MONTPELIER, Vt. (AP) — The court-appointed receiver overseeing Jay Peak and other related properties after the ski area's owner was accused of massive fraud using foreign investor's money has reached a $32.5 million settlement with a law firm, according to a court filing in federal court in Florida on Friday.
The settlement with Mitchell Silberberg & Knupp LLP concerns its role in providing legal advice to former Jay Peak owner Ariel Quiros and the projects through the EB-5 visa program, said Michael Pieciak, commissioner of the Vermont Department of Financial Regulation. The deal must be approved by the court.
“This is a significant settlement that will benefit both the Jay Peak investors and help mitigate any financial uncertainty to the ski resorts as a result of COVID-19," Pieciak said in a written statement.
Quiros, former Jay Peak president William Stenger and William Kelly, an advisor to Quiros, were indicted last year over a failed plan to build a biotechnology plant in northern Vermont using millions of foreign investors’ money raised through the EB-5 visa visa program. The program encourages foreigners to invest in U.S. projects that create jobs in exchange for a chance to earn permanent U.S. residency.
Quiros, of Key Biscayne, Florida, pleaded guilty last August to charges of conspiracy to commit wire fraud, money laundering and the concealment of material information. Under the plea agreement, Quiros will serve just over eight years in prison. Kelly pleaded guilty on Wednesday to two charges in a plea deal and faces a maximum of three years in prison. Stenger has pleaded not guilty.
The settlement with Mitchell Silberberg & Knupp LLP was reached after three years of litigation, extensive discovery and two separate mediations, according to receiver Michael Goldberg.
“The settlement results in a recovery to the Receivership Estate of nearly $30 million, from which at least $20 million shall be used for an interim distribution to eligible investors with allowed claims. Needless to say, all Investors and Putative Class Plaintiffs will benefit from this settlement,” states Goldberg's motion for approval of the settlement.
MSK does not admit any wrongdoing as part of the settlement.
“While we strongly contest the claims, we decided to settle this lawsuit to avoid distraction from our core mission and the cost of litigating the matter to success," the law firm said in a statement.