Bankruptcy proceedings started on Thursday against the founder of the failed finance company, Bridgecorp, at the High Court in Auckland.
The Court of Appeal refused to issue a stay of proceedings earlier this week.
The High Court ruled in May that Rod Petricevic owed Bridgecorp more than $600,000 because the company paid his 2006 personal income tax.
Mr Petricevic has denied owing the money and says he is broke.
He failed to lodge a $576,000 payment with the court last month.
