Eyeing summer season, Hermitage officials call for 'cooperation'

Hermitage Club President Harper Sibley asks the Wilmington Development Review Board for a permit extension to build a condominium hotel on Oct. 1, 2018.

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DEERFIELD VALLEY — Hermitage Club officials are now focused on summer operations, according to the latest correspondence to club members.

"During this period of reorganization, we will have funding and will be operating the club on a limited basis with the focus to prepare for the summer season and begin heavy preparations for the winter season," Hermitage founder Jim Barnes and club president Harper Sibley said Saturday in a letter to members. "We understand everyone's sense of frustration for the club not being able to open as was planned and we recognize members want to participate and be part of a governance plan going forward to relaunch the club. We are reaching out to all interested parties to open dialogue as this process begins. We believe it's imperative that we all work together. It's time to bring this club back together for everyone's benefit."

The two Hermitage officials called for the "full cooperation" of towns, local officials, state officials, creditors, employees, members and outside advisors.

"As you can imagine," they wrote, "this process is expensive, and management has sought out the most experienced and capable advisors for this. This investment in professional services is a major undertaking and it's designed to protect all interests in equity with transparency and full disclosure."

The Hermitage officials said their guiding principles in the restructuring process "have and will continue to be to work with all constituents to put this club back together."

"The recent plans to refinance are unfortunately a good example of the challenges the club has faced during this time," they wrote, recalling an earlier effort to reopen ski operations for the winter. "We invested heavily to get this loan commitment including getting a full appraisal and reports completed only to have it fall apart a week before the planned closing. Even though we had all of the due diligence check offs complete, including the appraisal value we needed, the fact that town permits were not extended for the hotel left the lender reluctant to fund without these commitments. Other lending options have failed to materialize for an out-of-court restructuring."

The Wilmington Development Review Board denied the Hermitage Inn Real Estate Holding Company LLC's request to extend a permit a second time late last year. The board cited in its decision recent changes with the company, the new president's lack of knowledge on the application and failure to start the process to get a state permit for the project.

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Barnes and Sibley said they hope to finalize a plan soon that is supported by the court-appointed receiver and the Vermont Department of Taxes.

"This includes a funding commitment during the reorganization period and an exit funding commitment on acceptance of the plan from all of the creditor classes," they wrote.

Alan Tantleff of FTI Consulting released his fourth receiver report this month, saying that Hermitage managers approached him with a plan to reopen for winter operations around December. He said he could not support the proposal at the time and had not received any response after rejecting it. He is tasked with preserving the value of properties Berkshire Bank foreclosed in February 2018 including the private ski resort at Haystack Mountain, the golf course, four inns and several townhouses.

Barnes and Sibley said a reorganization plan is coming soon.

"We have taken great care for this plan to be fair to all and we see this as a cohesive plan of the entire membership and our creditors-along with commitments for new capital," they wrote. "Once we finish the draft disclosure statement this will be circulated to every member so that there is plenty of time for review and comment. The process will allow for creditor committees to be elected for each class and the cost for professional financial and legal counsel to the various member and creditor classes will be paid for out of the funding. We have guidance that this period of reorganization can be completed and approved in four to six months."

Reach staff writer Chris Mays at cmays@reformer.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.