The former childcare mogul Eddy Groves was declared bankrupt in an Adelaide court on Tuesday.
Mr Groves, the founder of failed childcare operator ABC Learning, failed to appear at the Federal Magistrates Court in Adelaide, prompting Registrar Patricia Christie to pursue a sequestration order against him.
The Commonwealth Bank had been pursuing Mr Groves over a $5 million loan he took out to buy the Adelaide Dome, the home stadium of the Adelaide 36ers basketball team.
The former high flying businessman was once on the BRW Rich List with estimated wealth of $295 million.
ABC Learning collapsed in 2008 owing creditors $1.6 billion, forcing the sale of 1200 childcare centres. Taxpayers contributed $22 million when the federal government was forced to prop up centres that were threatened with collapse.
Last year, Mr Groves managed to overturn a travel ban that was in place for three years while the Australian Securities and Investments Commission sifted through the ABC wreckage.
ASIC dropped charges against Mr Groves last July and has not said whether it plans to pursue further legal action.