As reported first by NewWest:
The court-supervised auction of the bankrupt Promontory Club outside Park City, Utah has attracted no offers from new investors - a stark illustration of the near-total collapse of the luxury mountain real estate market.
Just a few months ago, Promontory managers and others involved in the situation were optimistic that the club’s reorganization plan would result in new financing and some prospect of at least partial repayment for both lenders and other creditors. But efforts to raise new loan capital for the 7,200 acre golf-and-equestrian club were unsuccessful, and it now appears that the market value of the club - even with almost all of its $350 million in debt eliminated - is very minimal.
At the auction Wednesday morning, only two bidders appeared: Pivotal Group, the original developer of the club and the provider of the interim bankruptcy financing, and Credit Suisse, which arranged the 2005 loan to the club and now represents the loan-holders. The minimum bid would be a little more than $30 million in cash, to pay off the interim loan, administrative costs, and some trade creditors, and a successful bidder would also have to show it had about $20 million to finance the club until the real estate market rebounds and lot sales at Promontory resume.
Attorneys involved in the case said both parties challenged the validity of the others’ bid, and the dispute will go before the court on Friday. If Pivotal were to prevail with a bid of just a little more than $30 million, the Credit Suisse note-holders would be wiped out completely. Credit Suisse, while it would also have to come up with the $30 million -plus in cash, could then “credit bid” above that amount by offsetting against its loan. But it would also have to show that it had the money to operate the club.
Things to Consider...
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- Promontory groups agree on bankruptcy plan
- Breaking news on the Promontory front….
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Tags: deer valley, deer valley real estate, park city, park city real estate, promontory, promontory bankruptcy, promontory real estate
