More trouble in paradise

A sixth company associated with an exclusive Coromandel resort is facing the prospect of liquidation.

The Inland Revenue Department has applied to liquidate Investment Holdings (Pauanui) Ltd, the owner company of the luxury Lakes Resort in Pauanui.

The move follows the liquidation of Lakes Restaurant and Bar Ltd, Lakes Resort Services Ltd and Villa Management Ltd (formerly Lake Resort Villas Ltd).

Lakes Resort Golf and Country Club Ltd and Pauanui Lakes Properties Ltd were spared when the High Court at Auckland granted an adjournment until May 1 in the hope parties involved would reach an arrangement.

The companies' directors, Richard Herbert, Trevor Toohill and Gary MacDougall, maintain the complex is not in serious difficulty and the debts will be sorted out.

Toohill said Investment Holdings' debt was a "very minuscule" $40,000 compared to the resort's $14 million value, and he was surprised to see the liquidation application advertised in a daily paper on Thursday.

"It's not going to be allowed to be wound up, that's for sure." .

The directors have been bullish about the prospects of the resort's survival. After a court hearing on February 30, Toohill said the total debt was "less than $140,000". But liquidator Dennis Parsons of Hamilton's Indepth Forensic said the proceedings were "a significant indicator of financial distress".

The complex, which comprises an 18-hole golf course, restaurant and function centre and dozens of unsold sections and villas, has been in trouble before - it was placed in receivership twice, in 2001 and 2002.

"The signs are not very good," said Parsons."The IRD doesn't take these steps unless it's serious." Lakes Restaurant and Bar owed more than $200,000 to IRD, said Parsons. He was concerned about the sale of the business to Legends Restaurant, a company set up last year by Herbert, MacDougall and Toohill.

Lakes Restaurant and Bar is also thought to be in serious debt to unsecured creditors.

Toohill said debts will be settled and preserving the 36 jobs at the complex was a priority.

The resort is listed for sale on the Bayleys website.

The liquidation application for Investment Holdings Ltd is set to be heard at the Auckland High Court on March 18.