Members OK deal to bring back ski resort
"Overall, I am pleased with the results, as the majority voted in favor of the plan," Harper Sibley, company president, wrote Wednesday in an email to members.
Out of 525 members, 151 did not vote, according to results shared in his email. And one member said financial projections indicated that more than 400 members would need to pay their dues in order for the project to work and they would collectively need to spend $4 million during the season. Dues would go from $9,500 last year to $15,000 this year.
Hermitage officials have been trying to put together a "restructuring" package after its private ski resort at Haystack Mountain, a golf course, four inns and several townhouses were foreclosed on by mortgage holder Berkshire Bank in February. Hermitage properties also were closed down by the Vermont Department of Taxes the following month for failure to make tax payments.
Oz Real Estate of New York City is expected to commit more than $50 million to company "restructuring," and a board of directors will be created with two board members appointed by Oz, two appointed by Hermitage founder Jim Barnes and four appointed by club members, according to the club member. Barnes would no longer own the majority of the company under the plan; Oz would own 30 percent, members would own about 41 percent, Barnes would own 27 percent, and vendors and contractors could convert debt to about 1 percent.
Sibley called the members' feedback "very helpful" as his team reviews its next steps with lenders, advisers and representatives from Oz.
"We will continue to work with this information over the next several days as we formulate a final plan for membership review," he wrote. "To set expectations, please understand that these meetings are comprehensive and do take time and we would project to have more information for the membership to review by Monday."
Sibley said members were asked whether they support the restructuring via a non-binding straw poll, which had been done electronically over the long weekend.
"Even more importantly, 85 percent or $78.7 million of the investment capital voted in favor of the conversion," wrote Sibley, referring to three groups previously created for Hermitage investments.
His email says that members of the $100,000 Club who invested $100,000 at a clip for a combined $23 million said yes to the plan and another set who contributed $8.5 million collectively said no. The group who helped purchase the Barnstormer chairlift, whose members invested a combined $2.1 million, supported the plan. Investors who provided a total of $3.9 million did not. The group who bought secondary memberships in the form of a five-year loan had members who invested a combined $3.1 million in support, and members who invested a total of $2.3 million did not.
The club member said support from about 80 percent of each group of investors would be needed to move forward according to financial projections provided by the company, and that did not appear to happen. The idea, the member added, is to replace large amounts of debt with equity or ownership in the company.
The voting results show Barnes' debt to be about $54 million. Overall investment in debt conversion is said to be about $78.7 million with him and $28.6 million without him.
Sibley did not respond to an email for comment by press time.
There is a hearing scheduled for Oct. 25 in Windham Superior Court, Civil Division to discuss reports submitted by the receiver appointed by the court to preserve properties under the Berkshire Bank foreclosure.
Reach staff writer Chris Mays at email@example.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.
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