Legal challenge looms over $1.55m Liberal party loan
The Victorian Liberals' administrative committee last week agreed to lend former leader John Pesutto $1.55 million to settle his debt to first-term MP Moira Deeming.
Mr Pesutto was ordered to pay $2.3 million in legal costs to Mrs Deeming after the Federal Court found he defamed her by implying she was associated with neo-Nazis.
It left him facing bankruptcy, which would have triggered his exit from parliament and a subsequent by-election in his marginal seat of Hawthorn, unless the debt was paid.
The payment deadline is Friday.
Mr Pesutto, who has already coughed up $315,000 in damages, had only raised about $750,000 through wealthy backers and a GoFundMe campaign.
A Liberal source with knowledge of the situation confirmed on Thursday that the $2.3 million had been transferred to Mrs Deeming's lawyers, including the $1.55 million loan from party entity Vapold.
However, a hearing to block the loan on the grounds it potentially breaches party rules has been listed for the Supreme Court on Thursday afternoon.
Documents connected to the proceedings are yet to be filed with the court.
Opposition Leader Brad Battin voted in favour of the loan, which must be repaid by Mr Pesutto at market-rate interest, and called for colleagues to drawn a line under the long-running feud.
Mrs Deeming was expelled from the Liberal party room over the furore but welcomed back in December as Mr Pesutto lost the leadership.
She offered to defer some of Mr Pesutto's legal bill in exchange for her guaranteed preselection and him swearing off trying to return as leader for three years, but the deal fell over.
Mrs Deeming and Mr Pesutto were contacted for comment.
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