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The former All Black and Otago captain said "they can't keep bailing out provincial unions that cannot get their own house in order.
"A line has been drawn in the sand and it serves as a positive warning to other provincial unions. They must balance the books and be competent or face the consequences."
The decision was significant.
"It shows how much trouble the Otago union is in," he said.
Randell played 82 games for Otago between 1992 and 2002 and then spent five years overseas.
When he came back, he could tell the administration of Otago rugby was in trouble.
"About six years ago, they started making some pretty significant financial losses," he said. "It's a big shame." Randell said the ORFU must get its supporters and sponsors on side.
"There have been decisions made, coaches and marketing people appointed who have marginalised Otago supporters, who are the most passionate in New Zealand.
"There are a lot of competent people in Otago and I hope they can pull together.
"I've spoken to former players and we are all gutted for the ORFU.
"I have my fondest rugby memories from the time I spent in Dunedin. Otago is such an important part of New Zealand and world rugby." David Latta, who played 161 games for Otago between 1986 and 1996, was devastated by the news.
"It was a sad day for Otago rugby and Otago people," Latta said. "We all knew the ORFU wasn't in great shape. But it was a shock when they talked about liquidation."
Latta said Otago rugby had a proud history.
"We just have to look forward and try to implement a system that will get us out of it," he said.
"I'm a great believer in using astute business people, like Eion Edgar, who have a wealth of knowledge.
"We've got to engage smart people to come up with solutions very quickly. We need a miracle ball."
Latta felt a gold coin donation from every person in Otago would spark the confidence to get the ORFU out of its problems.
"It doesn't matter where you come from in Otago, we are all stakeholders in the history of Otago," he said.
"It is not just rugby, it is everything."
Former Scottish international John Leslie, who played 123 games for Otago between 1991 and 2004, felt bemused.
"I'm still trying to get my head around it," he said. "I'm coming to terms with it and am interested to see how it will pan out."
Earlier reports had alerted Leslie to the financial problems of the union.
"I realised the figures were poor but I didn't realise liquidation was looming. It took me by surprise."
Leslie was pleased club and school rugby was going ahead as usual.
"It is important that Otago rugby is salvaged and put on a go-forward plan," he said.
Leslie was the captain when Otago beat Waikato 49-20 to win the NPC in front of a packed Carisbrook in 1998.