Stenger and Quiros Ousted from Management of Jay Peak and Burke

[fbrissette]

So the state of Vermont allowed, or even help facilitate, a fraud to go on from the beginning!

When no one (on this board or in Vermont) EVER thought the investors will be paid back, never mind any chance of making any money (aka, as an "investment"), they nonetheless market it as such (allowed into the EB-5 pool).

Madoff's only fault was he ripped off Americans rather than foreigners.

First of all, if you have 500k to invest (plus 50k for management), I don't care if it is your lifesaving or if it is only a drop in the bucket, you should do your due diligence.

200M with a 4% interest rate as promised, implies an increased profitability of 14.54 M$ per year (not taking taxes into account !) to refund capital with interest over a 20 year period. I'm sorry but it does not take a deep knowledge of the ski industry to figure that these numbers make absolutely no sense for a ski resort in the middle of nowhere, and where the largest city center is in another country.

I don't care how good the sales pitch was, you don't invest that much money without due diligence. I assume many investors thought that in the worse case scenario they would be left with an equity, but it does not matter if the equity was acquired with 200M, utlimately, profits will tel how much this equity is worth (much, much less than 200M).

This program was fantastic for Jay Peak, allowing world class infrastructures to be be built, boosting resort profitability. If the investors thought they could get a 4% return, there would not be a need for EB5 to begin with. I feel bad for them if they don't get their visas, and I feel bad for the money that was stolen. I don't feel sorry one bit for the bad investment.

 

[thetrailboss]

First of all, if you have 500k to invest (plus 50k for management), I don't care if it is your lifesaving or if it is only a drop in the bucket, you should do your due diligence.

But if the state that is overseeing and supposedly regulating the projects, and is going out of its way to say that it is, when it really is not, then such due diligence will fail.

Someone will try to sue Vermont. And regardless, Vermont's credibility with investors of any stripe is now in the toilet. That's the real damage. It sickens me.

 

[BenedictGomez]

I'm guessing it's a case of a simple audit (I.E. There was X millions in Jay's EB-5 account that the state was holding, Jay submitted the required paperwork for release of those funds, VT saw that the paperwork looked in order, and released the funds to Jay) vs. what was the likely the forensic accounting that the SEC did as they compiled the info that lead to that "spaghetti plot" map that they (The SEC) produced when they made their announcement about the fraud.

There never was an "audit" of any kind. Yes, the governor did say that, but we later learned it wasn't true.

They weren't even collecting and maintaining the quarterly reviews that they literally said that they were doing. This all came out long ago. True, Stenger kept stalling and delaying access, but that's no excuse, in fact it adds to their culpability.

And I'll mention this name for the 1,100th time ---> Brent Raymond. The guy with VT political connections and no resume commensurate for the lofty job/title he held, who was oddly covering for Stenger the "great man" who he vehemently claimed "did nothing illegal", a rather remarkable claim given he wasn't analyzing the books. I'd still love to know if the SEC ever investigated Raymond. He's either incompetent or perhaps somehow complicit, I have no idea which, but there isn't a third option.

I guess that is why I am confused that people feel that Vermont somehow has some liability in this mess. They never stated to investors that they were going to audit these projects. They simple stated that they audited the EB-5 offering documents and that was the extent of their involvement.

Seriously?

State of Vermont's entire EB-5 raison d'etre and repeated marketing and sales pitch revolved around your "investment" being "safer in Vermont" than anywhere else in America because it was the only government monitored and run EB-5 program replete with quarterly financial monitoring. All false.

And the state WAS forced to REMOVE oversight claims from promotional materials and marketing video because they were deemed to be false, where they DID say that they audited the books. This became public after a State of Vermont lawyer (forget his/her name) told them they needed to "ixnay on the claimay of any auditsay".

 

[fbrissette]

Vermont's credibility with investors of any stripe is now in the toilet. That's the real damage. It sickens me.

Agreed. EB5 is now dead in Vermont.

 

[thetrailboss]

Agreed. EB5 is now dead in Vermont.

Well, any effort to get investment in Vermont is now in trouble. Sure, the current "administration" is leaving this year because the Gov is not seeking re-election, but they have done a lot of damage that will span beyond their years. Why would anyone want to invest in Vermont when the State had either (a) no idea what they were doing, or (b) were complacent? The average person in Vermont and the average business in Vermont now is hurt. EB-5 was really meant for a lot of businesses in Vermont and Appalachia but now that route is now gone.

 

[deadheadskier]

Harrison Ford is moving to the Burlington area. Maybe he can get the next Star Wars to film up there.

http://www.kupr7.com/burlington-vermont/harrison-ford-explains-why-hes-moving-to-burlington-vermont/

 

[from_the_NEK]

Hmmm, I heard he was moving to New Jersey.

http://www.knp7.com/trenton/harrison-ford-explains-why-hes-moving-to-trenton-new-jersey/

 

[abc]

This program was fantastic for Jay Peak, allowing world class infrastructures to be be built, boosting resort profitability.

What "world class infrastructure"? The yet to be serviced tram??? Or you think the hotel is such world class hotel it alone will "boost" Jay's profitability?

For the next few years, Jay Peak will have NEGATIVE profit. And even in the long term, it may still have poorer profitability due to the cost of keeping those empty hotel rooms heated.

That's not to count the fact the only "investor" who are likely to touch Jay Peak from here on out will be investment vultures.

