Jeff Kennett urges Liberal Party to cover John Pesutto’s $2.3m legal bill to save him from bankruptcy

John Pesutto is going through “sheer hell” and should have his unpaid legal bill covered by the Liberal Party, former premier Jeff Kennett says.

Former Premier Jeff Kennett has sensationally intervened in an eleventh hour bid to save John Pesutto from bankruptcy over his unpaid $2.3m legal bill.

In a dramatic escalation of his public commentary, Mr Kennett on Monday wrote to the Liberal Party’s administrative committee insisting they honour Mr Pesutto’s debt.

Former premier Jeff Kennett wants John Pesutto saved from bankruptcy. Picture: Glenn Hunt

It came as lawyers for Moira Deeming applied to the Federal Court to have Mr Pesutto made bankrupt over the $2.3m legal bill.

A bankruptcy notice was lodged, and was awaiting assessment on Monday night, over Mr Pesutto’s failure to pay court-awarded legal costs to Mrs Deeming in their long-running defamation case.

Once accepted Mr Pesutto will have 21 days to pay the multimillion-dollar debt, enter into a payment arrangement or face bankruptcy and an abrupt end to his political career.

If bankrupt 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.

John Pesutto will have 21 days to pay the multimillion-dollar debt, enter into a payment arrangement or face bankruptcy. Picture: David Crosling

Senior Liberal Party figures are working to secure the support of the administrative committee to loan Mr Pesutto an estimated $1.5m he needs to clear the debt.

In his letter to the committee Mr Kennett outlined 10 reasons they should pay, including the more than two year impact the case has had on the party.

“This matter can be resolved quickly by the Party and its agencies if we pay the outstanding claims on JP,” he wrote.

“Regardless of what you think of John personally, what he said, the judgement, the consequences are much greater than an individual.

“It is wrong to ask him to foot the bills, to bankrupt him and his family. Wrong to ask him to borrow money from the capital funds we might have at our disposal.

“As an Administrative Committee you are in effect Trustees of our brand. I implore you to act decisively. We must put this issue to bed quickly.”

Mr Kennett described Mr Pesutto’s experience as “sheer hell”.

“This is not the Liberal way. Menzies when he established the party had five issues that we stood for,” he said.

“The first and second were the Individual and the Family. Not supporting the Pesutto family now denies the fundamental values the Party was founded upon.

“Finally, can you imagine the Labor Party allowing one of their own to be bankrupted.

“Please put personalities to one side and put the Party’s interest front and centre.”

Mrs Deeming told the Herald Sun last week 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.

Mrs Deeming says the last two years have been harrowing for her and her family. Picture: David Crosling

“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.”

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.