Manager Phil Kerr, who has run the tavern beside the railway station for seven years, no longer has a formal lease for the business, but operates it under a tenancy agreement, while the receivers are looking for a buyer for the rail operation.
The package includes the well-known Kingston Flyer steam train, along with the tavern, railway tracks, yards, workshop, Fairlight station, rail corridor, four development blocks and three vacant sections.
Mr Kerr told the Otago Daily Times he would like to hand the tenancy agreement over to chef Sonia Stewart, whom Mr Kerr said was interesting in taking over the business.
The deal had been halted as they had not by Friday got an acceptance of the deal from the receiver.
"We have asked for a lease for a long time, but we keep getting stonewalled," Mr Kerr said.
The steam train's owner, Kingston Acquisitions Ltd (KAL), was placed into receivership by mortgagee Prudential last November, and its assets were put up for sale in December.
Seven months after the international tender was announced, the train still has no buyer.
The receiver's second report showed the company owed Prudential $4.73 million as well as owing unsecured creditors a further $160,000.
Mr Kerr said the future of the tavern would be up to a new owner of the assets.
Throughout the receivership he said the locals had remained loyal to the tavern.
"By keeping it running, we have basically been looking after their assets," he said.
He says he has been doing his best to work with the receiver, but his main concern is the old steam train.
"The most frustrating thing has been to see the train just sitting there, collecting dust.
"After all the work and money we put into keeping it in good condition, it is quite simply a disgrace," Mr Kerr said.
