Liquidators Investigate Millions in Transactions Following Dairy Business Collapse

Liquidators overseeing the collapse of West Australian dairy company Mundella Foods have identified nearly $800,000 in potentially unreasonable director transactions, according to a statutory report filed with the corporate regulator.

The report, submitted by liquidators at Mackay Goodwin, also states that Mundella may have traded while insolvent from as early as July 1, 2024, involving transactions totalling $1.3 million. The findings indicate that further investigations are necessary to determine whether frequent cash withdrawals were utilized in company operations or were unreasonable.

In addition to the cash withdrawals, the investigation is examining the multi-million-dollar sale of Mundella Foods and the Margaret River Dairy Company to dairy processor Artisanal Market to determine if the agreement constitutes an uncommercial transaction.

Creditors are currently owed $12.5 million following the collapse of Mundella Foods and its associated entities. Administrators have continued to operate the business and fulfill orders while the inquiries proceed.

Former director Hayden Russell denied any wrongdoing when contacted by the ABC, stating that he literally has nothing left and acted in good faith at all times. Mr Russell maintained that the cash withdrawals were used to cover operational costs and employee wages, and added that he had invested several hundred thousand dollars of his personal savings into the enterprise.

The statutory report did not issue final findings regarding the transactions. Liquidators noted that completing the additional investigations required to reach definitive conclusions would depend on securing further funding.