BURLINGTON — A subsidiary of Mount Snow's new parent company showed interest in buying snowmaking equipment at the Hermitage Club at Haystack Mountain, triggering parties involved in a bankruptcy process to seek a sale.
Vail Holdings Inc. — whose parent company is Vail Resorts Inc., which last month acquired Peak Resorts Inc., the parent company of Mount Snow and 16 other ski resorts across the northeast and midwest — is referred to in new court documents as the "stalking horse." The phrase is used for a bidder who will help ensure a bankruptcy auction does not have unfavorably low bids.
On Wednesday, United States Bankruptcy Judge Colleen A. Brown approved a motion to schedule a hearing to shorten the notice needed for approving bid procedures for the sale of the equipment. A hearing regarding that and other aspects of a sale will be held Oct. 11 at the U.S. Bankruptcy Court in Rutland.
Brown also approved a sale agreement between Berkshire Bank, which foreclosed Hermitage properties last year after the group failed to make payments on more than $17 million in loans; Lakeland Bank, which is owed more than $720,730 for a loan the Hermitage took out for snowmaking equipment at its private ski resort at Haystack Mountain; and Chapter 7 Trustee Raymond J. Obuchowski, who has been assigned to oversee the Hermitage bankruptcy case.
The three parties want court permission to sell 41 snow guns and related equipment "free and clear of liens, claims, encumbrances and other interests ..."
While other litigation involving the Hermitage has been put on pause as part of an "automatic stay" triggered by bankruptcy filings, Lakeland Bank was granted relief from the stay in August. The bank will need to approve the terms and price for the sale.
"The Equipment will not be sold as part of a package with Debtors' other assets unless Lakeland Bank consents in advance," the proposed agreement says.
Under the agreement, Lakeland Bank will provide $20,000 and 10 percent of any proceeds in excess of $365,000 to Hermitage Inn Real Estate Holding Company LLC "to be used for costs of administration and payment of valid claims." The bank also would pay Berkshire Bank $10,000 for any lien dispute between the two banks "relating to the accessories and related equipment, and for the assistance of the Receiver, through the property management, for the showing of the collateral for sale ..."
Alan Tantleff was appointed as receiver by the Windham Superior Court, Civil Division to preserve the foreclosed properties.
Obuchowski wrote that Vail Holdings' bid "contemplates a quick sale" and warrants an emergency hearing on the matter.
"A delay in addressing sale procedures as to lose the proposed sale, greatly reduces the incentive of the primary lender, Lakeland Bank, to proceed with a 'carve out' for the benefit of the Estate, and its unsecured creditors," he added.
Moving forward with a hearing, Judge Brown wrote in an order, "is in the best interests of the Estate, creditors and other parties in interest, and is a proper exercise of the Trustee's business judgment."
A Mount Snow spokesman declined comment, and a Vail Resorts spokeswoman could not be immediately reached by email.
Haystack and Mount Snow had once been sister mountains. Mount Snow LTD acquired the Haystack resort in June 1994 and owned it for about a decade, according to land records.
American Ski Company, Mount Snow's parent company before Peak Resorts, sold the resort at Haystack to a group owned by Robert Foisie in March 2005. Hermitage founder Jim Barnes' group, Hermitage Inn Real Estate Holding Company LLC, purchased it in October 2011.
Reach staff writer Chris Mays at firstname.lastname@example.org, at @CMaysBR on Twitter and 802-254-2311, ext. 273.