Bankruptcy proceedings set to be initiated against John Pesutto after former Vic Libs leader misses deadline to pay up over Moira Deeming case

Bankruptcy proceedings are set to be initiated against former Victorian opposition leader John Pesutto after he missed a court imposed deadline to pay $2.3m in legal costs to Moira Deeming, following her successful defamation case.

• Moira Deeming’s full statement

Bankruptcy proceedings are set to be initiated against former Victorian Opposition Leader John Pesutto after he missed a court imposed deadline to pay $2.3m in legal costs to Moira Deeming.

But senior Liberal Party figures said an eleventh hour bid to negotiate a deal to cover the debt was close on Friday, but could not be reached in time to stave off proceedings.

Lawyers for Mrs Deeming now plan to issue a bankruptcy notice to Mr Pesutto – who has already paid $315,000 in damages – and had until 5pm to pay the outstanding legal bill.

It is understood the notice will be filed with the Federal Court on Monday which would give Mr Pesutto now 21 days to pay multimillion-dollar debt, enter into a payment arrangement or face bankruptcy and an abrupt end to his political career.

John Pesutto now faces bankruptcy. Picture: Diego Fedele

If bankrupted he would be ineligible to sit in parliament and his exit would trigger a costly by-election in his marginal seat of Hawthorn which the party fears losing.

Mrs Deeming told the Herald Sun the decision to initiate bankruptcy proceedings was not one she took lightly.

But she said she was committed to repaying wealthy NSW businessman Hilton Grugeon who bankrolled her successful defamation case against Mr Pesutto.

“My goal is simple, to ensure that I am reimbursed so that I can repay that loan as I promised I would,” she said.

“The past two years have been a harrowing journey for me, my husband and our four children.

“After being falsely accused of bigotry, of knowingly associating with Nazis — claims the court found to be defamatory, I faced a torrent of public and private abuse, including rape threats, stalking and personal and professional humiliation and isolation. Sadly, I was not the only innocent woman who suffered as a result of the campaign to expel me.

“This moment should never have come to pass. But since it has, let it stand as a reckoning — not just for one individual, but for a culture of political brutality that must end.

“No man is above the law.”

Moira Deeming. Picture: David Crosling

It is understood the party’s powerful administrative committee could meet over the weekend to discuss a potential loan to Mr Pesutto who has so far raised about a third of the $2.3m debt.

But former Premier Jeff Kennett lashed the party over its inability to bring the matter to an end.

“I am profoundly disappointed that various elements of the Liberal Party have allowed this to happen,” he said.

“They have put Mr Pesutto and his family through absolute hell over the last few weeks.

“I still hope and expect they will resolve this over the next 21 days.

“It was always a very simple question, do you or do you not support your own.”

Senior Liberals have been privately lobbying the party and associated investment and fundraising bodies to help fund Mr Pesutto’s case.

“The trustees of those organisations have a duty of care to uphold both the values, interests and reputation of the Liberal Party,” Mr Kennett said.

“If they’re not prepared to resolve this fully, then the consequences could be very serious.”

Senior Liberals have warned the party is in the grip of an existential crisis as it battles to rectify a deepening factional divide among its party room and broader membership base.

Opposition leader Brad Battin has come under increased pressure to intervene to save Mr Pesutto by lobbying both party bosses and key donors to dig deep to avoid a costly by-election.

Sources said it would cost up to $1m to defend the party’s hold on the seat.

A loss would rock the party’s hopes ahead of the 2026 general election, and further destabilise Mr Battin’s leadership.

He has come under increased scrutiny in recent weeks from internal critics who have privately complained about the direction of the party under his leadership.

The ongoing public battle between Mr Pesutto and Mrs Deeming has plagued the party for more than two years since it began in March 2023.

Originally published as Bankruptcy proceedings set to be initiated against John Pesutto after former Vic Libs leader misses deadline to pay up over Moira Deeming case