SKM Recycling, the City of Ballarat's cycling contractor, was on Friday ordered to wind up by Victoria's Supreme Court, which agreed to an application by multiple creditors that the company cease trading.

The move followed SKM's failure to produce a promised $13.5 million from a new investor.

"In the absence of a significant cash injection ... it is clear the defendant cannot raise sufficient funds to pay its debts," Judicial Registrar Julian Hetyey said.

It leaves more than 30 Victorian councils' kerbside recycling in limbo, while the company's 300 employees are set to lose their jobs.

Tasman Logistics is owed $3.35 million by SKM and led the legal action against the company. Another 15 creditors are owed more than a combined $2.2 million.

SKM last month asked to be allowed to continue operating, saying it was working on a deal with an investor so it could pay creditors.

But barrister Reegan Morison on Friday told the court no deal had been reached and SKM was not in a position to oppose the wind-up application.

"The funds have not been received as hoped," she said.

"The financial position of the company remains the same."

Creditor Marwood Construction said they had nowhere to put 10,000 tonnes of recyclable waste stored at its Derrimut warehouse and awaiting processing by SKM.

"Where are we going to move it to? Are we going to put it in a hole in the ground?" the company's Carly Whitington told reporters outside court.

She said the company was still calculating how much it was owed by SKM.

"I know SKM were trying, it's up to the government to step in and fix the problem now," Ms Whitington said.

SKM's collapse comes a day after the company reached a $1.2 million settlement in a class action over a 2017 fire at its Coolaroo plant in Melbourne's north.

The state government has previously labelled the recycler a rogue operator over a series of fires and stockpiling problems at its Melbourne sites.

- AAP