The business, innovation and employment ministry is taking high-profile property developers the Chow brothers to the High Court over an insolvent company transaction.
The Wellington-based brothers are widely known through their investment in strip clubs and brothels, including Il Bordello and Splash in Wellington.
John and Michael Chow are also behind a planned "super brothel" opposite Auckland’s Sky Tower, on the site of the demolished historic Aurora Hotel, which developed fatal cracks in its walls during refurbishment in 2010.
The decision to take the pair to the High Court relates to a transaction made between their companies Chow Group and Wellington’s Just Hotel Ltd.
It took place around the time the Willis St hotel was sold in 2008 and put into liquidation the following year.
A former manager, James Jesudhass, was awarded nearly $120,000 in costs after taking the brothers to the Employment Court, claiming he had been unfairly dismissed.
Ministry spokesman Britton Broun told NBR ONLINE the official assignee had written to the Chow brothers asking for them to set aside the undisclosed amount for the insolvent transaction. However, they wrote back, objecting.
He says that as a result papers will be filed with the High Court within the next month.
Mr Broun says even if the court action is successful, it does not necessarily guarantee Mr Jesudhass will receive any money.
If it is, the transaction will be handled by the official assignee, who will divide the money between creditors.