Creditors of failed Pialligo Estate will not get a cent from the sale of the property the business operated on, despite an estimated value of more than $30 million.
John Anthony Russell, 55, was director and sole shareholder - through company Llessur Pty Limited - of Pialligo Estate Operations.
He also has an ownership stake in the property known as Pialligo Estate.
However, none of Mr Russell's assets or the property will be available to liquidators to pay off creditors, RSM Australia liquidator Frank Lo Pilato said.
"This company's operations were limited to trading 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,'' he said.
"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.
"This property is now controlled by the mortgagee who took possession on 29 March."
Who owns the land?
The land many Canberrans know as Pialligo Estate is 19 hectares at 18 Kallaroo Road, Pialligo ACT 2609.
Nearly 13 hectares of that land, which includes buildings such as three wedding pavilions, was put up for sale.
Mr Russell and his wife Melissa have at least a 37.5 per cent ownership stake in the 19 hectares.
The title search lists Pialligo Horticulture as the proprietor, or owner.
There are four equal shareholders in Pialligo Horticulture, including Mr Russell's wife, Melissa Russell, also known as Melissa Kopp, and Pialligo Estate (ACT) Pty Limited.
Mr Russell is the sole stakeholder of Llessur Pty Limited, which has a 50 per cent share in Pialligo Estate (ACT) Pty Ltd.
Patricia Helen King and HKON Holdings also have shares in Pialligo Horticulture.
Pialligo Horticulture is also in the middle of proceedings against Access Canberra in the ACT Civil and Administrative Tribunal.
Can creditors get money from other businesses?
There were multiple businesses associated with Pialligo Estate.
However, only suppliers who can prove they supplied to Pialligo Estate Operations will be considered creditors, regardless of how much they claimed to have lost.
"Suppliers that have had dealings with any other entities within the Pialligo Estate Group should obtain their own independent advice about how best to seek payment for any monies they are owed," Mr LoPilato said.
A liquidator cannot usually pursue a director personally or try to use their assets to pay back creditors, unless they prove that person has violated relevant parts of the Corporations ACT 2001 or some other relevant law.
"A company director oversees the affairs of a company and plays an integral role in the management and supervision of the company's business activities," law firm Chamberlains says on its website.
"De facto directors, or shadow directors under the Corporations Act 2001, owe the same duties to the company."
A director's duties include acting in good faith, honestly and in the best interests of the company; avoiding conflicts between the interests of the company and the director's interests; preventing insolvent trading and reporting to any liquidators if the company is being wound up.
A person who violates certain parts of this act "may be guilty of a criminal offence with a penalty of imprisonment for up to 10 years or a fine, or both"; and or may be personally liable to compensate certain parties for loss or damages or be prohibited from managing a company.
The Canberra Times is not suggesting Mr Russell or anyone else has acted illegally or breached the Corporations Act 2001 or any other relevant law.
Who is owed money?
Pialligo Estate Operations is believed to owe $6 million to an estimated 640 creditors, including 36 secured creditors, 218 staff members, 110 wedding clients and and 277 unsecured creditors, such as suppliers and utilities providers.
It owes the Australian Tax Office $4.1 million, ASIC documents show.
Canberra Rex Hotel, of which Mr Russell was a director until March 22, eight days before the announcement of the closure of Pialligo, is also listed as being owed more than $11,000.
