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James Hickmann, founder of South Australian-based LED lighting and technology company Vailo, has been declared bankrupt by the Federal Circuit Court in Adelaide after failing to repay a $600,000 loan.

The decision automatically disqualifies Hickmann from managing corporations or holding positions such as director of more than 50 of his companies, including Vailo.

As reported by Adelaide’s The Advertiser, the development follows Marlbury Capital Lending Services Pty Ltd having pursued a sequestration action against the 36-year-old over a claim that he had not repaid a $596,424.20 loan.

The Australian Taxation Office (ATO) had recently joined the legal action as a “supporting creditor” over alleged unpaid taxes.

The Court had previously heard the ATO had three notices against Hickmann although it is understood it has since withdrawn three assessments.

While Hickmann has disputed all debt and tax claims against him and his businesses, on Wednesday the Circuit Court made orders declaring him bankrupt.

It also ordered that he cover Marlbury Capital’s costs to the amount of $6210, to be paid from his estate.

Hickmann’s lawyer Greg Griffin described the bankruptcy declaration as “unfortunate”.

As reported by The Advertiser, Griffin advised “it was unfortunate because there was in place a refinancing arrangement which would have seen the creditor paid off in full but the registrar said that sufficient time has passed and made that order.”

Griffin said his client was now considering his legal options in relation to the order.

Legal options available to those subject to bankruptcy orders include applying to the Court for a stay of the order, which would give time to appeal the case or resolve the debt.

In early March, Vailo was placed into receivership as a result of apparently defaulting on repayments to a major bank.

Australian Securities and Investments Commission records revealed National Australia Bank appointed an external administrator in a bid to recoup outstanding debt.

Vailo’s sponsorship of the Adelaide 500 Supercars race ended after the company entered receivership.

Last week the South Australian Government, which revived the event in 2022  with Vailo as naming rights sponsor, unveiled a new name, format and sponsor for the Supercars event.

It will now be known as the bp Adelaide Grand Final and will include an extra 100km race.

The event will take place in Adelaide from 27th to 28th November.

Hickmann was named South Australia's top young entrepreneur in the annual 40 Under 40 awards run by InDaily in 2021.

Images: Aaron Hickmann with the Vailo Adelaide 500 trophy (top) and Vailo installation at Adelaide's Norwood Oval (below). Credit: Vailo.

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