Is the Rabbi Being Offered Fair Compensation?

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Mr Hochroth refers to an offer of more than one million dollars to the Rabbi but fails to mention that included in this offer are existing current  debt obligations to the Rabbi for the following:

A. $300,000 approximately in accrued long service leave, holiday pay and unpaid salary and allowances.

B. $200,000 approximately in a special “Simcha Fund” fund kept in trust for the Rabbi

C. $120,000 approximately in unpaid legal costs ordered by Mr Justice Brereton  and referred to in more detail below.

With regard to the accrued long service leave and “Simcha Fund” I believe I write with some authority as a forensic accountant of more than 45 years’ standing. I have studied the latest published accounts of the Shul as adopted by the members some 12+ months ago at the last AGM as well as other supporting documentation. These accounts made up to 31 December, 2015 record as liabilities of the Shul owing to Rabbi Milecki about $200,000 in long service leave and another $200,000 approximately recorded as “Simcha Fund”. 

If these amounts of $300,000 and $200,000 and $120,000 totalling more than $600,00 are subtracted from the offer of more than $1,000,000 this leaves a sum which, if my memory serves me correctly, is less than what the London Beth Din awarded Rabbi Moshe Gutnick several years ago. This decision is a publication available for all to read. It should also be mentioned that Rabbi Gutnick was only a part time Rabbi at Mizrachi and did not have 32 years of devoted and dedicated service.

Mr Hochroth opines that the offer has been formulated on his understanding of halachic requirements. 

I am happy to be corrected if I am wrongly advised but I would have thought Rabbi Milecki would receive more in compensation and I will readily apologise for my error if and when the secured creditors apply to the Chief Rabbinate of Israel in accordance with the Rabbi’s employment contract for a specially convened Beth Din to make a ruling on an amount of adequate compensation.

Mr Hochroth also opines that the offer gives the Rabbi greater compensation than he would have been entitled to under civil law. 

In this regard I refer the secured creditors, the Board and in fact all the members of South Head to read the judgment of Mr Justice Brereton in which he states that in the event of liquidation the Rabbi would be entitled to make a claim for damages  and that such claim  would be based on his life expectancy. According to Australian life tables a man aged 62 has a life expectancy of about 21 years  and if you calculate 21 times the Rabbi’s current salary you get a very large sum even if you discount to present values.

Mr Hochroth also omits to state that he expects the Rabbi to fund his own payout by effectively lending the money back to the Shul and receiving the majority of the payment over 10 years as an indexed pension (even though, as stated above, more than $600,00 is immediately due and payable). Mr Hochroth expects the Rabbi to accept payment over 10 years as an indexed pension while the secured creditors will be earning interest at a rate similar to that previously charged by Westpac which I estimate to be in the order of 5% p.a.

While the secured creditors receive about 5% the Rabbi is only getting CPI. Is it fair that the Rabbi should be getting less than the secured creditors bearing in mind that the secured creditors have a first mortgage secured over Shul real estate worth about $7,000,000 to secure a debt of $1,500,000 and the secured creditors are earning a higher rate of interest than they could receive if they placed their money on deposit with Westpac?

Furthermore the new offer of over one million dollars is less than what was offered to the Rabbi just before Pesach and before an Administrator was appointed by the Board and before the Rabbi was taken to Court by the Administrator acting as replacement for the Board.

The offer does not seem to take account any compensation to the Rabbi for the damages he has suffered as a result of the actions of the Board, the secured creditors and the Administrator.

The secured creditors have also chosen not to attend mediation with the Rabbi over the amount of this offer. This suggestion was originally made by the Administrator prior to the Court case and accepted by the Rabbi but rejected by the secured creditors. More recently after winning in Court, a new offer by the Rabbi to attend mediation was also rejected by the secured creditors.

Similarly it is well known that the secured creditors have continually avoided attending the Beth Din despite numerous pleadings by the Rabbi and as required according to the employment contract between the Rabbi and the Shul.

A subsequent publication by Messrs Hochroth Mann and Naumburger refers to administrator’s costs and legal expenses totalling $250,000 – $300,000. Surely these legal costs should not be borne by the membership as a whole but rather by those members of the Board who appointed the Administrator, then encouraged him to sack the Rabbi (even before speaking to him), locking him out of the Shul, changing the locks and then placing armed guards with pictures of the a Rabbi and instructions to deny him access. These persons then encouraged the Administrator to take the Rabbi to Court to validate his purported sacking, refused to attend mediation before and after the  Court case even though the Rabbi always expressed a desire to attend mediation whenever it was proposed. In the end, Mr Justice Brereton ruled against the administrator on all counts, confirmed that the purported sacking was void, restrained the Administrator from interfering with the Rabbi’s rights under his contract and in accordance with Halacha and ordered the administrator (which effectively meant the Shul) to pay the Rabbi’s substantial legal costs.

Surely those Board members and secured creditors should be funding these costs, not the whole membership base.

Yours faithfully,

Robert Krochmalik

Reykjavik, Iceland.