Amid bankruptcy, bank wants snowguns sold
RUTLAND — A bank that loaned money to the Hermitage Club for snowmaking upgrades at the private ski resort at Haystack Mountain wants to sell the equipment soon.
Lakeland Bank of New Jersey is requesting an order granting relief from the automatic stay that put a hold on legal proceedings related to the Hermitage since bankruptcy petitions were filed in May. A stay stops creditors from collecting debts from the party who declared bankruptcy.
The bank said it loaned the Hermitage $900,000 to buy snowmaking equipment, including 46 snow guns, in February 2016. The Hermitage has not made payments since December 2017 and about $720,730 was still owed as of July 1, according to an affidavit.
The snowmaking equipment was appraised at $365,000 last July, wrote attorney Heather Z. Cooper of Facey Goss & McPhee in Rutland.
"A comparison of the appraised value of the collateral with the balance due to Lakeland Bank demonstrates that the debtor does not have equity in the collateral," she said.
Cooper cited United States Bankruptcy Code that allows for an interested party to seek relief from a stay "for cause, including the lack of adequate protection of an interest in property of such party in interest."
"Lakeland Bank has not been paid pursuant the terms of the contract," Cooper wrote. "The collateral is declining in value as it ages. Interest and late fees continue to accrue on the unpaid obligation."
Cooper said the Hermitage failed to insure the equipment as required under the contract.
"The record of this case demonstrates that the debtor does not have the intention or ability to reorganize," she wrote. "Since the debtor does not have equity in the collateral and since the debtor is not capable of a reorganization, Lakeland Bank is entitled to relief from the automatic stay ..."
Cooper contacted opposing counsel and the parties failed to come to a resolution, according to the motion filed for relief from the stay. A hearing on the motion is scheduled for 11 a.m. Aug. 23 in U.S. Bankruptcy Court in Rutland.
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