In what way is that "fantastic for Jay Peak"?

 

[deadheadskier]

Do you have direct access to Jay's balance sheets to make the claim that they are and will be less profitable than they were prior to the development of the hotels and water park? How can you be so sure?

 

[thetrailboss]

Harrison Ford is moving to the Burlington area. Maybe he can get the next Star Wars to film up there.

http://www.kupr7.com/burlington-vermont/harrison-ford-explains-why-hes-moving-to-burlington-vermont/

Hmmm, I heard he was moving to New Jersey.

http://www.knp7.com/trenton/harrison-ford-explains-why-hes-moving-to-trenton-new-jersey/

It's dupes of the same fake article. He is not moving anywhere. Perhaps you all knew that and were being tongue in cheek.

 

[from_the_NEK]

Bonus .gif has Leahy in it

 

[fbrissette]

What "world class infrastructure"? The yet to be serviced tram??? Or you think the hotel is such world class hotel it alone will "boost" Jay's profitability?

Let me see - a great ski mountain (by eastern standards), a skating rink, an aquaparc, a great golf course, and modern accommodations to go with it. If you can't at least recognize that Jay Peak is in much better position than it ever was, there is little point in having a discussion. You must have missed the part about the receiver expecting annual profits in the 6 to 8M$ per year.

You can choose to believe whatever you want, the real test will be a couple of year from now when the sell the place. Buyers will show up.

 

[steamboat1]

Let me see - a great ski mountain (by eastern standards), a skating rink, an aquaparc, a great golf course, and modern accommodations to go with it. If you can't at least recognize that Jay Peak is in much better position than it ever was, there is little point in having a discussion. You must have missed the part about the receiver expecting annual profits in the 6 to 8M$ per year.

You can choose to believe whatever you want, the real test will be a couple of year from now when the sell the place. Buyers will show up.

How much EB-5 money did Quiros & Stenger raise? I've heard somewhere in the range of $500m. With the exception of the Burke Hotel the majority of that money went into Jay since there's no money left & very little work done on the other projects. Yes some of it went into the pockets of Quiros & Stenger. Lets just say $300m went into Jay. $6m-$8m profit per year would still be a very poor ROI on that investment & who's to say it will be even that much. Yes a buyer will come along but they won't pay nearly as much for Jay as the amount of money invested. Why would anyone with only $6m-$8m in projected annual profits.

 

[deadheadskier]

Didn't a large chunk of that $300M go towards private real estate that's been sold off?

 

[BenedictGomez]

You can choose to believe whatever you want, the real test will be a couple of year from now when the sell the place. Buyers will show up.

"A few more such victories will shortly put an end to British dominion in America" - General Henry Clinton, 1775

 

[steamboat1]

Didn't a large chunk of that $300M go towards private real estate that's been sold off?

I have no idea. I've heard the going rate for ski resorts is approximately 6 X's annual earnings. That puts the value of Jay at $36m-$48m. I hope they sold a lot of private real estate.

 

[fbrissette]

Lets just say $300m went into Jay. $6m-$8m profit per year would still be a very poor ROI on that investment & who's to say it will be even that much. Yes a buyer will come along but they won't pay nearly as much for Jay as the amount of money invested. Why would anyone with only $6m-$8m in projected annual profits.

Just like I was saying earlier, potential buyers will not pay the construction value of the assets. They will pay market value based on the resort profitability as a whole. The resort is supposedly valued in the 50-80 million range, which tells a lot especially considering
Quiros bought the resort on 2008 for 25 millions (per the receiver's lawsuit against Raymond James). So we're pretty far from 1$ construction being equal to 1$ in increased value (notwithstanding fraud, construction management fee...).

The future buyer will get all the assets (which undoubtebly increased profitability - unless you live in NJ in which case these assets are an endless pit) at a fraction of the construction cost, free from creditors.

 

[fcksummer]

You must be a young un. The little Pico triple used to be a t-bar. When you look at that you can run a t-bar anywhere. cuts down on snowboards and people who shouldn't be there.

Now only if there was a lift to cut down on skiers.

 

[abc]

The future buyer will get all the assets (which undoubtebly increased profitability - unless you live in NJ in which case these assets are an endless pit) at a fraction of the construction cost, free from creditors.

Well, if you force the creditor's to accept a haircut, return only a fraction of the investor's money, you CAN indeed make even a toilet bowl "profitable".

Yes, if that's what you mean by profitability of Jay, you'd be right.

Fraud pays, in that context.

(In reality, you may even do the same with your own house. Sell your house to your kid for 10% over market value. Let him declare bankruptcy and go to jail for lying in the mortgage application. Now, the house is on the market for 60% of its value on a bank repo sale. Buy it back yourself. You've just made a handsome profit of ~50%)

 

[LONGBOARDR]

Let me see - a great ski mountain (by eastern standards), a skating rink, an aquaparc, a great golf course, and modern accommodations to go with it. If you can't at least recognize that Jay Peak is in much better position than it ever was, there is little point in having a discussion. You must have missed the part about the receiver expecting annual profits in the 6 to 8M$ per year.

You can choose to believe whatever you want, the real test will be a couple of year from now when the sell the place. Buyers will show up.

You forgot to mention the thigh deep powder we will be slaying in the West Bowl after a short skin when everyone else is standing in lift lines