Administrators of potato chip manufacturer, Potato Magic, have recommended placing the company into liquidation.
Potato Magic Australia, was placed into administration last month, whilst owing creditors hundreds of thousands of dollars, ABC Rural reports.
The company was set up in 2005 and was owned by Paul Rennie, one of Australia's biggest potato growers, and fruit and vegetable businessman Nick Moraitis.
Potato Magic Australia had been manufacturing a healthy alternative to potato chips called Skinns from a leased site in Griffith.
Daniel Walley, from administrator PPB Advisory, said poor chip sales and a dispute between directors have since been blamed for the company's financial demise.
"It commercialised a chip product, which went out into the market and was taken up by the supermarkets, but I'm assuming that never caught on with the public.
"When you're funding any business as a start-up and there's loss making, you need to make a decision at some point about whether it's something you want to continue with,” Walley said.
Potato Magic Australia's four full-time and 12 casual staff, who worked at the Griffith plant, were made redundant last week.
Walley said liquidating the company will allow employees to access to their entitlements.
Administrators were unable to find a buyer for the business, but another company owned by Rennie did buy back the business name and its assets through a local auction house, for just under $3,000.
Mr Walley says once Potato Magic Australia is placed into liquidation, it will investigate whether it traded while insolvent.
"In instances where a business has been supported by directors with cash right up until the point where we were appointed, it is difficult to prove insolvency.