Stenger and Quiros Ousted from Management of Jay Peak and Burke

River19 said:

And here is a wild question......what if......just what if, Porsche owners were also mountain bikers? Holy shit.....dogs and cats living together.....mass hysteria.....

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Unpossible! All MTB'rs are dirtbags! There is no way that many of them have good income jobs with families that might want to drive their Cayenne to a place with awesome MTB while still having a nice room to stay for a night or two right next to the trails.

from_the_NEK said:

Unpossible! All MTB'rs are dirtbags! There is no way that many of them have good income jobs with families that might want to drive their Cayenne to a place with awesome MTB while still having a nice room to stay for a night or two right next to the trails.

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You are right, what was I thinking......those unwashed heathens could not possibly have the means to both an expensive bike AND a Porsche......lol

As I sit here playing with numbers dreaming of my bikes.....

abc said:

As a mountain biker myself, I find the NEK area lacking in clean motels, not upscale hotels.

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You could probably substitute "Budget Skier/Skier Families" with Mountain Biker too...

MEtoVTSkier said:

You could probably substitute "Budget Skier/Skier Families" with Mountain Biker too...

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This is a fair statement, the number of clean, a reasonably priced rooms in the NEK is pretty low.

Slightly more options for B&B places for a romantic getaway for a couple spending "getaway" type money, but a clean place to come back to after dinner and shower and sleep and then early out again is very low.....

JAY PEAK WILL NOT CLOSE, AND OTHER UPDATES ABOUT THE ALLEGED VT PONZI SCHEME
Apr 25, 2016 By: Ryan Dunfee Follow
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It's been a busy week for news in Vermont since the SEC alleged two ski resort owners with fraud on April 14th. Tim Kirchoff photo.

Last week, we reported on the outrageous news (at least by the standard of what we normally get to report on) that Bill Stenger and Ariel Quiros, the business partners who owned Jay Peak Resort and Burke Mountain Resort, were charged with financial fraud by the Securities and Exchange Commission.

The feds allege that the pair had been perpetrating a Ponzi scheme with $400 million in funds raised from foreign investors through a federal program known as EB-5, which lets foreigners who invest at least $500,000 in job-creating projects in the U.S. obtain fast-tracked green cards for themselves and their families. Allegedly, over $200 million was used for purposes outside of the stated projects – including purchase of condo in New York City's Trump Tower – and that money from later investors was used to pay off earlier ones.

The scandal has rocked the Northeast Kingdom of Vermont, and has widened to include suspicions about mishandling of the project by Vermont state officials and many questions over the financial future of the rural area and its residents.

THE SHORT AND LONG OF THE PAST WEEK'S NEWS

While a Miami court takes on the fraud case, East Coast skiers and riders take, shirtless, to the trees of Jay Peak. Jay Peak Resort photo.

The short of the news that has followed since is that Jay Peak and Burke Mountain Resort will continue to operate as normal (despite a report you might have seen stating otherwise today), that Quiros and Stenger have defended their innocence, and that the Vermont political scene has gotten its greatest source of gossip in years.

The long of the news of the past week, however, looks like this:

-JayPeakReceivership.com is set up by Jay Peak receiver/lawyer Michael Goldberg to catalog all the legal documents of the proceedings and operations of Jay Peak.

-The Burlington Free Press reports that a former Jay Peak controller testified to the SEC that he raised concerns about the legality and operation of the EB-5 funds in 2010, and ultimately resigned when his concerns went unheeded.

-Ariel Quiros asks for his $50 million in assets to be unfrozen by the SEC, as they were last week. He wants to, ya know, pay his lawyer and rent and stuff. The fraud case, which he considers ridiculous, is playing out in a court in his hometown of Miami.

-Zander Basedepth, a nom de plume for an unnamed Ski The East correspondent, writes an entertaining commentary defending Bill Stenger's reputation and innocence. From his angle, Bill was simply unawares of the wrongdoing, and the state is owed a big chunk of the blame for mismanaging their own program.

-VT Digger sits down for an interview with Michael Goldberg, the attorney receiving Jay Peak Resort while the fraud case proceeds. He's the same attorney that represents the investors in the Berney Madoff scandal. He and his team will be paid a court-approved $375 an hour to keep the business running smoothly and eventually, to sell it off and pay back the EB-5 investors and other creditors. That's down from his normal rate of $675 an hour.

-New England Ski History reports that Bill Stenger plans to clear himself of any wrongdoing in the case, as does business partner Ariel Quiros. No surprise there. Stenger's sons remain employees at Jay Peak, and Ary Quiros, the controversial CEO of "Q" Burke Mountain Resort, remains employed there as well.

Between $7-11.5 million will be needed to keep Jay Peak and Q Burke Hotel open for the off-season and prepare for next winter, including repairs to Jay's signature tram.

-Anne Galloway of VT Digger publishes a comprehensive investigate report about how the entire operation came crashing down. It's really stellar work, and absolutely worth your time to read if you are interested in this story.

One of the elements of the story that might surprise people is the degree to which it is claimed that state government officials blew the handling of the EB-5 program, and while acting as boosters for its potential neglected to audit the projects or demand the quarterly reports deals with contractors required but which were not delivered.

State officials, including current Governor Peter Shumlin, former Governor Jim Douglas, Senators Patrick Leahy and Bernie Sanders (yes, Bernie!), are accused of being too cozy with Stenger and his projects, having their influence and enthusiasm for the projects used as marketing collateral – including on international investor-seeking trips paid for by Jay Peak – and receiving many campaign donations from proceeds of the projects. It's its own story within this broader one, and has many Vermont politicians in a hurry to give back these proceeds to charity.

