Schweitzer Mountain Resort, deep in debt and up for sale, has become a jinx of sorts for would-be buyers.
A Seattle firm’s bid for the ski hill boosted spirits in Sandpoint earlier this year, but the deal with Harbor Properties is floundering.
And a Texas company that made a move months ago to buy Schweitzer now is out $1 million for its efforts.
Harbor Properties signed an agreement to buy Schweitzer from the Jim Brown family for $18 million. That deal is being contested in court by two family members.
The Texas company, Charterhouse Financial Limited Inc., bypassed the Brown family and went straight to U.S. Bank. The bank has loaned about $21 million to Schweitzer. The resort has been unable to repay the loan and the bank holds most of the resort and mountain property as collateral.
Charterhouse signed a deal to buy the notes from the bank for $18 million. The agreement basically would have given Charterhouse control of the ski hill.
The company made a down payment of $1 million on the notes. But the arrangement collapsed when Charterhouse could not come up with the remaining $17 million, said U.S. Bank attorney Peter Holmes.
“They (Charterhouse) filed for Chapter 11 bankruptcy just prior to having to pay the remaining $17 million balance,” Holmes said.
The bank contested the bankruptcy filing, saying it was in bad faith and done so the company could renege on its $18 million agreement. A judge agreed with the bank. Charterhouse’s bankruptcy filing was dismissed Sept 29. The company had to forfeit its $1 million down payment.
Attorneys for Charterhouse did not return calls. Holmes said he does not know whether the company wanted to help the Brown family retain the resort or sell it to another buyer if the deal had gone through.
Schweitzer is about $28 million in debt and is being run by court-appointed Sandpoint attorney Ford Elsaesser. He was charged with selling the ski hill to help repay the bank debt.
Elsaesser hoped to close a sale months ago with Harbor Properties, which also owns the Stevens Pass Ski area.
The Brown family approved the sale for $18 million. But two family members, Gene Brown and Bobbie Huguenin, backed out, saying the resort is worth $66 million. They filed a lawsuit to halt the sale.
Federal Judge Edward Lodge is supposed to rule within two weeks on whether to allow the sale. If the sale is quashed, U.S. Bank could foreclose on the resort after the ski season and sell it without the Brown family’s consent.
“Things are tenuous and in a very delicate stage but we are ready to go if we can make the deal work,” Elsaesser said. “I’m very concerned about keeping Harbor at the table, but so far they have stood by their commitment.”
Not long ago it was doubtful the resort would open this year because of a lack of cash for operations. U.S. Bank saved the ski season by loaning Schweitzer another $750,000.