THE troubled Martha Cove marina and housing complex at Safety Beach has been dealt another blow with receivers and managers being appointed to City Pacific, one of the companies behind the $650million project.

Financial services company City Pacific created Martha Cove developer CP1, which also owns 25per cent of shares in co-developer Indigo Pacific.

The Commonwealth Bank called in receivers and managers PPB after City Pacific was unable to pay debts of more than $100million.

A receptionist working for CP1 last week said there were no staff in the office to handle inquiries and that she had lost her job after 18 months.

A trading halt has been placed on shares of City Pacific and Indigo Pacific.

In September last year, Indigo managing director Mitch Nielsen said work would start on the $75million retail 'heart' of Martha Cove in the first quarter of this year and it would be finished in late 2010.

The receivers and managers were appointed last Monday week following a court decision handing control of a mortgage fund to Balmain Trilogy.

PPB receiver and manager Ian Carson has told The Age that City Pacific was unable to service debt.

Building company Pearl Hill Pty Ltd is also locked in a court battle with CP1 over a $15million housing deal at Martha Cove.

Pearl Hill says it has built about 50 of 69 planned homes, which were to be marketed by CP1. Last September, Mr Nielsen said CP1's problems were not affecting Indigo.

Keith Platt