NEWFANE — Officials at the Hermitage Club say an unidentified "financial company" is willing to provide the financially troubled resort a $26 million loan to pay off its foreclosed mortgage and debts and provide working capital.
The potential funding was disclosed Friday in a supporting affidavit in Windham County Superior Court Civil Division, opposing a motion by Berkshire Bank to appoint a receiver for the Hermitage Club. The bank filed for foreclosure in February after the Hermitage failed to make payments on three loans totaling $17.1 million.
In the filing, Hermitage Club officials disclosed that Wells Fargo Bank offered them a term sheet — a non-binding agreement setting forth business terms and conditions — but the identity of the actual lender was redacted in court documents. They said the potential infusion of cash renders the court appointment of a foreclosure receiver unnecessary.
"A fully signed copy of the term sheet for a $26,000,000 loan is in our possession," attorneys from Fisher & Fisher Law Offices in Brattleboro, the firm representing the Hermitage, wrote in the affidavit supporting its objection to Berkshire Bank's emergency motion to appoint a receiver. "We stand committed to have the restructuring succeed."
"[Redacted] 'Finance Company' is the potential name of the wholly owned Loan Company," the affidavit reads. "Currently the funds are held in escrow at Wells Fargo Bank under the trust name of [redacted]."
Berkshire Bank filed for foreclosure in February after the Hermitage failed to make payments on three loans. 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.
Mortgage agreements had given Berkshire Bank the right to seek the immediate appointment of a receiver. An emergency motion to do so was made on April 17.
In its filing, The Hermitage provided a redacted document of the terms with the financial company that say "the existing first mortgage will be transferred to financial company." A closing date would be expected by the Hermitage no later than May 15.
The financial company is willing to make the loan and "take a first mortgage on all assets associated with the company's business and membership ski and golf club" including all real estate, real property, development rights, contract rights, intellectual property and permitting rights and permits and approvals.
"We do not believe we need to waste scarce cash in hiring an out-of-town receiver who will take at least 100 hours to get familiar with the assets of the Hermitage Club," attorneys for the Hermitage wrote. "We believe that protecting the assets with local, knowledgeable people, some who have built these assets from the ground up and have worked here 15 to 20 years, is a better solution and protects local jobs as well."
The buildings and assets of the Hermitage Club are getting "full security tours with daily check points that are conducted by local employees that are part of a team reviewed" by interim company president Bob Rubin, according to the affidavit.
"Every property has been fully secured and cleaned, and is not at risk from elements or other," attorneys representing the Hermitage Club wrote. On April 17, Berkshire Bank officials "performed a site visit and viewed the assets in their current state and found them to be in excellent order."
Hermitage attorneys said Patricia Reinhardt, the company's restructuring officer, "continues to work with us to protect and oversee the finances as we work toward a successful restructuring."
"Our employees are also protecting and readying the golf course including removing the freeze tarps on the greens to protect this valuable asset," attorneys wrote. "The Club is maintaining its essential employees on staff in order to maintain the Club's assets."
Reach staff writer Chris Mays at cmays@reformer.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.
