Nigel McKenna's Peninsula Road Ltd, which owns the land earmarked for stages 2 and 3 of the development, was put in receivership on Tuesday.
His spokesman, David Peach, said Mr McKenna was not allowed to comment since the receivers had moved in and taken control.
"The receivership is a bitter disappointment but given the absence of development funding in the country any more it was probably an inevitability," he said.
"The vision for part two and three of the development was pretty widely and conceptually embraced by funders in terms of the addition of tourism infrastructure. We hope that a depressed market doesn't see the essence of that vision lost entirely," he said.
He said the future of the development was uncertain and "up to the receivers".
"It's sad that for the want of a backer, such a worthwhile project might not take place," he said.
Stages 2 and 3 were to include an Intercontinental hotel with a 1000-capacity conference centre.
Timothy Downes and Richard Grant, of Grant Thornton New Zealand Ltd, were appointed receivers by Fortress Credit Corp.
Mr Downes said Fortress Credit Corp had provided Peninsula Road with the mortgage to buy the land earmarked for stage 2 and 3.
Fortress, as first security holder, called in the receivers after Peninsula Road defaulted on the loan.
He said it was too early to comment on the future of the development.
Queenstown lawyer Warwick Goldsmith, listed on Mr McKenna's Melview Development website as director of commercial and legal affairs, confirmed Peninsula Road owned the land earmarked for stages 2 and 3.
"It's just bare land. Nothing is being built there. Stages 2 and 3 haven't started yet," he said.
He did not know why the receivers had been called in.
Mr Goldsmith said he was a consultant "to a small degree" for Melview Developments.
Two McKenna companies, Melview (Kawarau Falls Station) Investments Ltd and Melview (Kawarau Falls Station) Development Ltd, which were set up to develop stage 1, went into receivership in May.
Receivers Korda Mentha allowed building work to continue even though the two companies owed $180 million to Bank of Scotland International.
The receiver's second report says the bank continued to fund the project with a further $62.8 million after the receivership was announced.
More than $64 million was spent on construction, $1.6 million on receivers' fees and $795,645 on legal fees between May and December last year.
Stage 1, including two hotels and apartment buildings, is due to be completed next month.
Kawarau Falls was planned as a 6.4ha resort village of four hotels, 1100 units and 13 major buildings, boulevard-style streets, restaurants and parks. It was due to be completed next year.
• Meanwhile, about 50 workers are still not working on stage 1 following a dispute between contractors.
CBD construction director Grant Blackmore told the Otago Daily Times this week his company stopped work at the site on Monday.
"We are currently in dispute with Hawkins [Construction], so until that matter is resolved, we are not working on site," he said.
He said yesterday the company was still not working on site, declining to comment further under "legal advice".
Hawkins Construction chief executive Chris Hunter said the dispute was a commercial matter which needed to be worked through by the parties.
"[It] relates to a recently revised schedule of quantities and subsequent payment schedule.
There is a formal process to be followed and Hawkins is committed to working positively with CBD Construction through this process."
"CBD has currently chosen to reject this process by withdrawing their services from site. This is regrettable as it compromises the process," he said.
