Jay Peak bombshell - Page 8

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  1. #71
    thetrailboss's Avatar
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    Quote Originally Posted by noreasterbackcountry View Post
    Which is to say that they were converted from an unsecured interest to an unsecured interest. Given that their equity interest was in the form of a limited (and non-voting) partnership interest, I can't see that they've lost much. And even if they did, the change was authorized in their partnership agreement.
    So going from an equity ownership interest to an unsecured "IOU" was no big change?

    And the issue, again, was the long delay in letting folks know.

    Having buyer's remorse about the agreement that allowed for this type of change is a long way from fraud.
    That is NOT what they are saying.

    Also, having an issue with the way in which this change was communicated is a long way from fraud.
    So waiting over a year to inform your partners of the change is not a big deal? Generally speaking in a partnership partners owe a duty of loyalty to each other. I think that the implication here is that JPR was not on the "up and up" with this move.



    I'm actually not assuming that. I'm saying that it is easier to make good on the plan to pay back EB-5 investors at 1% then it is to make good on an agreement to pay back a bank at 5%+. Plus, if you fail to pay the bank they can seize the assets, whereas if you fail to make your expected returns to investors or pay back unsecured note holders their options are much more limited.



    The point being that Jay is in a better position than those companies that have to pay back higher interest rates on the money they borrowed to build infrastructure.
    You're on a different wavelength. Folks are saying that this change and the kerfuffle may be a sign that revenue to pay back said investors is just not there and that this is a move to perhaps delay the inevitable.

    Quote Originally Posted by BenedictGomez View Post
    Oh, the "whatever reason" for the numerous month delay is quite obvious.

    As VTKilarney noted, the foreign money moving into Jay Peak is going to slow substantially now.

    By intentionally stalling for 5 months it gave Jay Peak 5 more months to lock up more investors to the tune of $500,000 apiece! Of course, the journalist cant come out and SAY that, but I think it's pretty obvious. In fact, if you're one of those $500,000 folks who signed on during that 5 month delay, I'd say you have suitable grounds for a lawsuit. Material change in contract non-disclosed.
    Yeah, that would be my "whatever reason" because, as you said, they don't want to scare folks away.
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  2. #72
    Quote Originally Posted by BenedictGomez View Post
    By intentionally stalling for 5 months it gave Jay Peak 5 more months to lock up more investors to the tune of $500,000 apiece!
    Bingo. IMHO, it was also to give him time to lock current investors in, such as with the Burke hotel. If the Burke hotel investors caught wind of this before the project started, how many of them would have pulled their money out?

    The first concrete chink in Stenger's armor was when Pomerleau came out of the shadows. Ever since then, Stenger has been in full on damage control mode. He's been insisting that everything is rosy. Now that game is up. He has lost all credibility and he's going to be getting pressure from every possible angle. Quite simply, this project has now changed from expansion to mere containment.

    Perhaps the key to Jay Peak's future is if Stenger is ultimately seen as a genius who tried his best or if he is seen as a snake oil salesman. If it's the latter, he's going to have no friends for support. He'll have absolutely no room for error as far as operations are concerned.

    One question: Is there any possibility of securities violations/fraud with EB-5 fundraising? Or is EB-5 fundraising outside of the purview of those regulations?

    Remember Rapid USA Visas, the former marketing agent for Jay Peak Resort’s EB-5 visa projects? They look pretty damn smart now. I'd hate to be a marketing agent that subsequently offered these EB-5 investments. Those people are probably shitting a brick right now, especially since at least one firm proved that they should have done due diligence. People like this guy ought to be scrubbing their websites: http://www.eb5fullservice.com/blog/2232/
    Last edited by VTKilarney; Jul 29, 2014 at 8:40 PM.

  3. #73
    Gotta love this quote from here: http://www.eb5fullservice.com/blog/2232/
    James Candido, the principal overseer of State of Vermont EB-5 projects, stated to me that he inspects Jay Peak’s financial records at least four times per year and that he has not seen any financial irregularities or problems in Jay Peak’s finances.

  4. #74
    Quote Originally Posted by noreasterbackcountry View Post
    I also think your "artificial monkeying" argument is a bit overly dramatic. Is it any less artificial when a bank loans the money for a project?
    Yes. Dramatically so. Good lord in heaven, they're not even remotely similar.

    The former is made chiefly due to the fact that it's likely a poor investment.
    The latter is made chiefly due to the fact that it's likely a good investment.

    And that's just for starters.

