Bankruptcy notice lodged against John Pesutto after he fails to pay fellow Liberal Moira Deeming $2.3m
Lawyers for Victorian Liberal MP Moira Deeming have initiated bankruptcy proceedings against former state opposition leader John Pesutto after he failed to meet a deadline to pay her $2.3m in legal costs.
The upper house MP's lawyers on Monday lodged a bankruptcy notice on Monday after Pesutto failed to pay the costs ordered by the federal court in May. The court in December found he repeatedly defamed Deeming by falsely implying she sympathised with neo-Nazis and white supremacists.
The notice provides Pesutto with a further 21 days to pay the remaining amount, enter into a payment agreement or face bankruptcy.
The deadline for Pesutto to pay the costs was Friday but sources close to the Hawthorn MP said he was he was unable to raise the full amount by that date, with about two-thirds still outstanding. Pesutto has already paid Deeming $300,000 in damages plus $15,000 in interest
If he is bankrupted, it would disqualify him from being a member of parliament and trigger a byelection in his seat of Hawthorn, which the Liberal MP holds by a slim margin of 1.74%.
Pesutto on Monday took to X to confirm the 'issuing of the bankruptcy notice'.
'I will be doing everything possible over the next 21 days to pay the amount ordered by the federal court,' Pesutto wrote.
'I will continue performing my work as the member for Hawthorn, and I reiterate my wish to do so for as long as the people of my electorate will have me.'
When approached by Guardian Australia, Deeming sent a statement earlier provided to the Herald Sun. The upper house MP said issuing the bankruptcy notice was not a decision she took lightly 'nor with any sense of triumph'.
'My goal is simple, to ensure that I am reimbursed so that I can repay that loan as I promised I would,' Deeming said.
'The possibility of a costly by-election in the seat of Hawthorn is not something I welcome. But retain it or lose it, the greater threat to the Liberal party is not the pain and cost of pursuing justice, but the dishonour and shame of failing to uphold it.'
'No man is above the law.'
On X, Deeming denied she was intentionally seeking to damage the Liberal party.
'If you interpret a politician being held to account as some kind of political or democratic disaster, maybe you are the problem - not me,' Deeming posted.
In the event of Pesutto's bankruptcy, Deeming's lawyers have also indicated they will seek to recover costs from third parties – and will apply for subpoenas to compel him to disclose communications with his donors.
Pesutto's situation has sparked discussions of a possible loan from the party's investment vehicle, the Cormack Foundation, which has been reluctant so far to provide financial support to the former leader.
Former Liberal premier, Jeff Kennett, lambasted the party's administrative committee and the Cormack Foundation for failing to 'support its own'.
Kennett said a loan from Cormack wasn't his preferred option, but it would at least prevent Pesutto's bankruptcy.
'My preference is to be generous. Even if they give him a loan, he will still be indebted for the rest of his life. They [Pesutto's family] don't deserve it,' he said.
'My preference is the organisations within the liberal party that have the capital - and substantial amounts of capital - said 'we may not agree with you but we are not going to put you and your family in a situation where you are potentially bankrupt.''
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