BRATTLEBORO — With hopes of reopening private ski resort operations at Haystack Mountain this winter, Hermitage Club President Harper Sibley told members his team is continuing to work with New York-based Oz Real Estate on getting terms of a restructuring deal ready for members by Friday.
"In addition, we are also finalizing terms with the secondary lender on the additional collateral and will expect to provide an update at the end of the week," he wrote to members Monday in an email obtained by the Reformer.
Hermitage officials have been trying to put together a "restructuring" package after its private ski resort at Haystack Mountain, a golf course, four inns and several townhouses were foreclosed on by mortgage holder Berkshire Bank in February. Hermitage properties also were closed down by the Vermont Department of Taxes the following month for failure to make tax payments.
Under the plan proposed to members, dues would go from $9,500 last year to $15,000 this year. Oz would commit more than $50 million to company "restructuring" where a board of directors would be created with two members appointed by Oz, two appointed by Hermitage founder Jim Barnes and four appointed by club members. Barnes would no longer own the majority of the company; Oz would own 30 percent, members would own about 41 percent, Barnes would own 27 percent, and vendors and contractors could convert debt to about 1 percent ownership.
Included in Sibley's latest email were four "letters of support" and answers to frequently asked questions. Members had wondered how the project would move forward with only 209 members voting to do so when more than 400 were needed according to financial projections provided to members before the vote last weekend.
"That threshold and others are a component of the term sheet conditions which are non-binding and subject to change and renegotiation," Sibley wrote. "The vote was a non-binding straw poll."
He said terms of a final transaction will need to be formalized then reviewed by members and their counsel before being formally accepted. He said Hermitage officials assumed those who did not vote would support a final plan.
Last weekend saw 160 members voting against the plan and 165 not voting at all, according to emails to members. Sibley previously told members he was "pleased with the results, as the majority voted in favor of the plan."
Some members also questioned whether the majority of capital investors voted in favor of the restructuring package. Sibley said not all of the investors voted and offered a correction to the previously reported calculation.
"The total capital that did vote was $86.7 million of which $71.3 million voted in favor which is 82 percent," he wrote, providing a percentage of capital investment favorable to making the deal feasible according to financial projections. "The overall total debt invested, including interest, is $95.8 million. If you calculate the results from overall capital then $71.3 million or 75 percent voted in favor, $15.4 million or 16 percent voted opposed and $9 million or 9 percent didn't vote."
Addressing what one member called "a particularly negative result" — the vote from members then the Barnstormer group, one of the three investment groups made up of members overwhelmingly rejecting the plan — Sibley said that group has been offered a counter proposal to be considered by the lender. He called the revised proposal "very fair" and agreeable to other members.
Club members Ashleigh Banfield and Chris Haynor described the ski resort "a unique and enriching family experience."
"We would like to extend our sincere appreciation for all the hard work you and your team have invested this summer into crafting a workable plan to ensure the club opens and operates this coming season," they wrote to Sibley, according to the email.
Club member John Maher thanked Sibley for turning the Hermitage around, according to the email, and club member Shaun Golden wrote that his family is "both eager and optimistic of the club moving forward with a successful coming ski season."
Reach staff writer Chris Mays at cmays@reformer.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.
