A cinema company run by serial paedophile Dennis John McKenna went bust in 2005 with more than $1.2 million in debts.
The convicted child abuser, whose crimes at a State-owned boarding hostel in Katanning have prompted a government inquiry, operated the Regent cinemas in Midland and Kalgoorlie under the alias of Des McKenna from the late 1990s until 2005.
Documents reveal the company, West Coast Cinemas, was wound up with the biggest creditor - the Australian Taxation Office - owed $445,592.
McKenna was sentenced to six years jail in 1991 after being found guilty of 22 counts of sexual abusing five boarders at St Andrew's Hostel.
Some time after his release from prison McKenna started managing the cinema complex in Midland, which included a room on the top floor that he furnished as a bedroom.
One of the reasons he was popular in Katanning as the hostel warden was the fact he operated a community cinema for children and town residents.
But his post-prison life in Midland under a false name did not go unnoticed. A woman, who wanted to remain anonymous, recognised McKenna from his time at St Andrew's and reported it to police at some point after 1997.
She was concerned because local schoolchildren were doing work experience at the cinema.
"I rang the police and said I'd recognised this man and they said he'd done his time and unless there was a complaint it was difficult to do anything," she told _The West Australian _.
"My fear was that these people don't change and given that he was using a cinema in Katanning and now one in Midland, I thought it was a bit spooky."
McKenna was jailed again last month for sex crimes against a further six St Andrew's Hostel boarders.
Geoff Burgess, a former employee of the Midland cinema, said McKenna also ran a part-time cinema at Pioneer Village in Armadale.
"I didn't know about his background," Mr Burgess said.
"I do remember in his office he had a framed photograph of a woman and a couple of kids. He told me that was his wife and children and that they had been killed in a plane crash."
Last week, Premier Colin Barnett appointed retired judge Peter Blaxell to investigate how McKenna was able to commit his crimes unchallenged by authorities for more than a decade.