Jay Peak Resort Bid Process Begins, Pacific Group Resorts Bids $58mil
On April 14, 2016, Jay Peak and Burke Mountain were seized by U.S. government officials. In a statement Jay Peak's recievers have said:
The time has come for the Receiver to sell the Jay Peak Resort. When the Receiver took over the Jay Peak Resort in April, 2016, it was on the verge of collapse having little money and making very little profit. In fact, the Receiver had many sleepless nights during the summer of 2016 wondering if he would be able to even make payroll. Now, after more than 6 years, the Jay Peak Resort is significantly more profitable and hundreds of jobs have been saved. The Receiver attributes this success to his top notch management team and the dedicated employees who work tirelessly to make Jay Peak one of the greatest ski resorts in the country."
The Receiver seeks authority to enter into the APA with Pacific Group Resorts, Inc. (through a designated affiliate thereof) (the “Buyer”). The Buyer has consented to serving as the initial bidder, or the “stalking horse” bidder, as further provided for in the APA. The sale of the Assets will thus be subject to higher and better offers. The Buyer is unrelated to the Seller Entities and its current management, agents, representatives, or professionals. The Buyer is also unrelated to the Seller Entities’ past principals and owners. The Buyer is neither a successor nor a continuation of the Receivership Entities.
"The APA provides that the current consideration for the purchase of the Assets by the Buyer is Fifty-Eight Million Dollars ($58,000,000) (the “Purchase Price”) to be paid as
follows: (i) the Buyer will assume the obligations of the Seller Entities set out on Schedule 2.1(d) of the APA (the “Assumed Debt”), which is currently anticipated to be approximately Five Million Eight Hundred Thousand Dollars ($5,800,000.00), but only to the extent such assumption is allowed by the counterparty of the Assumed Debt; and (ii) the Buyer will pay, in cash, at Closing the Purchase Price less the Assumed Debt and the Deposit. 13. The proposed sale of Assets is to be “free and clear” of liens, with liens attaching to sale proceeds, except as otherwise provided for in the Asset Purchase Agreement. The sale of the Assets to the Buyer shall also be free and clear of any claims of successor liability."
Jay Peak has been under court-appointed receivership since 2016. If the judge approves PGRI’s “stalking horse” bid to purchase it, the resort will then go to auction where other qualified bidders can submit a higher bid for approval. If accepted, the asset purchase agreement would become the initial bid in a potential auction to purchase the resort. The auction period takes 30 days.
While Jay Peak would be an exciting acquisition for PGRI, said chief marketing officer Christian Knapp, there is a long process ahead before any deal can be finalized. PGRI chief financial officer Mark Fischer explained to Ski Area Management, “When a charity auctions off skis, the auctioneer asks who has $500 to start the bidding—that first bid is all we’ve done. Our bid hasn’t even been approved yet.”
PRGI owns and operates five North American ski areas: Ragged Mountain, New Hampshire; Wisp, Maryland; Wintergreen, Virginia; Powderhorn, Colorado; and Mount Washington Alpine, British Columbia.
Jay Peak's General Manager Steve Wright commented, “This is a step in the process but there are more steps to go that will likely continue to stretch forward into the summer; signing an asset purchase agreement (APA) simply initiates and, in reality, continues, the process. PGR is a world-class operator of resorts and were they to complete that process, both the resort and their organization would be better for the relationship.”
