Adelaide 500 sponsor Vailo has been hit with an enormous debt claim in the Supreme Court
The Adelaide 500’s major sponsor, Vailo, faces an enormous claim for allegedly outstanding lease payments, in what is tech founder Aaron Hickmann’s latest stoush with creditors.
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Vailo, the sponsor of the Adelaide 500 racing car festival, is being sued for more than $23m by a Chinese-backed property investment firm which claims a subsidiary company also owned by founder Aaron Hickmann has defaulted on lease payments.
The Supreme Court matter comes after two vineyards owned by Mr Hickmann’s companies were placed on the market recently, and the assets worth a combined $10m-plus were sold off by liquidators to pay back debts to small business lender Bizcap.
Mr Hickmann has disputed the debts. However, the administrator which is now the legal owner of the vineyards, is proceeding with the sale.
In the latest matter, VIMG SA Monarto has lodged a claim against Mr Hickmann’s companies Vircura and Vailo, for unpaid lease payments for a property at Monarto southeast of Adelaide.
In late 2022 Mr Hickmann told The Australian that Vircura had the ambition of turning South Australia into the industrial hemp capital of the country.
In order to fulfil this ambition, the company expanded into the former Big W distribution centre at Monarto – a massive 65,000sq m facility which was set to be transformed into a production hub for hemp-based building materials.
Mr Hickmann was in early 2022 the majority shareholder in a company called BBS Pharmaceuticals – also known as Vircura Pharmaceuticals – which was to be the vehicle for his hemp ambitions. However, that company was placed into administration in January 2023.
Mr Hickmann had resigned as a director three months earlier.
VIMG had bought the Monarto distribution centre in 2021 and, according to Supreme Court documents, entered into a lease with Vircura over the property on October 20, 2022.
The lease was for seven years with annual rent of $3.22m, payable monthly, and increasing by 5 per cent each year.
VIMG’s court claim alleges that Vircura was unable to pay the required bank guarantee under the contract and instead provided a smaller-than-required bank guarantee in early 2023.
VIMG also says that between December 1, 2023 and February 15, 2024, Vircura was in breach of the lease as it failed to pay rent and was in arrears on operating costs.
VIMG alleges Vircura failed to pay its rent on time for April 2024, and VIMG sent a notice of default to Vailo, which was the guarantor for the lease.
VIMG says it terminated the lease in June 2024 and has claimed $22.6m in forward lease payments as well as other costs the company says it is owed.
Vailo and Vircura’s joint statement of defence in the matter denies that the terms of the lease as set out by VIMG are correct, and says the companies will seek to enforce an “incentive deed” – a six month rent-free period and a $3m overall rent reduction – which was supposed to occur at the start of the lease, “for their full force and effect at trial’’.
VIMG argues the incentive deed never came into effect because Vircura was in breach of the lease by not supplying the required bank guarantee.
Vircura has also denied this is the case and “deny that the applicant was entitled at law to terminate the lease’’.
Vircura argues that VIMG effectively nullified the lease by serving it with a notice of termination, which Vircura says was not done legally.
It was reported by this masthead in November that Vailo’s offices had been raided by Australian Federal Police and Australian Taxation Office agents.
It is unclear why the offices were raided, or if any items were seized.
Mr Hickmann’s lawyer, Greg Griffin, said at the time: “There is a matter with the ATO, with an objection. It is not related to Vailo. Aaron Hickmann has been compliant.”
He declined to comment further or provide any details.
Mr Hickmann has had a number of debt disputes over the past year.
In June the South Australian government placed a caveat over two of Mr Hickmann’s properties – a luxury $4.6m home at Glenelg South and a $345,000 Holdfast Bay boat marina berth – over unpaid land tax amounts.
Lenders sued Mr Hickmann late last year in a Queensland court over claims he defaulted on at least $614,000 of property and jet ski loans.
External receivers also seized control of an inner Adelaide suburban Parkside warehouse property worth at least $7.2m, over claims a company Mr Hickmann is a sole director of defaulted on the loan against it. Revenue SA was also seeking unpaid land tax on it.
Mr Hickmann has repeatedly disputed all claims against him or his companies. His lawyer was contacted for comment on Thursday.
Originally published as Adelaide 500 sponsor Vailo has been hit with an enormous debt claim in the Supreme Court
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