Westin disarray a concern for RWC plans - investor

The Westin Hotel on Auckland's Lighter Quay. Photo / Supplied

Receivers for the company that operates the troubled Westin Hotel are planning to shed up to 100 staff, throwing the plans of hundreds of guests booked for the Rugby World Cup into disarray, say investors in the property.

Receivers KordaMentha took control of the management company that runs the five-star waterfront hotel in July after negotiations between Lighter Quay Hotel management and its creditors stalled.

Investors who bought suites in the 172-room property, which opened in 2007, are owed at least $3.8 million in rental arrears by Nigel McKenna's LQHM, which leased the rooms.

A High Court decision allowed owners of suites in The Westin to seize control of their property from August 11.

Since then the owners have been attempting to broker a deal to settle the dispute over unpaid returns with the receivers, but said today those talks had failed.

"The owners tried to engage the receivers in dialogue that would see the hotel continue to operate at full capacity, and made an indicative offer to purchase the assets controlled by KordaMentha, but as this was effectively rejected without proper response, these rooms will now close," a statement from owners' representative Graham Wilkinson says.

The closure means the Westin hotel company, which operates the hotel, will shortly have less than 60 units to operate and is expected to lay off up to 100 staff, the group says.

"The owner's solicitors have been advised that the receivers will try to prevent the 110 owners from gaining access to their property, as well as disconnecting the power, telephone and television.

"There is a very real potential here to badly damage New Zealand's tourism brand, throw into disarray the plans of hundreds of guests booked for the 2011 Rugby World Cup, cost jobs and be a black mark against New Zealand's international reputation as a safe place to invest," Wilkinson says.

The owners had obtained an independent valuation of the assets controlled by the receiver and subsequently had made an offer to purchase these but no response was received to it.

"The situation is deteriorating and it is disappointing that a sensible outcome could not be negotiated. This property is New Zealand's premium hotel, in our largest city and we are going to watch a slow destruction in value and a large inconvenience to thousands of guests" lamented Graham Wilkinson.

KordaMentha was unavailable for comment this afternoon.