Mundella collapse probe finds $3.7M insolvent trading, 235 flagged deals

The unpaid debt forced his family to sell their farm and leave the dairy industry after six generations. Hall said other processors offered 76 cents a litre for milk, while Russell initially paid 90 cents. "None of the other milk companies were offering anything near the price he was offering."

Former employee Mairee Wall said she was owed about $10,000 in unpaid annual leave and superannuation. She worked at the Mundijong facility from 2012, before the company was acquired by The Cheeky Cow, majority-owned by Russell.

The companies were placed under a Deed of Company Arrangement in August last year. Unsecured creditors were told a rescue plan involving sale of the real estate portfolio under lease-back arrangements could return 68 cents on the dollar. The DOCA was terminated due to Russell's non-compliance with its terms, administrators said. It is not known what breach triggered the termination.

A financial statement showed more than $620,000 was paid from the administration account during the DOCA period for expenses including fees and trading costs. Just over $12,000 remained when the deed was terminated. No significant distribution to unsecured creditors occurred. The companies' property and remaining assets have been transferred to the mortgagee, Bowral Capital Pty Ltd.

Administrators blamed the collapse on poor financial control and record-keeping, along with trading losses. Thoroughbred purchase records show Russell bought horses worth under $10,000 in the past year. No evidence links those purchases to company funds or the flagged transactions, administrators said. Liquidators will continue investigating Russell's conduct as director. The ABC has sought comment from Russell.