As a sidenote, Galloway reports that roughly 700 foreign investors from 74 different countries invested in the EB-5 project, and that the fallout from this may prevent numbers of them from achieving the immigration status in the U.S. they hoped for with their investments, and for other EB-5 projects – such as one at Mount Snow in southern Vermont – to be stalled.

-VT Ski and Ride reports that Marshall Olsen, CEO of the Kansas company charged with running Jay Peak until the fraud case is resolved, says that with all its projects built, great employees, and a good flow of customers, the mountain will no doubt be eagerly snapped up by a buyer once the case is over. Longtime Jay CMO Steve Wright has been appointed to General Manager, and Olsen anticipates they'll be running the show at Jay for anywhere from six months to three years.

-The Burlington Free Press publishes an article today claiming that cash flow issues will force Jay Peak and Q Burke Hotel (not the mountain, mind you) to close. But it seems the receivership of both properties – Q Burke Hotel was added to the receivership as well – was floated a $750,000 loan to keep the doors open for the next three months. Chill, people! Title is suggested to TGR that reads "Burke Mountain and Jay Peak Plan to Operate Normally In Opposition to Media Yelling 'Closed!' For Clicks."

BFP later adjusts its headline to "Court-appointed manager scrambles to save ski resorts," with the content of the article reflecting the new headline.

Jay Peak today announced they'll stay open for a bonus weekend, and extend discounted season pass pricing through mid-July. Jay Peak Resort photo.

-Jay Peak announces it'll stay open for a bonus weekend this coming April 30th and May 1st at $20 a pop, and extends spring season pass pricing for next winter, which was set to end on May 9th, through July 11th.

A special thanks are owed to the continuing assistance from Alex Kaufman of the Wintry Mix podcast in fact checking and perspective gaining in the course of reporting on this story.

Did the receivership get the money they need to keep Jay Peak open through October 2016? I know they got the 750K for the Hotel at Burke.

River19 said:

You are right, what was I thinking......those unwashed heathens could not possibly have the means to both an expensive bike AND a Porsche......lol

As I sit here playing with numbers dreaming of my bikes.....

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Ahem. The Cayenne is not a Porsche any more than a Mini is a BMW or a tranny is a woman.
Carry on.

[h=1]Defense attorney: Quiros is ‘no Bernie Madoff’

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Yes, that is certainly true.

Bernie Madoff is diabolically brilliant, whereas Ariel Quiros is moronically evil.

The Stateside project at Jay Peak, for example, included 84 townhomes that were not completed, and about $26 million is needed to complete the projects. That money is basically missing, he said. DEW Construction, which is owed $3 million, walked off the job in early 2016.

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All these townhomes all incomplete? They look pretty complete from the outside, has anyone been inside?

If the above is true, it might blow a hole in the prediction I made a year or two back that I look forward to staying at Jay Peak for cheap someday (i.e. building to overcapacity versus demand).

Can someone tell me what is wrong with the Tram at Jay? I have read in a few places now that it requires 1 Million to repair. Is it tower work or mechanical at either end? I think the haul rope was replaced somewhat recently. Just curious.

I skied there Monday and Tuesday last week but the Tram wasn't running, neither was the Flyer, I heard overheating on the Flyer err um Freezer. I assume the terrain off the Tram was toast and that is why it wasn't running. Again, just curious.

Not really related but does anyone know of any EB-5 projects in NH besides the one in Lincoln? Loon Hotel.

MG Skier said:

Can someone tell me what is wrong with the Tram at Jay?

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JFK was president when they broke ground.

MG Skier said:

I have read in a few places now that it requires 1 Million to repair.

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The cost estimate is $4.15 Million to repair, and like all cost "estimates", the true figure will go north of that.

Ragged Mtn. I've been wondering about that one myself

Wow 4.15 Million!!

BG, I just read your other post on Burke....I hear ya, I seldom take it when I am up there. I only take it when there is no line. It is an alternative when the Flyer craps out however. I think I ski from the top every other third year!

I think it has to do with an overhaul of the drive and electrical system at the base. The towers, haul rope, support cables and towers have all been refurbed during the last decade.

Most of the time I ski off the Jet triple anyway.
Or hike a bit from top of Bonnie.

Not really a fan of either Freezer or Tram there.

from_the_NEK said:

I think it has to do with an overhaul of the drive and electrical system at the base. The towers, haul rope, support cables and towers have all been refurbed during the last decade.

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It sounds like the ratio of the cost of maintaining it compared to the number of skiers it carries is pretty poor.

But as much as I am not a fan of the tram, it is truly an iconic lift for Jay Peak. It's hard to imagine Jay Peak without it.

The Sneak said:

Not really a fan of either Freezer or Tram there.

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Is there any way they could put a bubble on the Freezer, or would that just result in way too many more wind holds?

VTKilarney said:

Is there any way they could put a bubble on the Freezer, or would that just result in way too many more wind holds?

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Bubbles would just be giant wind sails. They are totally impractical in northern New England.


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from_the_NEK said:

I think it has to do with an overhaul of the drive and electrical system at the base. The towers, haul rope, support cables and towers have all been refurbed during the last decade.

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That is what I heard, plus all safety sensors detectors need to be replaced. That 4 mill could probably be better spent until they get an new owner. Pretty short hike or skin from the flyer for goods on the ridge which would mostly be untouched.
Green Beret can be pretty enjoyable on a pow day first traxs