A judge has hit out at a "half-baked" legal attempt to stop a $1.55 million Liberal loan to save the political future of its former leader.
The legal challenge came after the Victorian Liberals' administrative committee decided to lend former leader John Pesutto money to settle his outstanding defamation debt to 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.
He coughed up $315,000 in damages and raised about $750,000 through wealthy backers and a GoFundMe campaign, with the remaining $1.55 million leaving him facing bankruptcy.
Legal documents filed with the Supreme Court on Thursday sought to block the loan on the grounds it potentially breaches party rules, naming party entity Vapold as a defendant.
It was brought by Colleen Harkin, named in the documents as a member of the administrative committee.
During a late afternoon hearing, Justice Michael McDonald said each member of the committee should have been named as defendants.
"You have come to this court half-baked, you have failed to name the proper defendants," he told barrister Cam Truong KC, acting on behalf of Ms Harkin.
"It doesn't get much worse."
Justice McDonald said the $1.55 million loan had already been transferred to Mrs Deeming's lawyers and questioned why lawyers had triggered an out-of-hours court hearing.
He told the court he could not see "any urgency in this matter" and the case was adjourned to July 4.
"The application doesn't get off the runway today," Justice McDonald told the court.
Mr Truong did not accept the case was brought improperly as he said the case was filed before the money was transferred.
He asked for at least a week to serve all committee members who are now set to be included in the challenge.
Daryl Williams KC, who represented three of the named defendants, questioned the timing of the case during the hearing.
"Why on earth are we here today when this decision of the admin committee, which by the way my clients had nothing to do with, was made a week ago," he said.
If Mr Pesutto is declared bankrupt it would trigger his exit from parliament and a subsequent by-election in his marginal seat of Hawthorn.
The payment deadline is Friday.
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.