From John Miller of the Associated Press:
Bank of America wants its lifts back from Tamarack Resort, accusing the troubled vacation destination of holding the equipment hostage to extract more money for its assets.
In U.S. Bankruptcy Court documents filed Wednesday, the bank’s leasing arm argued it should be allowed to rip the lifts out and sell them to somebody else because they aren’t necessary to Tamarack’s future.
The bank, who owns the equipment, said the lifts aren’t being used for the current ski season that began Dec. 20, demonstrating “the resort is capable of functioning without the ski lifts.”
Squabbling over what’s to become of the two idled ski lifts is emblematic of the complex process of resolving Tamarack’s financial woes, the biggest of which include a creditor group led by Credit Suisse Group that’s trying to recover now more than $300 million in unpaid debts.
Bank of America attorney Brad Goergen said Tamarack majority owner Jean-Pierre Boespflug was holding the lifts “hostage” in order to extract a better price for assets.
Last week, a $40 million offer from Idaho investment group Green Valley Holdings kicked off what could be an auction for Tamarack, but the offer must still win U.S. Bankruptcy Judge Terry Myers’ approval.
“While the lifts may be helpful for a sale or reorganization, helpfulness is not a correct legal standard,” Goergen wrote. “Necessity is the correct legal standard.”
The Bank of America-owned four-person Wildwood lift takes skiers and snowboarders up 1,650 vertical feet, accessing intermediate and advanced terrain; its Buttercup lift shuttles riders from Tamarack’s Whitewater residential development to the slopes.
Boespflug and his partners owe more than $4 million on the lifts after they ran out of cash in 2008, but he insists keeping the lifts, despite missed lease payments, was necessary for a successful reorganization and sale.
“Tamarack is a world-class year-round resort,” Boespflug’s attorney, Randal French, wrote in documents filed this week. “The equipment at issue is critical to maintaining the opportunity to operate as such, and the opportunity to market itself to potential buyers as such.”
Bank of America’s filing comes as Tamarack’s other creditors also used the waning days of 2010 to jockey for position in the bankruptcy case. On Tuesday, Credit Suisse raised objections to Green Valley’s offer, with its attorneys writing to Myers that they don’t believe the proposal “is in the best interests of the debtor’s estate and creditors.”
Credit Suisse and its lender consortium want Myers to convert Tamarack’s Chapter 11 reorganization into Chapter 7 liquidation or send it back to state court foreclosure. In state courts, they want a sale without influence from Boespflug ‹ “in whom (Credit Suisse) and the other creditors have no confidence,” the Swiss bank’s attorneys wrote.
But Green Valley investors said Wednesday a liquidation could doom creditors to getting even less money than they already stand to recover.
“Not only will selling Tamarack piece-by-piece possibly result in a lower recovery for the creditors, it also creates additional uncertainty,” Green Valley founder Matthew Hutcheson said in an e-mail. “Selling Tamarack as an operating business enhances the morale of the community, augments job opportunities, stimulates the local economy and generates local tax and state lease revenue.”