The founder of collapsed childcare operator ABC Learning, Eddy Groves, was declared bankrupt by a court in Adelaide yesterday.
Groves failed to appear at the Federal Magistrates Court in Adelaide and after his name was called three times outside the court building, Registrar Patricia Christie made a sequestration order against him.
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The bankruptcy proceedings were brought by the Commonwealth Bank, which has been pursuing Groves over a $5 million loan he took out to buy the Adelaide Dome, the home stadium of the Adelaide 36ers basketball team.
Bankruptcy represents a spectacular fall from grace for the former high flying entrepreneur who was a regular on the BRW Rich List.
Back in 2008, ABC’s share price hit its peak of $8.62, valuing the company at a staggering $3.4 billion and Groves’ personal fortune at around $300 million.
Groves was a market darling and his maverick image, which he cultivated by wearing cowboy boots, black t-shirts and sporting a mullet, only added to the appeal.
But his success was short lived after ABC Learning collapsed at the end of 2008 owing creditors $1.6 billion and forcing the sale of 1,200 childcare centres.
Taxpayers ended up paying up $22 million when the federal government was forced to bail out the childcare centres which were close to collapse.
According to a report in Fairfax, Mark Robinson, partner at PPB Advisory and the trustee in bankruptcy proceedings, is beginning “urgent inquiries” to track down assets associated with Groves.
“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,” Robinson said.
Last year Groves managed to overturn a travel ban and asset freeze which was placed on him by the Australian Securities and Investments Commission.
ASIC dropped charges against Groves last July but a spokesperson for the regulator told SmartCompany its investigations continue.
A spokesperson for the Commonwealth Bank told SmartCompany the bank is happy with the outcome and indicated the amount owed by Groves is around $8 million.
This story first appeared on SmartCompany.