Exclusive: Contractor on stalled £1bn tower may seek winding up order as deadline for payment nears
The owners of the stalled £1bn Pinnacle tower have been ordered by the High Court to pay Brookfield Multiplex £16m, after they failed to file a defence against the contractor’s legal claim for unpaid fees.
As first revealed in Building last month, Brookfield launched the legal claim against the owners of the Pinnacle in a bid to recover four separate interim payments for work undertaken under its £593m building contract for the 63-storey tower, which, if built, would be the tallest in the City of London.
Brookfield, the main contractor on the project, had lodged two parallel claims in the technology and construction division of the High Court against the three special purpose vehicles that own the development on Bishopsgate: the first for £14.95m against The Pinnacle No 1 Ltd; the second for £15.58m against The Pinnacle Holdings Ltd and The Pinnacle Ltd.
The scheme is majority-owned by SEDCO, a Saudi Arabian investment manager, with a Sharia-compliant fund managed by Pramerica also owning a stake. The project is being developed by Arab Investments, the property company set up by Kahlid Affara.
Last month, counsel acting for the defendants applied to the court for an extension of time to file their defence, but this was dismissed by the judge.
The defendants then failed to file a defence and on 8 October in a default judgement, seen by Building, the judge ordered the defendants to pay Brookfield the amount claimed, plus interest.
For the first defendant – The Pinnacle No. 1 Ltd – this amounted to £15.51m plus costs and for the second and third defendants – The Pinnacle Holdings Ltd and The Pinnacle Ltd – this amounted to £15.73m plus costs.
It is understood that the deadline for payment of either amount is due at the end of this week and that – should the amount not be paid – Brookfield’s next move will likely be to initiate insolvency proceedings against the owners.
Brookfield’s efforts to recover payment are complicated as the companies it is pursuing are understood to be registered in Anguilla, in the Caribbean.
The developer Arab Investments, which represents the owners, and Brookfield both declined to comment.
The court order is the latest in a long line of troubles to hit the Kohn Pedersen Fox-designed Pinnacle tower. It comes nearly a year after construction work on the tower halted, when the client was unable to secure finance to continue the project. It was the second time construction had been forced to halt, after an earlier delay in 2011.
The core of the 288m-high tower has been built to seven storeys and Brookfield has vacated the site entirely and removed all its livery – a move that is understood to be driven by embarrassment at being associated with a project now known as “the stump”.
This week one of the lead architect’s on the scheme, Lee Polisano, who worked for KPF but has started his own practice PLP, said he doubted the tower would ever get built in its current form.
“A building of that sort is a difficult building to make financially, so I am not surprised to see something so ambitious being stopped,” he said.
“My own belief is the building that gets built will probably be a different building to that there at the moment.”