Crime and Justice

New possible bidder may delay hearing on sale of Jay Peak resort

The Tram Haus Lodge at Jay Peak Resort on Friday, June 7, 2019. File photo by Glenn Russell/VTDigger

There is another possible bidder, and maybe more, seeking to purchase Jay Peak ski resort as it emerges from a financial scandal that landed both its former owner and past CEO in prison.

The identity of any potential bidder, however, has not been revealed. 

Earlier this month, Michael Goldberg, the court-appointed receiver in charge of overseeing the ski resort in Vermont’s Northeast Kingdom, stated in a filing in federal court in Florida that Pacific Group Resorts Inc. had offered an initial bid of $58 million for Jay Peak.

At that time, Goldberg asked a judge to allow him to continue to seek qualified buyers and, if a matching or higher price is offered, hold an auction to sell the resort. 

The judge agreed to that request and set a hearing for Friday, Aug. 26, to take up the sale of the ski resort.

Goldberg, through his attorney, Catherine D. Kretzschmar, submitted a filing Thursday seeking to delay that hearing.

“As of the filing of this Motion, the Receiver believes that a competing bid may be submitted for the Jay Peak Resort,” the filing stated, adding that the deadline set for competing bids is Sept. 2. 

“If a competing bid is submitted, the Receiver intends on conducting the Auction on September 7, 2022,” the filing stated.

Goldberg asked Judge Darrin P. Gayles to reschedule a hearing regarding the sale of the resort to any date after Sept. 9 to allow him time to conduct an auction for the ski area if a competing bid is submitted.

Gayles had yet to rule on the filing by late Friday morning, though he has generally followed Goldberg’s lead when dealing with scheduling matters throughout more than six years of the receivership of the resort. 

Goldberg could not be reached Friday morning for comment.

Steve Wright, Jay Peak’s general manager, said there has been a “pretty sharp increase” in interest since news of Pacific Group Resorts' initial bid of $58 million had been reported earlier this month.

“There are multiple potential (and incremental) bidders at this point, but not at liberty to really disclose specifics at this point,” Wright said in an emailed response to VTDigger’s inquiry.

Goldberg, in his filing earlier this month, referred to Pacific Group Resorts offer as a “stalking horse” bid.

That filing stated that if no other qualified bid comes in, Goldberg “may thus deem” Pacific Group Resorts’ bid the “highest or otherwise best offer” and move forward with completing the transaction. The judge would still need to approve the sale.

If at least one other qualified bid is submitted, the filing stated, an auction would take place with bidding starting at the $58 million from Pacific Group Resorts. The bidding would then increase with an “initial bid increment” of $1.75 million or higher, followed by bid increments of at least $250,000.

Jay Peak officials in 2020 appealed the town’s grand list value of the resort of $121 million. An eventual settlement between Jay Peak officials and the town resulted in an assessed value of about $85 million. 

Pacific Group Resorts, based in Pak City, Utah, owns several ski resorts, including Ragged Mountain in New Hampshire and Powderhorn Mountain Resort in Colorado.

The resort has been on the market for the past couple of years, though Goldberg, in his court filing earlier this month, said it was time to move the sale process forward. 

Ariel Quiros, Jay Peak’s former owner, and his former business partner, Bill Stenger, Jay Peak’s former president, are both serving time in federal prisons.

The two men and former business partners had used the federal EB-5 visa program to obtain money from foreign investors to pay for massive upgrades at Jay Peak, including new hotels, condos and a water park.

The EB-5 program allowed foriegn investors who put up at least $500,000 for a qualified project to obtain U.S. residency, or a green card, provided that investment could meet job-creating requirements. 

Separate lawsuits brought by federal and state regulators in April 2016 alleged Quiros and Stenger misused $200 million of the more than $350 million they raised from EB-5 investors.

Quiros, according to the lawsuits, was accused of siphoning off more than $50 million for himself, using some of those funds to buy a luxury condo in New York City.

Quiros and Stenger have since settled those civil enforcement actions, with neither denying nor admitting fault.

Three years after those enforcement actions were brought, both men were indicted on federal crimes in connection with another EB-5 financed project to build a $110 million biomedical research center in Newport, known as AnC Bio Vermont.

That project never got off the ground, and was later termed by federal regulators “nearly a complete fraud.” Quiros was sentenced to serve five years and Stenger received an 18-month prison term. 

Goldberg has stated in past court filings that proceeds from the resort’s sale would be given out on a “pro rata” basis to the defrauded investors. 

Goldberg’s filings related to Jay Peak have been submitted in U.S. District Court in Miami because that is where federal regulators brought its enforcement action against Quiros in April 2016. Quiros, at that time, had been living in Florida and many of his businesses were based in that state.

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