    Quote Originally Posted by noreasterbackcountry View Post
    The folks in investment banks who make decisions on where to invest are just as prone to screwing up as folks who work in the EB-5 centers. If recent history is any indication, they are MORE prone to error.
    As someone who used to be a "folk" who worked at an investment bank, I can assure you you're wrong. On its' face, your comment is ridiculous even if you intended it to by hyperbolic (which I dont think you did).

    Investment banks do not make money by "screwing up", and if you repeatedly "screw up" even so much as a little bit at a bulge bracket player, you'll likely be out on your ass. I can assure you, it's about the least safe working environment anywhere in America for "screwing up", with the possible exception of surgery. I'm also fairly certain you likely don't understand what caused the "banking collapse" that you've now alluded to multiple times in this thread, but I'm just as certain that you think that you do. Spoiler Alert: The crisis was decades in the making, there's plenty of blame to go around, and it certainly wasn't all the banks fault. Not hardly.
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  5. #75
    Here is another gem of a quote from Stenger in the article I linked above:
    As it happens, the exit strategy issue may be a moot point as regards Phase I investors. Stenger volunteered during our discussions that the revenue trends on Phase I residences are looking so good “that we are seriously considering buying out the Phase I investors ourselves.”

    Stenger better have records to back this statement up. If not, these are the kinds of things that support a subsequent investor's allegation of fraud.

  6. #76
    thetrailboss's Avatar
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    Quote Originally Posted by VTKilarney View Post
    Here is another gem of a quote from Stenger in the article I linked above:
    As it happens, the exit strategy issue may be a moot point as regards Phase I investors. Stenger volunteered during our discussions that the revenue trends on Phase I residences are looking so good “that we are seriously considering buying out the Phase I investors ourselves.”

    Stenger better have records to back this statement up. If not, these are the kinds of things that support a subsequent investor's allegation of fraud.
    Optimism? Yes. Misrepresentation? Maybe. Fraud? I don't think so. I don't think there is any misallocation or wrongdoing going on. I think it is more just a reflection of what they do.

    Anyone who has followed Jay knows two things. First, they always push the envelope when it comes to marketing because they had to given their location. There's nothing wrong with that and it's a reflection of the industry (think of the OLD Killington and their marketing). Ask anyone in the NEK who skis about the "Jay Ruler" for snowstorms and you'll get the idea. Almost irrational exuberance. Second, the previous ownership were real cheapskates. They invested hardly ANYTHING in Jay and took all the money out. This left Stenger, who was never short on ideas, very hungry. Now he's got access to capital. You can kind of see how we got to where we are.
    Live, Ski, or Die!


  7. #77
    I can now see why the investors were pissed. Apparently they were led to believe that they would acquire fractional ownership of units that they could sell on the open market. This was pitched as the exit strategy. There is a big difference between being able to sell an ownership interest in a unit and being an unsecured creditor. Even if they become secured creditors of the resort (whatever that means), this is not nearly as appealing as their original expectation.

  8. #78
    Quote Originally Posted by thetrailboss View Post
    Optimism? Yes. Misrepresentation? Maybe. Fraud? I don't think so.
    Optimism would be naive. Misrepresentation is certainly factual.

    Fraud I think would be very difficult to prove, but I'm not a lawyer and I haven't even played one on TV.

    But there's no doubt now that Stenger made those statement's knowing full-well that they'd be digested by future potential investors. In other words, he was totally full of crap regarding how well the "investments" were looking. That's a heckuva lot worse than telling people your 6" storm is 9".
    President - Bicknell's Thrush Extermination Solutions (BTES), LLC



  9. #79
    thetrailboss's Avatar
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    Quote Originally Posted by BenedictGomez View Post
    Optimism would be naive. Misrepresentation is certainly factual.

    Fraud I think would be very difficult to prove, but I'm not a lawyer and I haven't even played one on TV.

    But there's no doubt now that Stenger made those statement's knowing full-well that they'd be digested by future potential investors. In other words, he was totally full of crap regarding how well the "investments" were looking. That's a heckuva lot worse than telling people your 6" storm is 9".
    Certainly have to agree. That's the reason for some of the securities laws.
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  10. #80
    Quote Originally Posted by thetrailboss View Post
    I might be wrong, but Sugarbush was in the $80 range. Let's face it though because of Jay's distant location they have to be a bit lower price.



    I see myself moving increasingly more to this POV, especially considering the (lack of) oversight and issues that are appearing.
    Yup top of the 80 range - 89 on weekends.


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