Luxury hotel developer to face creditors owed $6m

Nigel McKenna. Photo / Supplied

Nigel McKenna is about to face creditors claiming nearly $6 million from a venture managing Auckland's five-star luxury Westin hotel.

Creditors are scheduled to meet at 10am at Alexandra Park on Friday to discuss a debt compromise scheme.

The developer is the sole director of a company which for months has failed to pay investors in the upmarket hotel which opened in 2007.

Investors are being encouraged to agree to the scheme.

McKenna brought the Westin international brand to New Zealand three years ago. The 172-room, $130 million hotel at 21 Viaduct Harbour Ave opened to much acclaim and since then has hosted a string of major events.

The company facing claims of $5.9 million, Lighter Quay Hotel Management, owns facilities such as bars and restaurants and leases suites from investors who paid millions of dollars to get the project off the ground.

A creditors' compromise proposal is being managed by Jeff Meltzer and Lloyd Hayward of insolvency specialists and accountants Meltzer Mason Heath.

They listed 122 creditors demanding an average about $40,000 each although sums vary widely.

Lighter Quay Hotel Management faces the claims from people who expected good returns from the units in the block.

The biggest creditor is McKenna's own Melview Viaduct Harbour, claiming $1,281,629.94.

British investor GDF-1 LLP is claiming $194,956.68, the Lighter Quay Residents Society is claiming $188,975.89 and Cheah Min Loong and Cheah Soo Liang are claiming $90,818.03.

Each creditor and the amount claimed appears in the schedule, posted on the Companies Office website.

If the creditors agree to the scheme, Meltzer and Hayward will manage the compromise and have the power to oversee payments to creditors.

A compromise fund of $1.4 million is part of the deal.

The scheme noted McKenna's large interest as a creditor against Lighter Quay Hotel Management.

"The director is the sole director and has an indirect beneficial interest in the shareholding of Melview Viaduct Harbour, which owns 16 units in the hotel and is owed a total of $1,139,226.61 plus GST by the company for rent to 31 March, 2010.

"Melview will be a compromise creditor under the compromise proposal and will rank equally for payment with other compromise creditors under the compromise proposal," the scheme said. But McKenna will forego rent from his owns rooms.

McKenna is not speaking about his financial woes but three years ago, he was brandishing his involvement in the Westin, the finishing touch to his $300 million urban renewal in the area.

"Lunching in the Westin Hotel, which he developed, owns and operates as the final project at the 1.62ha Lighter Quay urban renewal project, he pulls out a hotel card which simply states 'owner'," the Herald reported on December 1, 2007.