Editor’s note: This article by Chris Mays was published by the Brattleboro Reformer on April 23.
[N]EWFANE — The Hermitage Club has been given 10 days to respond or object to Berkshire Bank’s motion to appoint a receiver who will manage the company’s foreclosed assets.
“If no objections are filed, the court will schedule a hearing on the specifics of the terms of appointment of a receiver,” Judge John Treadwell wrote in a court filing last Tuesday, giving the Hermitage until Friday to respond. “If any objection is filed to the motion for appointment of a receiver, the objecting party and Plaintiff shall inform the court of their position on the appropriate length of any scheduled hearing.”
Treadwell expects any hearing on the motion to appoint a receiver to be held in early May. He asked parties to bring any potential scheduling conflicts to the court’s attention as soon as possible.
In February, Berkshire Bank had filed for foreclosure on Hermitage properties in Dover and Wilmington after the company failed to make payments on three loans totaling $17.1 million. Those properties included the company’s private ski resort and base lodge at Haystack Mountain, the Hermitage Inn, a golf course, Chamonix townhouses, the Snow Goose Inn, the Horizon Inn, the Doveberry Inn, second homes under construction, and other properties.
The foreclosure complaint has 35 liens from vendors and contractors for bills and claims the Hermitage cannot pay.
Mortgage agreements give Berkshire Bank the right to seek the immediate appointment of a receiver.
“Hermitage is no longer a going concern able to pay its bills as they come due,” Elizabeth A. Glynn, attorney for Berkshire Bank, wrote under a section for facts supporting the appointment of a receiver in the bank’s “emergency motion” to do so. The Hermitage “was shut down by the Vermont Department of Taxes for a third time in March on March 30 … The company was ordered not to conduct any business.”
The Hermitage had given the town of Wilmington a check for a lease payment for leased land at the ski area but then told town officials not to cash it, according to to the motion. Payments for Feb. 1, 2018, to next Jan. 31 were made by the bank in order to keep the lease, Glynn wrote.
The bank provided the town of Dover about $74,000 and the town of Wilmington about $660,322 for delinquent taxes to avoid tax sales, according to the motion. Suburban Propane was paid about $48,259 for an “emergency fuel delivery” and Green Mountain Power was paid about $82,554 to keep the power on until May 6. Glynn noted the existence of fraud allegations in lawsuits outside of the Berkshire Bank foreclosure.
Last Monday, the bank had moved for “the emergency appointment of a receiver to take possession and control of the real and personal property that is the subject of this foreclosure action.”
The bank requested Alan Tantleff of FTI Consulting in New York City be appointed as receiver. Tantleff “has demonstrated the ability to manage high-end private club resorts like the Hermitage in receivership,” Glynn wrote. Tantleff’s resume boasts of managing 53 resort and hospitality properties in receivership or debt restructuring including Talisker Club in Utah, Yellowstone Club in Montana and Sea Island in Georgia.
The receivership, Glynn said, is needed so that the court has the means to “preserve, protect and maintain” the property pending the foreclosure and public auction.
The receiver, on behalf of the court, would take “possession and control of all Hermitage real and personal property” and business records pending the sale, Glynn said in her motion. It would be able to access and review all company mail and email except personal or privileged attorney-client correspondence.
The receiver would pay municipal assessments, utility bills, lease payments to municipal entities required for keeping the lease on the Haystack Mountain ski area, security contracts and maintenance bills. Quarterly accounting reports would be made to the court.
The receiver would be expected to cooperate and coordinate with the auction company that will hold the public auction of the properties.
Bob Fisher, the Hermitage’s attorney named in the bank’s motion to appoint a receiver, could not be reached for comment.