DoublePlanker
Member
The receiver is not going to operate at a loss. Paying the lawyers is expensive. Did enough cash get release to avoid any large cuts on operating expenses to ensure profitability?
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Stenger and Quiros Ousted from Management of Jay Peak and Burke
- Thread starter thetrailboss
- Start date
VTKilarney
Well-known member
Only enough to operate Q Burke until mid-July.
sull1102
Member
Couldn't afford to buy or run it even if they wanted to.
VTKilarney
Well-known member
Well worth a read:
http://www.burlingtonfreepress.com/...-could-close-q-burke-may-never-open/83501858/
The article has been substantially rewritten. There are lots of interesting nuggets.
http://www.burlingtonfreepress.com/...-could-close-q-burke-may-never-open/83501858/
The article has been substantially rewritten. There are lots of interesting nuggets.
Location location location
very interesting. I wonder how much cash is available. The reciever was asking for court approval to release some funds but who knows how much is there in total.
And how much has been paid by jay to q for management fees or whatever they called them, that can be clawed back.
its a mess. Gonna take some time to sort things out and I'd imagine if there are interested buyers, they won't be funding anything until they can secure clear ownership. But maybe they can arrange some financing like In a bankruptcy proceeding.
Zermatt
Active member
Wow, my doomsday predictions are coming true faster than I thought.
Zermatt
Active member
It's like watching the 2008 financial meltdown in miniature.
Give odds on whether or not they reopen this weekend for skiing. They have absolutely no credit with their vendors right now. They all want cash up front for services.
If they don't pay for the tram repair down payment soon they won't get the repairs done this summer.
Give odds on whether or not they reopen this weekend for skiing. They have absolutely no credit with their vendors right now. They all want cash up front for services.
If they don't pay for the tram repair down payment soon they won't get the repairs done this summer.
VTKilarney
Well-known member
Steve Wright said on Facebook that they are trying to get a line of credit to keep Jay Peak afloat. He anticipates getting one opened this week. Let's hope that he didn't inherit Stenger's false optimism.
Zermatt
Active member
Seriously, what else would they say? We are doomed! Of course not.
Bear Stearns failed immediately following their failed attempt to secure credit.
Who would give Jay a line of credit? Their assets are so tainted with stolen money no bank is going to touch it until they are free and clear. The people managing the resort have no clue. They even have the nerve to tell me they aren't going bankrupt, when bankruptcy is the only thing that will save them.
manhattanskier
New member
The saddest question is, what if the program was actually clean. Would it have brought good jobs to hundreds of people? We will never know, this makes me sick, especially that video recruiting Eb-5 investors. Fraud is not an assumed risk.
abc
Well-known member
The general impression of the EB-5 program is such that it has very little chance of succeeding...
Just about everything I read and everyone I spoke to, thought of this group of investors as people who got money to burn. Worse, some thought of them as dummies who's got more money than sense. All too often, crooks who's looking for their next victim descend on them as pool of "free money". No one bother to propose serious project that has much chance of success. Only the shakiest of projects were pitch to them! By and large, the majority of the EB-5 projects are over-leveraged, high risk projects that has very slim chance of turning profit.
Of course, part of the problem is our current economic environment. Interest rate is so low, money loses their buying power sitting in a bank. So there're far too much money chasing few worthy projects. Who wants to bother with all the red tape to deal with the EB-5 investors? Only projects smart investor won't touch with a 9-foot pole!
Just about everything I read and everyone I spoke to, thought of this group of investors as people who got money to burn. Worse, some thought of them as dummies who's got more money than sense. All too often, crooks who's looking for their next victim descend on them as pool of "free money". No one bother to propose serious project that has much chance of success. Only the shakiest of projects were pitch to them! By and large, the majority of the EB-5 projects are over-leveraged, high risk projects that has very slim chance of turning profit.
Of course, part of the problem is our current economic environment. Interest rate is so low, money loses their buying power sitting in a bank. So there're far too much money chasing few worthy projects. Who wants to bother with all the red tape to deal with the EB-5 investors? Only projects smart investor won't touch with a 9-foot pole!
from_the_NEK
Active member
How much of Jay Peak's operational profit was going into the Q bank accounts as a "management salary"? This would account for Quiros' large numbers in comparison to what Goldberg was seeing on the book. The books show less than $2 million yearly profits at Jay vs Quiros numbers that are triple/quadruple that. Well, if Quiros was taking 5-10 million out of the pot annually to help pay for his $80,000/month living expenses (what!), it all just looks like profit to him.
mbedle
Well-known member
mbedle
Well-known member
The books would reflect the owner's take of the profits. Scary part about this is what are they going to do in November when they need to start making snow and opening for the season. If new owners are not in-place that could mean a potential closure of both areas.
I thought one of the interesting nuggets of the BFP article was the "two large hotel chains" supposedly interested in Hotel Burke (I removed the Q and will start new naming rumors).
That wouldn't be the worst thing in the world but that begs the question of how that would work with a separate owner of the mountain + BMA etc. I don't see how a hotel corporation would let a separate outside entity have such an influence on the success of their business like a separate owner of the ski area would.
One thing that I still can't understand is the expectation that investors would ever be "repaid" their capital. So they raise say $100M to build a hotel and resort improvement, they planned all along to use damn near every cent of that $100M in capital for the build. There was no other capital to fund the build. Was the expectation that the newly created businesses would throw enough cash to repay principal invested in the project? I must be missing something, what am I missing?
That wouldn't be the worst thing in the world but that begs the question of how that would work with a separate owner of the mountain + BMA etc. I don't see how a hotel corporation would let a separate outside entity have such an influence on the success of their business like a separate owner of the ski area would.
One thing that I still can't understand is the expectation that investors would ever be "repaid" their capital. So they raise say $100M to build a hotel and resort improvement, they planned all along to use damn near every cent of that $100M in capital for the build. There was no other capital to fund the build. Was the expectation that the newly created businesses would throw enough cash to repay principal invested in the project? I must be missing something, what am I missing?
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mbedle
Well-known member
I was thinking the same thing - if they sell the hotel at Burke to an outside entity, where does that leave the ski resort. They will still need to find a buyer for the ski resort, which I would think would be difficult with out the potential income from the hotel operations. I also find it odd that a large hotel chain would be interested in purchasing a hotel at a resort that has operated so poorly for so many years. I wonder how well the Holiday Inn at Ascutney does with out the ski area operating (up until recently).
VTKilarney
Well-known member
VTDigger has an article about the court hearing yesterday on Quiros' attempt to unfreeze assets.
http://vtdigger.org/2016/04/26/defense-attorney-quiros-is-no-bernie-madoff/
One interesting bit:
http://vtdigger.org/2016/04/26/defense-attorney-quiros-is-no-bernie-madoff/
One interesting bit:
This surprises me. Most chains aren't interested in seasonal ski properties in New England. N. Conway is really the only "ski town" that has them. N Conway has such a well established summer and fall season and can make up for low occupancy periods with very high in season rates. Burke doesn't have that. Maybe the chains are looking at buying the hotel on the cheap and selling fractional vacation club sales to get their profit out of the place that way over the traditional hotel room rental model.
The Fairfield Marriott just opened in Waterbury, but I think part of the thinking there is proximity to 89 and capturing highway travelers and business visitors to Montpellier and Burlington. I don't think the "Marriott Burke Resort" works in that location. If it did, we'd likely have seen the "Marriott Killington" long ago.
