More offers arrive for Hermitage assets
WILMINGTON — At least two more groups have stepped forward to announce their desire to purchase the former private ski resort Hermitage Club, according to bankruptcy court documents.
AW Realty LLC's HSM Partners LLC of Delaware said it submitted a letter of intent to buy the resort, golf course, three inns and a six-person bubble chairlift known as the Barnstormer for $8 million. Hermitage Club Member Group Inc. of Delaware, described as a group of shareholders led by a board of directors who were former Hermitage members, said it plans to offer $8.25 million for the assets.
The revelations were made public Tuesday in response to proposals outlined in documents filed earlier this month in United States Bankruptcy Court for the District of Vermont. Rainmaker Mountain LLC, connected to Geyser Holdings LLC headquartered in California and Hawaii, offered $4 million for the resort, golf course and inns. And Boyne USA Inc. offered $3.6 million for the Barnstormer.
AW Realty described its offer as "a single transaction that provides more value to the debtors' estates and removes the uncertainty and risk inherent in the conflicting bids ..."
The group of club members said it is raising money and would like to see the auction pushed back from Feb. 25, the date the Chapter 7 bankruptcy trustee has proposed.
"Far from a 'pipe dream,' the Member Group is currently supported by 142 members, each of whom has subscribed for a share with a purchase price of $50,000 ($7.1 million in aggregate funding," state court documents. "From the Member Group's perspective, the proposed accelerated schedule impedes their ability to conduct due diligence on the debtors' wide-ranging properties and numerous liabilities, formulate a proper asset purchase agreement, and submit a bid that will dramatically simplify the trustee's proposed sale structure."
Other parties involved in the case also have differing ideas about how to proceed. A Jan. 31 hearing in Rutland will determine the path forward.
Boyne, which owns and operates 10 ski resorts in North America, said it intends to relocate the bubble chairlift known as the Barnstormer to a ski area it has in northern New England. The company called it "impossible" to commit to removing the lift earlier than Aug. 31 as Rainmaker wants the equipment offsite by June 30.
Boyne anticipates it will take 60 to 90 days to obtain permits for the project, according to a court document. The company said prior permitting at the mountain prohibited work at higher elevations from May 15 to July 31.
"Boyne submits that unless Rainmaker has already ordered a new lift to replace the lift equipment, there is little or no chance that Rainmaker can order and install a new lift in time for the 2020-2021 ski season, even if Boyne could remove the lift equipment by June 30," state the court documents. "Boyne can only conclude that Rainmaker's insistence on a June 30 deadline is intended to scuttle the sale of the lift equipment to Boyne and discourage other bidders, thereby enabling Rainmaker to buy the lift equipment at a reduced price."
Berkshire Bank objects to a section of an agreement between parties saying that if another buyer comes forward, Barnstormer Summit Lift LLC must approve the buyer and terms. Berkshire Bank filed a foreclosure complaint against the Hermitage in 2018 and is owed more than $22 million, according to court documents. The Barnstormer group is made up of former club members who invested in the chairlift.
"If a potential bidder submits a Qualified Bid for a joint sale of the assets (which as noted must be on the same terms and conditions as the individual sales) and submits a bid at Auction that provides for a greater benefit to the estate ... then neither secured lender should be able to veto the sale at that point," state court documents submitted by the bank's attorney Elizabeth Glynn.
The town of Wilmington is calling for the court to set the deadline for removing the chairlift as soon as possible after the auction. That is "to ensure (in as much as such thing is possible) that the Hermitage Ski Area will be an operating entity for the 2020-2021 ski season," state court documents.
"[T]he Hermitage Resort and its accompanying amenities are major economic drivers for the town ... and its tax base," wrote Edward Adrian, town attorney. "The sooner the Hermitage or its successor entity starts functioning again, the better it will be for the town ... and consequently for the people of the state of Vermont."
The Ad Hoc Committee of Members, a group made up of more than 230 former club members that is permitted by the court to participate in the case, "seeks to promote a disposition of the debtor's assets that will maximize the prospects for the purchaser to return them to their traditional use as a private ski resort club community including a ski area," state court documents. The committee "believes this use is in the best interest of not only its members — many of whom have invested their time and money in the community by purchasing real estate in the area and traveling there frequently with family and friends — but also the wider Deerfield Valley community and economy that has suffered so greatly from the collapse of the debtors."
The committee wants more time in between this month's hearing and the proposed auction date. That would improve the chances of the assets being sold to a buyer who would "keep them under common ownership and continue their traditional use," state court documents.
The committee said the court "should not approve such a compressed schedule primarily because there has been essentially no marketing of the property to date ..." and the process would "unduly" favor the initial bidders. Proposed is an auction and sale hearing in March with a closing in April.
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