Hermitage facing foreclosure

The Hermitage Club at Haystack Mountain.

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WILMINGTON — The same day the Hermitage Club announced that a long-time official at the company would take the helm, the town received a bank's foreclosure complaint on a number of properties.

"This was fully expected and it is the next logical step in a process that will assist to bring all parties to the table to reach accord," said Meridith Dennes, company spokeswoman, regarding the foreclosures. "We believe it was needed and it will help us reach an agreement that will benefit all stakeholders."

The Hermitage failed to make mortgage payments and pay taxes on properties in Dover and Wilmington, according to a complaint filed by Berkshire Bank. The bank is seeking foreclosure on properties including the Hermitage Inn, Snow Goose Inn, Horizon Inn, the Chamonix Townhouse Village and the Hermitage golf course.

Three notes went into default: A $15 million "base lodge note" signed in December 2014, a $1 million "bridge loan note" signed in June 2016 and a $1.1 million "second bridge loan note" signed in July 2017.

The complaint says a list of parties that "may have or claim some interest in, or lien upon, the mortgaged property" include MR Steel Acquisition Corp., Perkins Home Center, Green Mountain Power Corp., Sysco Albany LLC, and groups employing architects, carpenters, electricians, plumbers, roofers and engineers.

Property taxes due last week were not paid to the town of Wilmington. Checks delivered to the town did not clear, confirmed Select Board Vice Chairman John Gannon, who is also a state representative.

"It is frustrating in that we worked out a payment agreement with the Hermitage," Gannon told the Reformer, referring to plans which typically feature a series of payments in an amount lower than what is owed.

Last week, there were reports that club members were interested in taking over ownership from Jim Barnes, Hermitage founder and former company president. He owns a majority stake of the company.

On Friday, the company announced that Bob Rubin was named as interim president. Previously, his title was vice president of construction and development.

"Bob has been my right-hand man since we reopened the ski mountain together seven seasons ago and he has been an instrumental leader within our organization," Barnes said in a statement. "Having Bob lead the day-to-day operation makes total sense and will allow for me to focus on strategic plans that require my undivided attention."

Rubin is expected to oversee all operations of the Hermitage Inn Real Estate Holding Company, including the private ski resort at Haystack Mountain, the golf course, real estate business, and restaurants and inns. He is known for leading the development of condominiums at Greensprings in Dover.

"I'm glad to be able to offer my experience and management to the Hermitage and look forward to continue working with all of our great employees who have worked tirelessly to make the club a one-of-a-kind place," Rubin said in a statement.

Last week, the Vermont Department of Labor brought a "rapid response team" to meet with employees who lost jobs at the Hermitage. Officials expected to help 50 to 80 people that were let go. The company blamed poor weather and cash-flow issues for the layoffs.

Now, a group of employees on H2B visas will no longer have jobs with the Hermitage.

"We have met all of our contractual obligations," Dennes told the Reformer on Sunday. "Due to business restructuring, the workforce is being rightsized to match operations. All employees have housing until they leave the country or secure their next employment. We are working with each employee to ensure so."

Dennes said the resort was open Sunday with "business as usual."

Rep. Laura Sibilia, I-Windham/Bennington, called information regarding the company's current status "troubling."

"I have been in touch with local, regional and state officials about the ongoing situation," she wrote to constituents in an email newsletter Friday. "Rep. John Gannon and I remain in frequent communication regarding varied employee, municipal, business and member concerns. We are in touch with local, regional and state officials to ensure there is an accurate understanding of impacts those individuals and entities are facing and what possible assistance may be available. We understand that some individuals and businesses may hesitate to seek assistance due to privacy or other concerns."

Sibilia urged former employees and affected business owners to reach out to their legislators, the Southern Vermont Deerfield Valley Chamber of Commerce or the Dover and Wilmington economic development offices.

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

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Since COVID-19 makes it difficult to convene Coffees with the President, if you have a question or a comment about The Eagle, send it to company President Fredric D. Rutberg at frutberg@berkshireeagle.com