Black Caviar's younger brother has lost his battle with illness after two months of intensive care at a Victorian veterinary clinic.

The $5 million colt, at the centre of the collapse of BC3 Thoroughbreds, was euthanised on Sunday morning at the Werribee clinic.

Mark Webster, managing director of auction house William Inglis and Son which held security over the half brother to the champion mare, made the announcement on his blog.

"At approximately 11am this morning the Redoute's Choice x Helsinge two-year-old colt known as Jimmy was euthanised on humane grounds at the Melbourne University Veterinary Hospital in Werribee Victoria," Webster said.

"Jimmy was suffering from laminitis, a painful hoof condition that impacts on the mobility of horses."

The colt is believed to have developed laminitis after suffering an adverse reaction to antibiotics being used to treat a swollen leg, apparently caused by a spider bite.

BC3 signed for an Australian record $5 million at the Easter Sale but defaulted on payment of the colt along with several other horses which are now for private sale by Inglis.

Other BC3 purchases are being re-auctioned by Magic Millions next month at its Gold Coast sale.

"This is a very sad outcome for all involved," Webster said.

Inglis relocated eight horses from the property of former BC3 chairman Bill Vlahos earlier this month after the company was placed into voluntary administration.

Vlahos is being sued separately over missing millions from a so-called punters' club but has now filed for bankruptcy.

Webster said until this year, BC3 had been a respected client and had paid its bills on time.

At the 2012 Easter sale, BC3 bought Black Caviar's younger half sister for $2.6 million.

BC3 no longer has an interest in the Danny O'Brien-trained filly which ran second on debut last week.

Another half brother to the champion mare, All Too Hard, has just finished his first season at stud after a glittering career which brought four Group One wins.