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Coronet Peak Hotel Ltd in Queenstown has voluntarily been put into liquidation, owing more than $1.4 million, after a plunging market, "unsustainable rental" and the building's poor condition saw it fail this year.
PKF Corporate Recovery & Insolvency insolvency practitioners were last Tuesday appointed as liquidator, after directors and shareholders decided to put the company into liquidation.
The liquidator's first report to creditors and shareholders showed Coronet Peak Hotel Ltd owed almost $282,000 to preferential creditors the Inland Revenue Department, while holding assets of only $71,597.
Meanwhile, also on book value, trade creditors were owed $92,846 collectively, BNZ $400,000, Dold Trust more than $736,000, and DBM Enterprises $15,000.
Minus assets, secured and unsecured creditors were owed a total of $1,454,992.
The company operated the Arthur's Point premises from 2006 until July 2011, leasing from the landlord Coronet Alpine Ltd.
Last November, it filed a claim for damages caused by lack of building maintenance.
Alpine in March this year issued a counter-claim, and later agreed on a settlement effective July 1.
It saw the lease terminated, all chattels and other assets going to Alpine, as well as a required payment of $65,000.
The report stated one of the company directors had put the failure down to several causes, the first of which was "being too dependent on the Korean market", which fell away in 2008.
The Christchurch earthquake was "the death of the business", causing significant booking cancellations.
Additionally, there was an annual rent of $600,000 a year, plus rates and outgoings.
The director also said the building's condition, particularly its leaking roof, "resulted in many cancelled bookings and gave the property a bad name in the market".
Company creditors were offered a creditor compromise proposal on September 1, which was not accepted, resulting in the company's being put into liquidation.
Before its liquidation, Coronet Peak Hotel Ltd agreed to transfer its $24,770.33 Bartercard balance to Coronet Arthurs Point Ltd in return for the company's assuming responsibility for $17,029.29 of employees' unpaid holiday pay.
Liquidators have fixed a February 20 deadline for creditors to make claims and are conducting an investigation into the trading and financial affairs of the company. The next report is due in six months.
They gave a tentative estimation the liquidation would be completed by December 2012.