Lenders foreclose on Intrawest

Boyd Erman Globe and Mail Update Published on Wednesday, Jan. 20, 2010 2:08PM EST

Banks have started foreclosure proceedings against Intrawest Holdings, the owner of the Whistler ski resort that's hosting the Olympic downhill races next month, after the resort operator missed a big debt payment, and now plan to auction the company off right in the middle of the games.Intrawest's owner, Fortress Investment Group, lost control after missing a big interest payment to its lenders. The lenders, which include Lehman Brothers and Davidson Kempner, plan to auction off ownership of Intrawest on Feb. 19, according to a notice published in major newspapers. The first events of the games are scheduled for Feb. 12 and the closing ceremony is set for Feb. 28.

“Each qualified bidder must be a financial institution or other entity that has the financial wherewithal to purchase the membership interests in immediately available funds on the closing date,” the notice said. The lenders, frustrated by a lack of progress in restructuring the debt, gave notice of the foreclosure to Intrawest on Jan. 8, said a person familiar with the talks. The timing was unrelated to the Olympics, the person said.

In addition to Intrawest, buyers will get stakes in four resorts in Colorado, as well as properties in California, Florida and Vermont. But with the Games only weeks away, the focus is on Whistler. “We understandably cannot comment on Intrawest's finances beyond our continued support for their efforts to settle outstanding financial matters,” said Dan Doyle, the executive vice-president of construction for the Olympic committee. “What we can confirm is that Whistler Blackcomb is an important partner in the staging of the 2010 Games and we continue working in very close partnership with them to finalize overall preparations and readiness for the skiing and sliding sport events.”

A source close to the organizing committee said that Fortress was hard to deal with so having Intrawest in the hands of lenders and the receiver acting on their behalf may be a boon. “The receiver would appreciate the value to the asset of being a successful Olympic mountain,” said the person, who said that Fortress seemed indifferent to the fact that Whistler was to be home to the Olympics. Intrawest chief executive officer Bill Jensen said that the company is in talks with its lenders, and in the meantime “it's business as usual.”