New West’s update last night was true….see the latest press release from Promontory:
CREDIT SUISSE ELECTS AUCTION PROCESS FOR PROMONTORY
~ Approved U.S. Bankruptcy Court reorganization plan anticipated this option ~
PARK CITY, UTAH, Mar. 20, 2009 – The Promontory chapter 11 case moved another step closer to completion yesterday, as Credit Suisse, the Agent for Promontory’s first lien holders, elected not to exercise its first right to provide $70 million in Court mandated exit financing. This election was permitted under the March 12, 2009 reorganization plan approved by the U.S. Bankruptcy Court, and it triggers an auction among Credit Suisse and other qualified parties to determine which of them will own Promontory upon its emergence from bankruptcy in April.
The auction, scheduled for April 15th, 2009, is preceded by a period in which bidders must submit initial bids to be pre-qualified by the court on or before April 13. Following the April 15 auction, the Bankruptcy Court will hold a hearing, on April 17, to evaluate competing bids and determine the winning bidder.
The winner of the auction will be bound to observe key provisions of the Court-approved reorganization plan and sale procedures. These provisions include the new owner’s obligation to honor Promontory’s County-approved master plan, the Promontory Club’s membership agreements and membership plan and the assumption of all lot purchase agreements with Promontory lot and home owners. In addition, provision will be made for funding of legitimate unsecured creditor claims and creation of a reserve fund for Promontory’s homeowners’ association, the Promontory Conservancy.
Rich Sonntag, Promontory Managing Director, noted, “This auction process was always a possibility in the event Credit Suisse decided it might not want to control Promontory itself, and was specifically provided for under the reorganization plan that the Bankruptcy Court approved on March 12. The auction allows other parties who are more directly involved in the development business to bid for control and may even accelerate Promontory’s rebound from bankruptcy under the guidance of a qualified developer.” Said Sonntag, “Our members and the Park City community can remain confident that Promontory will emerge from bankruptcy with our vision securely in place.”
This article was found on New West’s Development blog last night http://www.newwest.net/topic/article/promontory_club_heads_to_the_auction_block/C35/L35/
We are looking into it to confirm the facts, but here is what they have to say:
LUXURY RESORTS IN CRISIS
Promontory Club Heads to the Auction Block
The bankrupt Promontory Club outside Park City, Utah will be sold at auction on April 15 after banker Credit Suisse was unable to raise $70 million in new financing for the luxury golf and ski community.
A Chapter 11 bankruptcy reorganization plan approved earlier this month called for a loan syndicate led by Credit Suisse to take over ownership of the club and raise $70 million in so-called exit financing to fund the operations until the real estate market turned and lots sales resumed. If the money could not be raised, the club would be sold at auction.
The Credit Suisse group lent $350 million to the club in 2005, and most of that money was taken as “return on capital” by the original developer, Arizona-based Pivotal Group and an Arizona employee pension fund. Like several other high-end Western resorts, Promontory last year found itself with a lot of debt and little revenue as the economic meltdown brought sales to a halt.
Bidders for the club will have to take over the membership agreements and show they have the capital to carry it through the downturn. Credit Suisse, or even Pivotal, could emerge as bidders in the auction.
Things to Consider...
Related posts:
- Promontory groups agree on bankruptcy plan
- Promontory still up in the air and not as many bidders as expected…
- Promontory Reorganization Plan Confirmed by Bankruptcy Court
Related posts brought to you by Yet Another Related Posts Plugin.
Tags: deer valley real estate, park city golf, park city real estate, park city realty news, park city screamin deals, promontory, promontory golf, promontory park city
