Legal stoush may shutter Sands Torquay Resort

A Chinese-linked company that owns a popular Torquay resort, which has been the subject of a legal stoush over ownership and owed finances, may be tipped into liquidation by creditors.

Peppers, The Sands Resort Torquay resort.

A prominent Victorian golf course and resort was likely trading while insolvent, a report by voluntary administrators has warned.

Creditors will meet on Monday to decide whether to tip the Chinese-linked company that owned Peppers The Sands Resort in Torquay into liquidation.

It comes as at least one key creditor has moved to block sale of the resort amid an increasingly contested administration process.

The resort, which received Andrews government funding for hotel quarantine despite never housing guests, has been the subject of a legal stoush over ownership and debts.

The latest administrator’s report recommended it was “in the best interests’’ of creditors that the company be wound up but said a further probe into its affairs was warranted.

“It is the administrator’s view that is likely the company traded while insolvent since at least October 2018 and an ­insolvent trading claim may be made against the directors for debts incurred after that date,’’ it said.

The report blamed the company’s failure on loan defaults, government restrictions due to COVID-19 and other group companies being placed in external administration.

“At this stage, a dividend to creditors is not likely,’’ it said.

Peppers, The Sands Torquay Resort.

Documents filed with ASIC reveal the company owed ­employees $845,396, unsecured creditors more than $2.1m and statutory creditors more than $1.7m.

The company owes more than $1.5m to the tax office, $229,815 to Barwon Water, $127,000 to Surf Coast Shire, and had not made a superannuation payment since October 2019.

It had also been “put on notice’’ by its secured creditor in October 2018 that it “believed the company was insolvent’’.

There is now a tussle of ownership for the resort, with an 18-hole golf course designed by PGA winner Stuart Appleby, 112-room hotel, conference centre, bar, restaurant, tennis courts and health club.

An attempted sale of the property for more than $14m late last year fell through. A ­secured creditor has since taken possession.

The Herald Sun revealed in July the resort was in ­administration with about 300 creditors, including staff.

It was sold for about $23m in 2017 to Cloud Abacus Holdings and Odyns Holdings, which operated it as Walden Cloud Group, directed by Jun Zhou, Guoxin Zhou and Yang Sun.

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