WILLARD MOUNTAIN FILES PREPACKAGED BANKRUPTCY

Willard Mountain in Greenwich, NY filed bankruptcy in New York on June 11, 2015 to address an adverse ruling in a lease dispute with its lessor under a long-term lease. Under the lease, the ski resort rents the property used for its parking lot, lodge, offices, ponds for snow making water, and certain trails, lifts and other buildings. The NY Supreme Court determined that the resort breached the lease, and revenues generated from an affiliated company for ski rentals and concessions were subject to the commission calculation under lease.  Under the proposed Plan of Reorganization, Willard will assume the parking lot lease and pay past due amounts, as well as go-forward payments based on lease calculations but not for revenue related to cell tower income.  If the Plan works, all creditors will be paid in full over 5 years.  The owners of the resort also plan to seek a buyer while in bankruptcy.

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CAN LOCAL GOVERNMENTS BAIL OUT SKI RESORTS?

After the resurgence of Detroit Mountain near Detroit Lakes, Minn through the creation of the non-profit Detroit Mountain Recreation Area (DMRA), and its $8.5 million investment, cash starved ski areas are looking to local governments for a bail out.

Andes Tower Hills in Minnesota is seeking conversion to a non-profit, city-owned operation which would have the current private owners donate the land and equipment to the county, and they county would then operate the resort as a 501(c)(3) non-profit. It is unclear whether the move will obtain full support as tax losses and insurance issues pose certain unavoidable issues.  But there is certainly early support for it. The Traverse City, Mich. commissioners similarly approved a $1.5 million pledge for a new lodge and parking lot at its Hickory Hills resort.

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The non-profit path presents an option outside of a bankruptcy restructuring for small resorts.