Shire Swim School at Kirrawee closed without warning overnight, with parents losing fees paid in advance and the owner saying, "I have lost my whole life, like a fly with a swatter".
John Widmer, who has operated the business in Yalgar Road for 21 years, announced the closure in a Facebook post.
"It is with great shame and embarrassment that I have to admit defeat and accept the fact that I have been left with no choice to declare that I have been forced into bankruptcy…," he said.
Mr Widmer gave personal and business reasons, which had started with an audit by the Australian Tax Office (ATO).
He said he was unaware of a court hearing brought by the ATO, which resulted in the business being "put into liquidation".
"The first I knew of this was two weeks ago when the liquidators arrived at the pool to serve me papers," he said.
"I was in utter shock to say the least.
"I have tried everything possible to save the business since then and have found no way out of it
"Last week we were given five working days to rectify the situation by buying my own business of 21 years back, at a cost too large for me to match unfortunately."
Mr Widmer said "at the end of the day it is my fault for believing in people that I, in hindsight, never should have".
"I am broken-hearted to lose my baby of 21 years, worse still the fact people have paid fees and may not be refunded," he said.
"If that happens I will be mortified. I will be pushing and doing what I can to work for you guys, my swimming families.
"While you have lost some fees and a great place for your children to learn to swim and save themselves, I have lost my whole life, like a fly with a swatter.
"I am so so sorry, and those of you that know me well, some second and one third generation families, know that I would never of done this maliciously or with ill intent."
Mr Widmer said if he could find another pool to run the swim school he would repay any debts.
The Leader has attempted to contact Mr Widmer to seek further information.