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spanish Peaks set to go
on sales block
by josePh t. o'Connor
big sky weekly editor
bIG SKY – The Club at Spanish
Peaks may finally be up for sale,
after more than a year of gridlocked
debate and fears of continued
delays or foreclosure by secured
lenders.
Entities owning the club filed for
Chapter 7 bankruptcy in October
2011, and the resort closed at that
time, laying off more than 100
employees. On Dec. 4 of this year,
a lawyer representing some 140
members of a Spanish Peaks ad hoc
group sent an email explaining the
news of the sale.
The secured lenders, consisting
mainly of a consortium of banks,
filed on Dec. 3 documents with
Montana’s bankruptcy court, according
to the email by attorney J.
Thomas beckett. The filing included
a plan to sell The Club at Spanish
Peaks to the highest bidder.
“The car is out of the garage,” said
a member of the ad hoc group’s
12-member steering committee,
who wished to remain anonymous.
“After a year, we finally have a
process outlined.”
This process, described in court
documents attached to the email,
highlighted agreements between
Ross Richardson, the Chapter 7
trustee, and the secured lenders. It
included an estimated timeline that
set June 1, 2013 as a closing sale
date.
The lenders recommended appointing
Eastdil Secured, an international
real estate investment company
based out of New York City, to market
for and represent the property
moving forward. The bankruptcy
court approved Eastdil on Dec. 6,
and interested parties have two
weeks to file an objection, according
to court documents.
Eastdil will begin sending out teasers
to potential buyers in January.
This list, or pitch book, will include
between 100 and 200 interested
parties.
“we don’t know who is going to
bid on this,” the steering committee
member said, adding that hedge
funds and some wealthy individuals
will be listed in the pitch book.
Individuals in the Spanish Peaks ad
hoc group, who each paid $1,000
to fund legal council and to keep
abreast of developments, want to
have a say in who walks with the
final purchase.
“we want a viable club,” the source
said. “That’s what people bought
into.”
Ad hoc members anticipate fewer
than five serious bidders by the
proposed bid deadline in mid-february.
Richardson, the trustee, is
expected to select the best offer in
early March.
The face value on the Spanish Peaks
debt is more than $122,000,000,
and the club will go to the highest
bidder, but if a potential client approaches
lenders with $20 million,
cash in hand, they will accept it,
according to the source.
because of longstanding issues
surrounding the bankruptcy, “[the
secured lenders] are willing to take
their lumps.”
The $20 million was set as a floor
price and, according to court documents,
Richardson will receive a
$750,000 “carve out” from the
secured lenders once a sale is finalized.
The carve out will come out of
the total sale of the property, and
will pay court and lawyer expenses
and administrative costs, as well as
Eastdil for its work initiating a sale.
If the property sells for more than
$20 million, secured lenders will
add 2 percent to any additional sale
money to go toward the carve out.
If no one bids at least that much,
the lenders can accept the lower bid
or retain the property.
News of the potential Spanish
Peaks sale is a relief to many involved
in the process.
“This [sale] could have been three
or five years [out],” the source said.
“It’s nice there is a resolution [coming].
It may not happen until next
October, but at least there’s light at
the end of the tunnel.”
This is an ongoing story in the
weekly, which will feature subsequent
installments as information
becomes available.
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