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Bankruptcy could be used as tool to transfer Mount Baldy to new buyer
The Mount Baldy ski resort is not currently in bankruptcy or in receivership, but the marketing agent selling the foreclosed assets of the company doesn’t preclude bankruptcy being used in the future.
“The secured creditors have such a large position and they’re effectively co-operating in what we’re doing,” said Gary Powroznik, managing director of G-Force Real Estate, the company trying to find a buyer for Mount Baldy resort’s assets.
Bankruptcy or receivership could occur, he said, because they are tools that could allow a transfer of the assets to a buyer free and clear of any claims from creditors.
“It’s crucial that we find a way to attract a buyer that doesn’t have to wade through all the insolvency stuff or creditor issues on Mount Baldy, but can buy the assets free and clear and really focus on the future,” said Powroznik.
The foreclosure action was taken by Stark BC Venture, LLC, a U.S. company that is a secured creditor.
In documents issued by the Supreme Court of British Columbia, the creditor is said to be owed more than $4.4 million by Mount Baldy Real Estate, ULC, Winter Recreation, ULC and Mount Baldy Ski Corporation.
The resort, located 35 kilometres east of Oliver, was closed during the ski season of 2013-14 due to the owners’ financial difficulties.
On July 14, the Supreme Court of B.C. granted a conduct of sale to the secured creditor to sell most of the assets of Mount Baldy Ski Corporation and related companies.
The assets include four development lots totaling 44.02 acres of which 22 acres are more than 90 per cent completed; personal property including ski lift equipment; materials contracts including the master plan and development agreement with the province entitling Mount Baldy to develop the resort.
The resort could be a profit-making venture if it is managed prudently, said Powroznik, who said he was involved in the 1980s with another company as the receiver when Grouse Mountain near Vancouver ran into financial difficulties.
“We actually turned it back to the owners and it’s been great ever since,” he said.
It is important, he said, to understand that Mount Baldy is a resort for the local market predominantly, although Osoyoos is a destination for people from Vancouver and Alberta in the summer.
“I think it can be that in the winter, but predominantly these mountains are local, and so what’s really important is to be prudent about what investment you’re making and what expectations you have related to the local nature of the mountain,” said Powroznik.
This means having owners who understand the local real estate dynamics.
“Where most mountains make money is not on the skiing,” said Powroznik. “It’s on the real estate. Often ski resorts and golf resorts don’t make money on those activities. They make the money on the real estate.”
Powroznik said some serious potential buyers have been looking at the assets. He said G-Force believes there should be “a local flavour” to the new ownership group with an understanding of the local nature of this ski market.
“I think it’s important that they feel support from the community because I think that’s an important part of an investor’s attitude,” he said. “It’s important that the community express their interest and support for the mountain.”
Three Idaho entrepreneurs own the companies that have operated the resort. They are Brent Baker, Robert Boyle and Brett Sweezy. None could be reached for comment.
The court judgment with respect to those three was “adjourned generally,” meaning suspended.
Matt Koenig, mountain manager, sent a note to resort users on July 24 in which he expressed hope that a qualified buyer can be found and a sale completed in the timely manner.
“In the meantime, plans are being drawn up for different scenarios including having to prepare for a ski season this year with short lead times,” Koenig wrote.
G-Force Group has said its primary objective is to find a buyer who can complete an acquisition in time to operate the resort for the coming 2014-15 ski season.