A US resort in which developer Paddy Kelly's Redquartz Atlanta Developments (RAD) considered investing has filed for bankruptcy.

RAD held talks about investing $60m in the 1,350-acre Amelia Island resort in Florida, but Kelly himself would not have held a direct interest in the project. The deal would have given RAD a 51% stake in the resort, which has golf courses, private beaches, restaurants and spas.

The deal broke down in May as the finance could not be raised in the time period sought by the resort's owners. They have now filed for bankruptcy but will continue to trade while a group of potential investors puts together a plan to invest in the project. According to local reports, citing court documents, the petition for bankruptcy came because the resort would not have had enough cash to meet its payroll commitments.

Kelly has been hit by a number of bank judgments since the start of the year.