Adventure Land Palmerston: How kids’ play space racked up alleged debts of $1.5 million

The liquidator examining the decline of a kids’ play haven says he has questions about the director’s property interests, the company’s record keeping, and potentially voidable director-related transactions.

Adventure Land Palmerston. Picture: File

The company liquidator examining the decline of a kids’ play haven at Gateway Shopping Centre says he still has questions about the director’s property interests, the company’s record keeping, and potentially voidable director-related transactions.

Adventure Land Palmerston Pty Ltd, which opened its Yarrawonga business to rave reviews in 2019, appointed Worrells’ Chris Cook to liquidate the company’s assets on August 21.

According to Mr Cook’s statutory report to liquidators, released last month, the company’s alleged debts are estimated to total $1,545,364, including employee leave entitlements and unpaid superannuation worth an estimated $20,592.48.

The two most significant creditors, according to Mr Cook’s report, are landlords CLN Pty Ltd and Nesfall Pty Ltd, which are owed an estimated $1,219,017, and the Australian Taxation Office, which is owed an estimated $295,612.

According to the report, there are 24 community members who lost their party deposits when Adventure Land Palmerston went belly up.

Adventure Land Palmerston. Picture: File

Balanced against the debts, the company holds assets worth $45,820 –$47,018, consisting mostly of cash at bank.

Mr Cook’s report flags a number of potential breaches of the Corporations Act 2001.

He said his analysis of the company’s internal financial accounts indicated the company “has been insolvent from at least June 30, 2022”.

Mr Cook said further information was needed to finalise his view, which would involve the sourcing of “further books and records”.

There were also a number of transactions that may be voidable (able to be legally recouped) because, for instance, they were uncommercial, unreasonable, or unfair.

Among those included: $5000 sent to company director Amanda Louise Heath two days prior to Mr Cook’s appointment; payments totalling $23,000, sent in $1000 increments, to bank account; several withdrawals under $5000 which appeared to be personal in nature; and $79,789 sent to Volkswagen Finance, payments that “appear to be outside the ordinary course of business”.

Adventure Land Palmerston director Amanda Heath. Picture: Facebook

Mr Cook said he had formed a prima facie view the company, in addition to insolvent trading, had contravened due care and diligence, and good faith, provisions of the Corporations Act.

Company directors can be made liable for debts incurred after the point of insolvency; however, they hinge on whether the director has a defence, and whether they have capacity to meet any possible claim.

“I have received a completed statutory declaration from the director which indicates they do not have capacity to meet a claim,” Mr Cook said.

“I note however, further investigations may be conducted by a liquidator into the director’s real property ownership position, given the disclosures in the statutory declaration.”

Ms Heath, a former Darwin resident who has since relocated to Kingsholme on Queensland’s Gold Coast, was contacted for comment.

According to Mr Cook’s report, Ms Heath advised him that the “business began to experience financial difficulty as a consequence of the Covid-19 pandemic and the subsequent financial impact this had on the business”.

When contacted by this masthead, Mr Cook said his investigations were continuing.

The likelihood of any class of creditor receiving a dividend would depend on whether his investigation uncovers cash that can be recouped.

“There are a number of lines of investigation open at this point,” he said.

“[The possibility of a dividend] wholly revolves around whatever recoveries we make as part of those investigations.”

Originally published as Adventure Land Palmerston: How kids’ play space racked up alleged debts of $1.5 million