Queenstown’s Heritage Hotel is poised to pay $650,000 to a company ultimately co-owned by big bankrupt Rod Nielsen.
The Heritage’s Singapore parent has gained Overseas Investment Office approval to buy villa management rights from Little Rock Management – a company half-owned by a 1999 trust with Nielsen and his family as beneficiaries.
Nielsen’s wife, Sirene Millar, became Little Rock’s sole director after the high-profile developer’s Septem-ber 2009 bankruptcy for debts of $17 million. Little Rock is just one of three sur-vivors from 118 Nielsen companies.
In a letter of support to the OIO, the Nielsen company’s lawyer says the sale to the Heritage stems from Little Rock’s financier demanding its money back.
What’s for sale are management rights to 36 villas Nielsen developed opposite the Heritage on Fernhill Road.
When the privately-owned villas are rented out by the Heritage, Little Rock gets about half of the hefty 12.5 per cent of rental income levied to owners – the other half goes to the Heritage. Little Rock col-
lects $85,000 annually.
OIO paperwork reveals the deal is conditional on villa owners’ approval. Those owners have little love for Nielsen after he left them with a potential $500,000 liability over uncompleted landscaping, a dispute finally settled last month.
When the management rights were first advertised last June, villa owners wanted to stymie any sale – but their lawyer, Wayne McKeague, now confirms he’s negotiating with the Heritage. McKeague won’t say anything more and Heritage boss Carey Norton is on leave.
Auckland Official Assignee David Harte administers the bankruptcy of Nielsen – who lives in Las Vegas with Harte’s permission.
Harte has previously been quizzed over whether money received by Little Rock for the management rights would go to Nielsen’s creditors. No, Harte says, Nielsen’s trust co-owns Little Rock, putting it outside the bankruptcy net.
Harte has previously had accusations from villa owners claiming Nielsen was involved in Little Rock’s tender. An email signed “Rod Nielsen, consultant to Little Rock Management” was cited.
Harte confirmed Nielsen is under investigation for allegedly breaching the Insolvency Act “by being involved in the management of a company” but it’s not known whether that was Little Rock. The investigation continues – and Harte says he can’t say any more.