The former owner of ABC Learning Centres, Eddy Groves, is homeless, bankrupt and reportedly owes creditors more than $31 million.
The remarkable decline of Groves has been well publicised, but the full extent of his situation is only just coming to light.
He was declared bankrupt on January 29 in the Adelaide Federal Magistrate’s Court, but ABC Learning Centres were placed in receivership in November 2008, effectively sealing the fate of the one-time BRW Rich List regular.
The Australian reported today Groves has debts of $31 million and has only $38.79 to his name, as indicated by a statement of his financial affairs provided to Insolvency Trustee Services Australia.
The once high-flying executive used to be known for driving Ferraris, and owning multimillion-dollar properties on the Gold Coast and basketball team the Brisbane Bullets.
Today, Groves is reported to be in a backpackers’ hostel, but he’s optimistic he’ll be out of there in the next two weeks.
“Still to find a permanent address but expect to in the next two weeks,” Groves said in the statement.
The bankruptcy proceedings were launched by the Commonwealth Bank, which had pursued Groves over a private debt of $5 million on a loan he took out to purchase the Adelaide Dome basketball stadium.
Following the bankruptcy, PPB Advisory partner Mark Robinson said in a statement issued on January 29 it would be conducting “urgent inquiries” into Groves’ financial position.
“PPB Advisory will be making urgent inquiries with Mr Groves and other persons of interest to determine possible assets which may be available to pay unsecured creditors.
“Another key focus of the trustee will be to examine related party transactions which may have taken place prior to our appointment,” Robinson said.
Fairfax reported today Groves owes the Westpac bank $209,000 on four credit cards and owes his family and friends, including his wife, Viryan Collins Rubie, more than $1.5 million. He also says he owes Iconic Properties, of which he was a director until late 2009, $8.7 million.
Among his few assets which still remain is $10,000 worth of sporting memorabilia, currently in the possession of his ex-wife Le Neve, along with life insurance and trauma policies worth $18 million issued by ANZ subsidiary OnePath.
His self-managed Butterfly superannuation fund also holds $213,916.
Gone alongside his multimillion-dollar properties are his four Harley Davidsons and a Honda CRV.
ABC Learning Centres listed in March 2001 and by mid-December 2006 the company was valued at $3.4 million after its share price hit its peak of $8.62, putting his personal fortune at around $300 million.
Groves was quoted as saying in 2008 the pressure for a company to grow was immense.
“There is an enormous amount of pressure that the public market can put on a company to continue to grow,” he said.
“Even though you tell yourself not to fall into that trap, it’s very difficult not to, because the share price continues to grow, the returns were continuing to grow, and people want you to maintain that pace,” he said.
The reasons for the company’s downfall were numerous, including aggressive expansion, poor financial account management and a lack of thorough management.
This story was first published on SmartCompany.