Fletcher moves to bankrupt McKenna

Nigel McKenna. Photo / Supplied

Fletcher Construction says it is moving against Auckland developer Nigel McKenna over a debt for building Wellington's Holiday Inn.

Mark Binns, chief executive of the Fletcher Building division, said that action in the High Court at Auckland yesterday was the result of a long-running dispute over the bill.

A hearing was held before Associate Judge Tony Christiansen on an application to set aside a bankruptcy notice. At issue is the debt Fletcher claims it is owed as the final payment.

McKenna has been challenging the action and trying to stop Fletcher declaring him bankrupt by repaying parts of the debt.

This year the Fletcher Construction Group served a creditor's application for an adjudication order or bankruptcy.

Binns said then the sum sought was $846,000.

The litigation began last year when demands for payment were made to McKenna's Melview Featherston Street over the final amount for building the 280-room, 17-level hotel. Initially, Fletcher wanted $1.7 million and won legal action.

At a district court hearing in Auckland in April 2009, Graeme Christie of Simpson Grierson represented Fletcher and won an order to enforce a Building Disputes Tribunal determination made by adjudicator and barrister John Walton.

Fletcher won security over titles to 18 hotel rooms at the Holiday Inn.

Most of the rooms have been sold to investors, many in Asia.

Christie yesterday said Fletcher was now a "step closer to bankrupting" McKenna.

He said further proceedings would be filed at the High Court at Auckland in the next few days.