Liquidators have been appointed to wind up the Pialligo Estate farm, tourism and hospitality business, which owes more than $6 million to more than 500 secured and unsecured creditors.
It also means that staff can access a federal safety net program to claim unpaid entitlements. But customers will likely lose their deposits paid for event bookings such as weddings.
The appointment of RSM Australia Partners Frank Lo Pilato and Jonathon Colbran follows the 28 March announcement by Pialligo Estate Operations Director John Russell that the Estate had ceased operating after the business was unable to reach an agreement with its financier to continue trading.
One day later, the financier, CRC1 Pty Ltd, took possession of the property on Kallaroo Road, Pialligo.
In a statement, RSM said that on 8 April, Mr Lo Pilato and Mr Colbran took control of Pialligo Estate Operations Pty Ltd – one of a number of entities within the Pialligo Estate Group – whose operations were limited to trading the Estate’s farm, tourism and hospitality business.
Mr Lo Pilato said that according to Mr Russell, the demise of Pialligo Estate was the result of compounding losses generated by a domino effect of events, including two fires involving two different Estate business premises in 2016 and 2017, increased insurance costs, the impact of natural disasters, the pandemic, supply chain and logistics challenges, staffing, lost vintages/farm production, and rising interest rates.
“The winding up of this once prominent Canberra farming, hospitality and tourism destination is a devastating blow for its staff, suppliers and its many private and corporate guests,” Mr Lo Pilato said.
“It is also a significant blow for Canberra’s farming, hospitality and tourism industries.”
Initial investigations of the financial statements and records of Pialligo Estate had identified more than 500 secured and unsecured creditors, including the Australian Taxation Office, over 200 casual and full-time staff, about 170 suppliers and 110 customers who had paid deposits for future bookings.
“We estimate these creditors are owed a total of more than $6 million,” Mr Lo Pilato said.
“These are early figures and are likely to change following more detailed investigations over the course of the liquidation.”
Mr Lo Pilato said the liquidators were preparing a brief report which was expected to be issued to all known creditors this week to inform them about the liquidation process and their rights.
“Importantly, as part of the liquidation process, Pialligo’s employees will now be able to access the Fair Entitlements Guarantee (FEG) scheme – a federally funded safety net that enables eligible employees of an employer in liquidation to lodge a claim for assistance for certain categories of unpaid employment entitlements,” he said.
“All employees will be contacted in due course with details of how to directly access this scheme.”
Mr Lo Pilato said there was insufficient money to pay a dividend to creditors, including those customers who had paid deposits for bookings.
“Our investigations are ongoing, but at this stage, it is not clear that there will be enough money to pay a dividend to creditors. This is obviously not the outcome anyone wants to see,” Mr Lo Pilato said.
However, he encouraged those customers who had paid their deposits by credit card to immediately discuss their situation with their lender to assess their options.
“We understand this will be devastating news, but we wanted to inform customers as soon as possible so they can make alternative arrangements to secure a venue for their special events,” he said.
Mr Lo Pilato said the liquidators would now conduct a detailed investigation into the company’s business and financial affairs to ascertain its total liabilities and assets.
“A further statutory report on the final outcome of the liquidator’s investigations will be provided to creditors in approximately three months’ time,” he said.
RSM has established the following contact points for creditors:
Staff – firstname.lastname@example.org
Customers and suppliers – email@example.com.