BOISE – A federal judge on Tuesday dismissed Tamarack Resort’s bankruptcy case from federal Chapter 11 protection, sending it back to state court, where foreclosure proceedings may eventually proceed to a sheriff’s sale.
Idaho investment group Green Valley Holdings, which last year offered to buy Tamarack for $40 million, told the Associated Press the decision could complicate a sale, though it’s still committed to buying and resurrecting the vacation development 90 miles north of Boise.
Still, Tamarack majority owner J.P. Boespflug lamented the decision.
He says keeping the case in Chapter 11 protection offers the clearest and easiest path for disposing Tamarack’s assets as a whole while paying at least some money to creditors, including a lender consortium led by Credit Suisse Group that is owed more than $350 million combined.
“We were so close – the judge knows that we are so close,” Boespflug said, adding he may ask the judge to reconsider. “It’s illogical from the interest of all creditors. The judge, quite frankly, is creating a mess.”
Lawyers for Credit Suisse had urged U.S Bankruptcy Judge Terry Myers to convert Tamarack’s case into Chapter 7 liquidation or send it back to state court to begin foreclosure, arguing Boespflug had proven himself incapable of managing the property or finding a buyer.
A New York City-based spokesman for Credit Suisse, which previously indicated in court documents that it opposed Green Valley’s offer while the resort was in a Chapter 11 bankruptcy, declined to immediately comment on Tuesday’s ruling.
A 4th District Court judge in Idaho is still busy determining who among the resort’s secured creditors is first in line to be repaid. There have been a series of trials since September.
Once that’s complete, foreclosure proceedings could include determining the value of Tamarack’s assets, then eventually a sheriff’s sale to recoup at least some of the millions Tamarack has failed to pay banks, contractors and others for work on the central Idaho getaway before it collapsed in 2008.
Whether the resort would be sold off in pieces or together was unclear.
Tuesday’s ruling comes just weeks after Boespflug had chosen Green Valley Holdings as a potential buyer for the financially troubled ski, golf resort and real-estate development. Had his plan succeeded, its $40 million offer could have become the basis for an auction.
Matthew Hutcheson, a founder of the Eagle, Idaho-based investment company, said his group would work with creditors on a transaction in state court to complete the sale.
“It doesn’t change our commitment. It may change our approach slightly,” Hutcheson said Tuesday after Myers’ decision. “As far as we are concerned, we are still intending to be the future owners of the resort. We’ll just have to wait and see how flexible each individual creditor is.”
In addition to Myers’ ruling Tuesday, the judge decided last week to allow the leasing division of Bank of America Corp. to take control of two ski lifts that Boespflug and his partners at Tamarack couldn’t pay off. The Bank of America lifts aren’t among those being used for the current ski season at Tamarack.
Homeowners who bankrolled the ski season in hopes of making the resort more attractive for a buyer say Myers’ decisions will have no effect on their operation.
“Our negotiating position always took into account that there could be midseason court rulings in the case, and we were careful to secure approvals that allow us to continue to offer a ski and ride experience that has drawn thousands of people,” said Tim Flaherty, executive director of Tamarack Municipal Association.
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