THE Hyatt Regency Coolum Golf Resort and Spa will run out of working capital in the next fortnight, throwing into doubt the jobs of 650 staff and increasing the likelihood that creditors will go unpaid.
A creditors meeting at the resort on Monday heard that billionaire owner Clive Palmer would guarantee the jobs of staff and payment of 100 cents in the dollar to creditors, but not until the Hyatt Corporation left the property.
The news comes as court documents allege the resort had accumulated trading losses of almost $570 million since it opened in 1985.
The attorney for the Hyatt, Tony Ryan, made it clear yesterday that the Hyatt also wanted a new owner.
Mr Ryan said Mr Palmer was responsible for the current uncertainty.
"He has put a lot at risk," he said.
"When Mr Palmer bought in mid-2011 he did extensive due diligence. Finances have been impacted since 2009. This is an old resort that needs invigoration. Mr Palmer bought aware of all things."
Among those things was a management contract with Hyatt that extends to 2037.
William Schoch, Mr Palmer's representative at the meeting, and a Coeur de Lion director, said there was no opportunity at purchase to renegotiate the agreement.
"Mr Palmer has no intention to sell or put the resort into liquidation," Mr Schoch said.
"All that's needed is for the Hyatt to exit gracefully at a price."
The Hyatt is believed to want full payment of management fees it would forego through to 2037, while Coolum Resort Pty Ltd wants $70 million, plus interest, for alleged breach of contract by the Hyatt during the past 27 years.
In the eight months Mr Palmer's company has owned the resort he has needed to tip in nearly $8 million to keep it afloat.
Voluntary administrator Ginette Muller, of KordaMentha, told the meeting the resort was insolvent.
Unique opportunity to purchase a well designed and well priced family home in Noosa Waters. A private sanctuary, this lovely home flows effortlessly and has more...
Join the Community.
Get your local news, your way.
Update your news preferences and get the latest news delivered to your inbox.