13 June 2023

13 ha of Pialligo Estate land on the market but out of liquidators' reach

| Ian Bushnell
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Garden with fountain

Pialligo Estate: the business ceased operating in March and is now in liquidation. Photo: Stephen Ning.

The Pialligo Estate landholding remains on the market, but the almost 13 hectares of land reportedly valued at more than $30 million will be of no comfort to creditors of the collapsed hospitality and produce business.

The company that operated the business, Pialligo Estate Operations, may be in liquidation, but liquidators RSM Australia cannot touch the land and assets to satisfy any of the creditors, including the Tax Office, which is owed the most at $4 million.

The business collapsed owing $6 million to more than 600 secured and unsecured creditors, including more than 200 casual and full-time staff, about 170 suppliers and 110 customers who had paid deposits for future bookings.

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Pialligio Estate owed money to federal government departments and agencies, utility companies, local and interstate suppliers, contractors, trades, law firms, assorted businesses, employees and customers who had paid deposits.

But RSM Australia Partners Frank Lo Pilato and Jonathon Colbran have only been appointed to wind up one company – Pialligo Estate Operations Pty Ltd.

Mr Lo Pilato said this was the trading arm for the Estate’s farm, tourism and hospitality business under an agreement between Pialligo Estate Operations and the land owner, which was a separate enterprise within the Pialligo Estate Group of companies.

“As such, the liquidators can only realise the assets owned by Pialligo Estate Operations, which are currently being assessed, but do not include the property on which the Pialligo Estate farm, tourism and hospitality business operated,” he said.

“Therefore, unsecured and priority creditors will not receive any benefit from the sale of the property.”

An aerial view of Pialligo with the Pialligo Estate land for sale marked in yellow. Photo: Savills.

Mr Pilato said the sale of the property was being controlled by the mortgagee, the business’s financier who took possession on 29 March.

The business’s owner John Russell and his wife have a stake in the land.

Mr Pilato said it seemed unlikely that creditors would receive anything from the liquidation.

“Once we have concluded our investigations into the Pialligo Estate Operations’ affairs, we will deliver a report to creditors that will detail the company’s assets and liabilities and whether any dividend can be paid to unsecured and priority creditors, which at this stage still appears unlikely,” he said.

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The listing on the Savills website says that along with the land, there are also “beautifully designed pavilions, thoughtfully outfitted for designated functions overlooking carefully curated fields”.

“The land area of Lot 4 is 126,654 sqm and encapsulates the entire hospitality precinct of the estate, which can host two weddings concurrently while catering to large and small functions with ease,” it says.

“Included in the sale will be an inventory of equipment/furniture/fixtures and fittings that will be provided to the new owner as part of the due diligence process.”

Savills describes the land as a sprawling hospitality estate close to Canberra’s CBD and adjacent to Canberra International Airport.

It says the Pialligo Estate business had $3.5 million in earnings before interest, taxes, depreciation, and amortisation.

A Savills spokesperson said the agent could not comment on the sale.

Mr Russell said in March that the business had succumbed to a decade of setbacks, including two fires, the COVID-19 pandemic and rising interest rates.

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If they had a shred of decency the owners of the business would use the money they get from the property sale to pay their creditors.

Perhaps you’ve answered your own implied question – “If they had a shred of decency …”

ChrisinTurner5:19 pm 14 Jun 23

Beats me how the ultrarich get away with this asset hiding. Seems like you don’t need to keep it in the Cayman Islands.

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