Bankruptcy fight over for Wikeley

It comes more than a year after bankruptcy notices were served against Ken Wikeley over a US$875,000 ($1.1 million) debt he owed a trust connected to his former friend.

The co-founder of Rainbow's End theme park has finally been declared bankrupt.

It comes more than a year after bankruptcy notices were served against Ken Wikeley over a US$875,000 ($1.1 million) debt he owed a trust connected to his former friend, Michael Jacomb.

Wikeley, who now lives in Melbourne, was called "hopelessly insolvent" last month by a judge and this week was declared bankrupt in the High Court in Wellington.

Wikeley helped facilitate the back-door-listing of numerous companies, including the now-failed text messaging company Plus SMS, which he induced Jacomb to invest in.

Wikeley also induced Jacomb to invest in a company called Orion Minerals Group.

In 2008 Jacomb agreed to put $250,000 in this company on behalf of the Genset Trust, of which he is a trustee.

Orion had mining interests in Chile and on a trip to the South American country that same year, Wikeley interested Jacomb in a separate venture involving a rock crushing machine.

They used a company called Edel Metals Group to negotiate for the purchase of the crusher technology and Genset trustees loaned US$1.5 million to EMG.

EMG's venture did not prosper and Genset's trustees - including Jacomb - chased Wikeley in the High Court seeking payment under the guarantee. They served bankruptcy notices against him.

Wikeley this year made another attempt to stave off bankruptcy by putting a proposal to creditors. At a June creditor's meeting, the Genset trustees voted against Wikeley's proposal while seven others voted for it. The Genset trustees then challenged whether other claims should have been accepted for voting purposes. A court last month said the claims should have been rejected and their votes not counted. This meant the assenting group of creditors did not have the majority required to support Wikeley's proposal.