Credit Suisse Sets Sheriff's Sale Date And West Mountain Golf Foreclosure
In a recent letter to Homeowners, the TMA Counsel outlines recent developments.
To: Tamarack Municipal Association Membership
From: Stephen J. Lord, TMA Counsel
Re: Foreclosures
Dated: October 30, 2013
I. Tamarack Resort LLC
a. Sheriff's sales have occurred on the following lien claims:
1. Scott Hedrick - one Trillium townhome
2. Oz Architects/Tamarack Designs - 15 Trillium townhomes
3. Banner/Sabey - Village Plaza
4. BAG Holdings - Fairmont residences in the Whitewater neighborhood and the Fairmont Hotel and related sites immediately east of Village Plaza and north of Lake Wing.
b. Remaining Sheriff's sales are:
1. MHTN Architects - Lake Wing
2. Credit Suisse - the balance of the Resort not previously sold to private owners or the lien claimants listed above, tentatively scheduled for December 5.
c. Sale rescheduled. Credit Suisse had scheduled a sale for October 24, but on October 18, asked to have it canceled. On October 23, Credit Suisse applied for a new writ of execution (the order from the court clerk that authorizes the sheriff to conduct the foreclosure sale). Credit Suisse has confirmed to TMA that it will ask the Sheriff to conduct this sale on December 5.
II. West Mountain Golf LLC
A. Current foreclosure status. On June 28, 2013, the Retirement Security Plan and Trust (RSPT) sued Green Valley Holdings, LLC and West Mountain Golf to foreclose on a mortgage under which the Osprey Meadows Golf Course and much of the Lodge at Osprey Meadows is collateral.
Included in the collateral are:
Morel's
Lobby Bar
Pro shop
Dining Terrace
Hot tub
Swimming pool
Golf Course itself
Most of the space below the parking garage, used for golf and restaurant storage.
B. History of the WMG foreclosure. The West Mountain Golf foreclosure has as many twists and turns (although not the dollar value) of the Credit Suisse litigation. Here is a brief recap of that history.
1. Pacific Continental Bank
At about the same time that the golf course was being finished, TRLLC sold the course and the buyer, West Mountain golf, mortgaged the property. Pacific Continental Bank (PCB) loaned WMG a little over $3 million. The terms of the arrangement called for TRLLC to continue to operate the golf course and lodge amenities as a tenant. Shortly after Credit Suisse started foreclosure against Tamarack Resort, LLC, TRLLC stopped paying rent, which had been servicing the PCB note. Pacific Continental Bank likewise began foreclosure of its mortgage on the WMG assets, which were collateral for its note.
2. Green Valley
Eventually, Green Valley Holdings, the entity owned by Matt Hutcheson, acquire the PCB note and mortgage. As part of further efforts to obtain financing, Hutcheson borrowed a sum of money from a gentleman named James Fletcher out of Virginia, and pledged the note, but not the mortgage, as collateral for a loan from Fletcher. Because there was a short term on Hutcheson's borrowing from Fletcher, Fletcher declared default and exercised his rights to acquire the physical possession of the note. However, there were several procedural problems related to this transfer, including lack of endorsement of the note.
In the meantime, Hutcheson and Green Valley had continued with the foreclosure litigation. Ultimately, West Mountain Golf was successful in dismissing the foreclosure litigation on the basis that the note and deed of trust were no longer "in unity," that is, they were no longer held by the same ownership. Although a mortgage can be collateral for any obligation, the judge, in this particular case, on these facts, determined that the only obligation that the mortgage secured was the note, and because Hutcheson/Green Valley did not own the note any more, they could not maintain their lawsuit on the mortgage.
3. Special administrator
In 2012, Hutcheson was indicted for various violations of law related to misuse of the RSPT retirement funds. At the same time, the United States Department of Labor initiated a civil lawsuit which, among other things, called for the appointment of a special administrator. Pursuant to U.S. Department of Labor and Federal District Court supervision, an administrator named Jeanne Bryant was appointed as a special administrator to gather all of the assets and determine what, if anything, could be done to recover value to the retirement funds whose moneys had been used by Hutcheson in his effort to acquire Tamarack Resort.
Through multiple negotiations and transactions, Hutcheson/Green Valley granted Bryant the right to reacquire all of Green Valley's interest in the mortgage and note. Additionally, Fletcher made a conditional assignment of his interest in the note to RSPT. As a consequence, RSPT initiated the above-referenced foreclosure in June of this year.
4. Unknown future of foreclosure litigation
As with the Credit Suisse litigation, the West Mountain Golf/RSPT foreclosure is proceeding on tracks that involve both contested litigation and settlement discussion.
III. TMA's continued role in amenities
As with its history in managing the ski facilities, TMA is positioned to continue managing the golf course amenity, with homeowner support, presenting the likeliest opportunity for the golf course to stay viable and therefore marketable. TMA is not a party in the golf course litigation. TMA does, however, continue to manage most of the assets that are the subject of that foreclosure case.
As with Tamarack Resort LLC and the creditors in the Credit Suisse-TRLLC foreclosure, TMA has cordial relations with all parties. TMA understands that all parties wish for TMA to continue acting as a tenant-operator within the Lodge and the golf course, at least to the extent TMA has the resources for those operations and expenses.
Obviously, the optimum outcome would be for a single purchaser to acquire both the TRLLC assets (including the ski facilities) and the WMG assets (including the golf course) that have been subject to so much foreclosure litigation. However, that is an outcome that TMA does not necessarily influence, let alone control.
TMA will ramp up snow making operations in November and plans to open for skiing as scheduled on December 13th, 2013. TMA has arranged to manage ski operations now entering the forth winter and will continue operations after the Credit Suisse sheriff's sale.