News from the Knoff Group

Update: Spanish Peaks assets for sale – Bids accepted until April 19.

Spanish Peaks Cabin Plan by Boris ReytI wrote a post about the status of the Spanish Peaks reorganization and sale earlier this year.  This can be viewed here.

Here is an update on the saga. This article ran in the Bozeman Daily Chronicle on April 1. And luckily it wasn’t an April Fools joke! Someone is going to get a fantastic deal…

by Jason Bacaj, Business Journal

Spanish Peaks, a swank 5,700-acre club in Big Sky, closed and laid off its staff Monday, citing a troubled real estate market and substantial operating losses.

Assets at Spanish Peaks, everything from real estate to furniture, are being sold about 17 months after the resort filed for bankruptcy.

Bids are being accepted until April 19, according to court documents. The bankruptcy trustee will disclose the highest bidder May 2, and the highest bid will be set as the opening price in an auction scheduled for the morning of June 3, to be followed by a hearing on the sale that afternoon.

The trustee is working with Eastdil Secured, an international real estate investment company, to solicit bids on the properties.

A trio of Spanish Peaks companies filed for Chapter 7 bankruptcy in October 2011, citing a troubled real estate market and substantial operating losses. At the time, the resort closed and its employees were laid off.The Club at Spanish Peaks was a ritzy, 5,700-acre private residential community in Big Sky that offered access to local ski areas and included a private Tom Weiskopf-designed 18-hole golf course.

Spanish Peaks Clubhouse Plan by Boris ReytIn August 2005, Spanish Peaks Holdings had obtained a loan from Credit Suisse to pay for construction and development of the resort. The next year, Spanish Peaks Holdings hired Dick Construction Co. as the general contractor to build the lodge. The construction company then hired area subcontractors to provide service and materials. Construction began in June of that year.In September 2006, Spanish Peaks Holdings got a bridge loan from CitiGroup in Montana to pay off the Credit Suisse loan. Two months later, CitiGroup refinanced the bridge loan with a permanent loan. Each loan was secured with a mortgage encumbering all of Spanish Peaks Holdings’ Montana property.

In June 2008, Spanish Peaks Holdings quit paying its contractors and suppliers. Spanish Peaks Holdings “quit paying altogether” in late 2008, court records indicate.Secured creditors filed construction liens — a legal claim on another’s property to secure payment of a debt — against Spanish Peaks.

In March 2010, CitiGroup and Spanish Peaks Holdings refinanced the loan and formed Spanish Peaks Holdings II in Delaware. In April 2011, Spanish Peaks Acquisition Partners purchased CitiGroup’s interest in the mortgages.The entities holding assets at the Spanish Peaks community filed for bankruptcy in October 2011 in Delaware. In January 2012, the case was transferred from Delaware to Montana.

Nearly all the subcontractors who filed liens against Spanish Peaks Holdings and who were listed as secured creditors in bankruptcy court have been paid back by the bankrupt entities.