I would think that even with Foreclosure the workers could still run the place if allowed. But who knows!

But wanted to be first to say move the thread to miscellaneous!

vonski wrote:

I would think that even with Foreclosure the workers could still run the place if allowed. But who knows! But wanted to be first to say move the thread to miscellaneous!

As menmtioned in the link this is the second go around for Intrwest in that a few years ago Intrawest was ready to go belly up and it was swallowed up by Fortress, a big private equity firm. At that time questions were raised regarding whether Whister's ability to host the alpine events become shaky.

As you might expect Fortress has been having their own financial problems for the past year and a half. Basically, Intrawest has been simply a division of Fortress since the takeover and with Fortress's need for cash Intrawest has been operating with a cloud over it's head financially speaking for awhile.

In addition, the debt that Fortress absorbed, mentioned in the link is compounded by the debt it took over from Intrawest's purchase of Steamboat from ASC for around 253m. Alot of the unusually high price that Steamboat sold for included alot of real estate at the base. Can you say bad timing.

Ironically, the Muellers who recently sold their two resorts(Okemo, Crested Butte) to CNL Properties with a lease back, was all set to buy Steamboat and was pushed aside at the last minute as ASC liked the Intrawest offer much better. They were so pissed that they sued ASC over losing the purchase of the Boat, not once, but twice, and lost both times. Then they bought CB.

Bottom line, the Canadian government and others,will step in to make sure the Olympics are not effected. As far as the other Intrwest resorts like Stratton and Mountain Creek, they could be sold sometime down the road.

Quote:

But wanted to be first to say move the thread to miscellaneous

I agree.

The other shoe is starting to loosen up..........funny they mention Lehman Brothers, the first financial giant of Wall St to fall and which sounded the alarm that forced Paulsen and Bernanke to act and come up with the TARP fund, the fund that provided the other Wall St firms loans secured by the American taxpayers. I think the financial ghost of Lehman also was involved in the demise of the Yellowstone Club.


VANCOUVER, British Columbia (Jan. 20) - Lenders have seized the assets of Intrawest ULC, including the Whistler ski resort that will be home to the Olympic downhill races next month.

A public notice has been posted in newspapers by the company's lenders, which include Lehman Brothers, saying that an auction to sell the assets will be held Feb. 19, right in the midst of the Olympics.

Vancouver-based Intrawest is owned by New York private equity firm Fortress Investment Group LLC. Intrawest reportedly missed payments last month that were due on a $1.4-billion loan.

Intrawest has been struggling with financial problems.

An official with Vancouver's organizing committee says the group has no comment on Intrawest's finances

One thing that is very clear. A cyclical business like the ski business can not be highly leveraged. It was the corporate structure of ASC that caused the problems - not the operating companies. The same seems to be true with Fortress and some others. Some may think we are too cautious with our expansion plans, but we believe that the long term sustainability of Sugarbush depends on the right capital structure among other things. In a couple of weeks, we will have completely repaid the Clay Brook construction loan and that provides us great flexibility going forward.

win wrote:

One thing that is very clear. A cyclical business like the ski business can not be highly leveraged. It was the corporate structure of ASC that caused the problems - not the operating companies. The same seems to be true with Fortress and some others. Some may think we are too cautious with our expansion plans, but we believe that the long term sustainability of Sugarbush depends on the right capital structure among other things. In a couple of weeks, we will have completely repaid the Clay Brook construction loan and that provides us great flexibility going forward.

Not only did fortress vastly overpay for intrawest, but they relied on short term credit facilities which required them to refinance in the midst of the credit crisis. Not a good combination.

As the owner of a small business, I appreciate the conservative approach SV has taken. Does "great flexibility" mean work on the LP village will commence this spring????

win wrote:

In a couple of weeks, we will have completely repaid the Clay Brook construction loan and that provides us great flexibility going forward.

A mortgage burning bonfire?

It seems that a lot of ski companies aren't interested in making money by running a ski area, they want to sell real estate. If these ski companies are borrowing huge amounts to buy real estate, what's the business model? Once they sell all that property, how do they make money after that? ...assuming the can pay off their creditors long enough to answer that question. Is sugarbush going to make money via Clay Brook or is that just a way to increase beds in the valley and therefore, increase skier visits?

BTW, good work Win on not leveraging the whole place to build CB. I think you should have a mortgage burning party. You've got the fire pit for it.