Liquidators probe multi-million-dollar Mundella asset sale
Liquidators of collapsed Western Australian dairy company Mundella Foods have flagged $778,000 in potentially unreasonable director transactions and are examining the sale of its assets. Creditors are still owed $12.5 million, and the report says no dividend is likely.
Liquidators are probing the multi-million-dollar sale of collapsed Mundella assets, according to a statutory report ABC News covered on November 10, 2026. They are examining whether the sale of Mundella Foods and the Margaret River Dairy Company (MRDC) was an "uncommercial transaction". Creditors are still owed $12.5 million.
Liquidators at Mackay Goodwin filed the report with the corporate regulator. They found $778,000 of potentially unreasonable director-related transactions, including "frequent cash withdrawals". More investigation is needed to establish whether the cash went into the business or was unreasonable.
What the liquidators found
The liquidators also found Mundella may have traded while insolvent from as early as July 1, 2024. Those transactions total $1.3 million.
Former director Hayden Russell faces scrutiny over what liquidators say could be more than $2 million in potentially unreasonable director-related and insolvent trading transactions. The report made no final findings.
Further work would need extra funding from creditors, the report said. Liquidators also told creditors it was unlikely Russell had the financial capacity to meet any claims brought against him.
The sale under scrutiny
Last month, dairy processor Artisanal Market announced its subsidiary had bought the Mundella and MRDC brands, properties and assets. The report says the sale was agreed on July 17, just weeks before creditors voted to put the companies into liquidation.
The seller was mortgagee and private lender Bowral Capital. Bowral and another secured lender, Bizcap, received $5.85 million and almost $1 million respectively from the final sale in October.
An uncommercial transaction is a deal that a reasonable person in the company's circumstances would not have agreed to. Liquidators said the investigation into the property deal is ongoing. Bowral has been approached for comment.
"For the avoidance of any doubt, proceeds from the Sale remain insufficient to repay Bowral and Bizcap in full for the amount owed by the Company and MRDC," the liquidators said. "Accordingly, the Sale will not result in any recoveries for other creditors."
Workers and creditors
Workers, who rank as priority creditors, are still owed almost $940,000 in unpaid wages, superannuation and entitlements. Secured and unsecured creditors are owed a further $3 million and $8.5 million respectively.
"At this stage of the Liquidation, it is unlikely that there will be a dividend to any class of creditors," the report stated.
The companies went into liquidation in August after a failed rescue plan set out in a Deed of Company Arrangement. The report confirmed they missed several obligations to creditors under that agreement.
Director's response
Russell denied making any unreasonable transactions and said he acted "in good faith" at all times. He said he used cash withdrawals to pay for operations and workers' wages, and spent a few hundred thousand dollars of personal savings on the business.
"I literally have nothing now, because I put every single penny I had into there to try keep it afloat," he said.
