This summer's Hero Parade has stalled after the Hero Charitable Trust revealed a $142,000 debt to a public meeting last night.

More than 100 people gathered in the Aotea Chapel in Queen St for what had been expected to be a fiery debate.

But an unaudited financial statement showing the trust owed $142,398 kept the mood subdued.

Trustee Vaughan Arronjohn placed some of the blame for the financial plight on internal fighting and the effect of media reports.

Ongoing controversy had crippled the trust's efforts to find sponsors; one corporation had withdrawn a proposed $150,000 sponsorship package, he said.

Mr Arronjohn added that the situation meant the annual parade, the showpiece of Auckland's gay community, was "highly unlikely" to happen this summer.

Members of the Aids Foundation said the problems were also beginning to affect their sponsorship.

But the trustees are confident a Hero Festival will still go ahead next year with a dance party and the "Big Gay Out".

Insolvency practitioner Steve Lawrence told the meeting that the trust was insolvent and could no longer legally trade.

He said that while voluntary liquidation was not the favoured option to meet the crisis, it was the most likely outcome.

The list of creditors is being kept secret because of privacy issues.

Another group, Hero Rescue, might still attempt to refloat the parade if it can find sufficient funding.

Anne Spier used last night's meeting to announce her resignation as chairwoman of the Hero Trust, but not before lashing out at those she alleged had conducted a campaign of "personal vilification" against her.

She said the campaign "smacked of the dirty lesbian politics of the 80s and that brand of self-interest worries me when I contemplate the future of Hero".

Two other trustees, Tim Bray and Wayne Cosgrove, also stood down.

The remaining three, Mr Arronjohn, Pleasance Hanson and Paul Voight, will become directors of another entity, Hero Ltd, which was established last November.

Four further directors and a consultation group will be elected at another meeting to be held in the Aotea Chapel at 6 pm on November 12.