented it with unrealistic financial forecasts – in which a $3 million revenue deficit was later identified – the club claims in court documents.

The former CEO also didn’t understand the club’s concussion reporting obligations and misled president Steven Smith about his whereabouts, according to the Demons’ statement of defence lodged in the Federal Court last week.

Guerra was sacked by the Demons’ board in April after just seven months in the role, which had included an annual salary of $757,000 and bonuses. He received a six-month termination payout.

The former chief executive last month launched Federal Court action against the club, alleging he was dismissed after raising concerns about widespread underpayment of administrative staff and complaining about the club’s use of a consultancy firm linked to former premier Daniel Andrews.

In the defence documents, the Demons reveal they first considered sacking Guerra within three months of him starting in the position, and claim that he “lacked the financial and management skills” for the job.

Guerra, who was appointed in April last year but did not begin in the job until early September, was allegedly warned by the board, even before he had officially started, about comments he made in the media. He has been contacted by this masthead for comment.

The club also alleged Guerra failed to properly manage a conflict of interest with his board position at Racing Victoria and the club’s push to construct a new base at Caulfield Racecourse , and claimed that he leaked sensitive club information to the media.

“Guerra’s financial forecasts presented to the board were questioned at the time as unrealistic, proved to be unrealistic and were re-forecast thereafter after identifying a material revenue deficit in excess of $3 million,” the club alleges in the court documents.

“He provided unrealistic financial reporting; made misleading statements about his whereabouts to Smith; failed to understand the club’s obligations and responsibilities in relation to concussion reporting; failed to identify and appropriately act on reputational risks for the club; and failed to identify and appropriately act on probity risks for the club.”

Having considered removing Guerra in December, the board again considered his position at a March board meeting, saying they still had the same concerns as in December but also that Guerra had continued to breach the media policy, leak to media and act outside his “scope of authority”.

Guerra also “continued to demonstrate poor financial reporting; and made misleading representations to the board,” the statement claims.

Two board members were tasked with reviewing Guerra’s position.