Receivers list Belongil Beach property of Ken Lacey, former milk and bordello industry entreprenuer

Receivers have listed the Belongil Beach, Byron Bay retreat of the former milk magnate Ken Lacey and his wife, Madeleine, for December 1 Ray White auction.

It was in 2008 when the retired Potts Point stockbroker Chris Trumbull and his wife, Paddy, sold their Border Street, Belongil Beach, retreat for $3.6 million to the Lacey couple.

The Gold Coast Bulletin reported earlier this year that Lacey declared bankruptcy in December last year but then secured a way out of bankruptcy.

Westpac is the only registered lender on title, Property Observer notes.

The Trumbulls had paid $3 million in 2005 for the 683-square-metre beachfront holding. The marketing ads by Ray White agent Lloyd Lawton say the beach house may be subject to an upgrading or demolition order.

The Laceys had the proprty listed originally at $5.75 million, then for sale at $4.9 million in 2010.

Lacey won melbourne's milk distribution turf wars in the 1980s before heading north to the Gold Coast.

They hit the headlines when their imposing house on the Gold Coast's millionaires' row, Hedges Avenue, sold for $17 million in 2006, reportedly as the family were off to the United States to oversee the career of their aspiring rap-singer son, Jade, aka Lace Italiano.

But Jade, 24, and his brother, Dionne, 20, were subsequently arrested for the alleged murder of a Nerang landscaper, which has resulted in lengthy costly $6 million legal proceedings. They are in jail for manslaughter, torture, kidnapping and drugs. 

A Supreme Court jury in Brisbane found Dionne not guilty of murder but guilty of manslaughter and Jade guilty of wounding with intent. Dionne was sentenced to 10 years' jail and Jade to five years. Their prison time was increased by six years apiece when, in a separate case heard, they were convicted of a series of charges relating to an abducted at gunpoint over another drug dispute.

More recently the local paper reported Lacey had withdrawn from the sex industry, selling up Club Lace Bordello at Chinderah.

The Gold Coast Bulletin said the brothel had been bought in 2011 as an inheritance for his sons. The Club Lace at Chinderah, south of Tweed Heads, was to be the first of several brothels he was setting up.

He told the paper this week he would now focus on "development opportunities".

"We received a good offer for the club and we took it," he said. "[My sons] know I'll find something else for them."