NEWFANE — A court will decide whether a receiver will be appointed to run the Hermitage Club in response to a foreclosure filing, or if the company can use a $26 mill-
ion loan it says it has been offered to continue operations and pay off its debt.
A hearing from Windham Superior Court Civil Division is scheduled for May 10.
"I expect to have a much better update [then] as to the status of the Hermitage's finances in order to be able to give the court its update," Bob Fisher, an attorney for the Hermitage, told the Reformer on Tuesday. "And then with that, my expectation is the court will decide whether or not a receiver is required."
The broad goal of both approaches is to avoid public auction of the properties and keep the Hermitage going, with some restructuring.
Financial struggles have recently plagued the company, and the Vermont Department of Taxes shut down its operations because of missing tax payments.
Berkshire Bank filed for foreclosure in February, after the Hermitage failed to make payments on three loans totaling $17.1 million.
Those properties included the company's private ski resort at Haystack Mountain, the Hermitage Inn, a golf course, Chamonix townhouses, the Snow Goose Inn, the Horizon Inn, the Doveberry Inn, second homes under construction and other properties.
The foreclosure complaint has 35 liens from vendors and contractors for bills and claims the Hermitage could not pay.
A term sheet from Wells Fargo Bank, a non-binding agreement setting forth business terms and conditions, redacted the name of the "financial company" willing to lend the Hermitage $26 million to help pay off its foreclosed mortgage and debts and provide working capital. The document was included in an affidavit filed Friday in support of the Hermitage's objection to Berkshire Bank's motion to appoint a receiver. Mortgage agreements had given Berkshire Bank the right to seek the appointment.
Fisher said he is not at liberty to talk about whether the Hermitage secured a $220,000 bridge loan from the financial company mentioned in the term sheet. That loan was to be paid on or before 36 hours after signing the agreement or no later than Monday. Hermitage founder Jim Barnes and interim president Bob Rubin did not reply to inquiries by email.
"I can't discuss the current status of that loan because other attorneys are dealing with that redacted company," Fisher told the Reformer. "Hopefully, things progress there is all I guess I can say."
Fisher's Brattleboro-based law office filed an objection Friday to the bank's emergency motion on April 17 to appoint a receiver. Hermitage officials estimate it would take 100 hours to get a receiver familiar with the company's assets. They believe local people with knowledge of the properties' history would be better suited for solving issues and that would also protect local jobs.
Fisher expects "a lot" to happen between now and the hearing.
"[We're] trying to gather all the facts for that," he said.
The Hermitage was not in good standing with the Department of Taxes and was not authorized to conduct business as of late Tuesday morning, according to Kate Strousse, executive assistant at the Office of the State Tax Commissioner.
Berkshire Bank marketing officer Elizabeth Mach declined to comment, citing "ongoing legal proceedings."
Reach staff writer Chris Mays at email@example.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.