The company behind Coronet Peak Hotel, on Arthurs Point Rd, has been placed in liquidation, with the February 22 Canterbury earthquake described as the "death of the business".
The three-star hotel, with 75 guest rooms, was operated by Coronet Peak Hotel Ltd [CPHL], which the Companies Office has flagged as "in liquidation".
It also contains a restaurant, two bars and a Strike Bowl bowling alley.
Liquidators Christopher McCullagh and Stephen Lawrence, of PKF Corporate Recovery and Insolvency, were appointed on Tuesday.
The company was incorporated on November 1, 2006, and its directors are Roger Dold, of Paihia, and David Mercer, of Queenstown. Its shareholders are BDM Enterprises Ltd and Penelope and Roger Dold, each with a 50% shareholding.
The first liquidators' report, dated Wednesday, said Coronet Peak Hotel Ltd operated the hotel from premises it leased from Coronet Alpine Ltd from late 2006 until July this year.
In November last year, CPHL filed a claim against Coronet Alpine for damages suffered because of a lack of maintenance of the buildings.
On March 1 this year, Coronet Alpine filed a statement of defence together with a counterclaim.
The parties agreed on a settlement on June 30, which became effective on July 1.
The liquidators' report said the settlement provided for termination of the lease, the assignment of the chattels and other assets to Alpine, and the payment of $65,000 by CPHL to Coronet Alpine.
"Following the settlement, the company was unable to continue operating as a hotel, as it no longer leased the premises and no longer had any operating assets."
On September 1 a "creditor compromise proposal" was put to CPHL's creditors, which was not accepted.
"As a result, the directors and shareholders put the company in liquidation.
"According to the director, the reasons for the company's failure are ... [it] was [too] dependent on the Korean market, which fell away significantly in 2008 and has never recovered.
"The earthquake in February 2011 was the death of the business. The company suffered significant booking cancellations and the market in general fell away."
The liquidators said the company was also paying an "unsustainable" rental of $600,000 a year, plus rates and outgoings, and "repeated attempts to renegotiate the rent were unsuccessful".
"The condition of the building and in particular the leaking roof resulted in many cancelled bookings and gave the property a bad name."
Mr McCullagh and Mr Lawrence said they had yet to determine why the business had failed. They had frozen the company's bank accounts, they said.
The liquidators gave a "tentative estimation" liquidation would be complete by December next year.
Fifty-seven creditors were listed, with the only preferential creditor as at December 20 the Inland Revenue Department, which was owed about $281,925.
Unsecured creditors, as at December 20, were owed $1,244,665 in total, and comprised trade creditors ($92,846); BNZ term loan ($400,000); BDM Enterprises loan ($15,000); and Dold Trust loan ($736,819).
The company had $71,597 in assets available to preferential creditors, including $10,337 cash.
