Bank pitches receiver's role at Hermitage properties
"The receiver shall file monthly reports with the court that explain the services rendered by receiver in narrative form," Elizabeth Glynn, attorney for the bank, wrote in a proposed order filed on Friday. "The report shall be in sufficient detail to allow the court to determine whether the purpose of the services the receiver rendered was to maintain and preserve the subject properties during the foreclosure process."
On May 18, Judge John Treadwell approved the appointment of Alan Tantleff, of FTI Consulting, as receiver. But Treadwell asked the bank to put together a proposed order about the role of the receiver. The Hermitage can file an objection this week.
The idea is to keep the foreclosed properties — a private ski resort at Haystack Mountain, a golf course, the Hermitage Inn, the Horizon Inn, the Smow Goose Inn, the Doveberry Inn and homes at different stages of construction — in the best quality possible until they are sold. But "the receiver shall make no capital improvements to subject projects that are designed to increase or enhance the fair market value of that property without further order of the court," Glynn wrote.
The bank is proposing that Tantleff take possession and control of the properties and all Hermitage business records; provide accounting to the court on a quarterly basis; have access to all mail and email of the Hermitage except when they are privileged attorney-client communications; pay municipal assessments; pay lease payments to municipal entities for the ski area; keep the properties insured; cover heat and utilities; hire a security service; and cooperate with the auction company.
Glynn said Tantleff should not be responsible for preparing the ski resort to open this coming winter unless the court orders him to do so. The bank wants Tantleff to change passwords and signatures on bank accounts; secure the liquor inventory and computer data; clean refrigerators and food; inspect the property and create an inventory; change locks; keep track of personal property left by members and returned; and prepare a budget for the receivership operation.
Tantleff would cancel advance reservations and deposits as necessary.
"The receiver shall have no duty to refund advance deposit," wrote Glynn.
The proposed order calls for Tantleff to oversee labor, landscaping and maintenance at the golf course and other properties. He would "retain and pay employees through payroll necessary to preserve collateral."
The bank also wants Tantleff to meet regularly with local police, fire and rescue officials so they know about the status of the properties.
Tantleff's firm has served as receiver to more than 53 major resort and hospitality properties. In this case, he would get $32,500 for each of the first two months and $16,250 for every month after. The bank will pay the cost but the fees would be added to the amount owed under the mortgage as long as the court agrees to the terms.
Glynn called Tantleff's bid "competitive with other nationally prominent receivers."
"[A]nd were the receiver to bill hourly for his services, his rate would be higher," she wrote in the proposed order. "The receiver does not need to provide an hourly accounting of the services rendered."
Tantleff would be expected to include a list of all expenditures for maintaining the properties, services and paying employees or contractors.
"The receivership will be dissolved upon the payment in full of all secured debt the Hermitage defendants owe plaintiff," Glynn wrote, adding that the bank or the Hermitage may petition the court to dissolve the receivership.
The Hermitage defaulted on three loans totaling about $17.1 million. The company owes more than $12 million to lien holders for services and supplies.
Reach staff writer Chris Mays at email@example.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.
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