Pacific Group Resorts presented the highest bid for the Jay, Vt. property, which has been in receivership for more than six years. In 2017, Ariel Quiros and William Stenger, owner and President of the resort, were accused by the U.S. Securities and Exchange Commission of misusing more than $200 million raised through the EB-5 visa program. Both are currently in federal prison.
Michael Goldberg, the court-appointed receiver overseeing Jay Peak Resort in Jay, Vt., provided a new look Sept. 16 into an auction of the ski area, and he gained the approval he was seeking to sell it to the highest bidder, VTDigger reported. Goldberg also revealed that another Vermont property under his control, Burke Mountain Resort, may soon be sold.
Both ski resorts had been owned by Ariel Quiros and embroiled for years in the largest fraud case in state history, VTDigger reported. C+RB reported in August 2017 that Ariel Quiros and William Stenger, owner and President of the resort, were accused by the U.S. Securities and Exchange Commission (SEC) of misusing more than $200 million raised through the EB-5 visa program.
Goldberg had said in a court filing that Pacific Group Resorts Inc., of Park City, Utah, bid $76 million for Jay Peak, which has been in receivership for more than six years, VTDigger reported. Pacific Group Resorts had made an initial bid of $58 million for Jay Peak, according to earlier court filings leading up to the auction.
Goldberg had provided little information about the daylong, closed-door auction, not even revealing the number of other bidders that took part, VTDigger reported. However, during a hearing Sept. 16 to approve the sale of the resort, Goldberg provided a glimpse of what took place during the auction. The hearing was held over video from U.S. District Court in Miami.
According to Goldberg, two other bidders, who he did not identify, took part in the auction, offering initial bids of $60 million and $61 million, VTDigger reported.
“There were about 48 separate bidding rounds,” he told the judge.
Goldberg told the judge that after a roughly $5.2 million sewer bond the resort is on the hook for, as well as broker and other fees associated with the transaction, he expected to net about $70 million from the sale, VTDigger reported. Those funds would then be distributed to defrauded Jay Peak investors.
“We expect the distribution, or I do, [based on a] preliminary back-of-a-napkin estimate to the creditors of Jay Peak, the investors, to be somewhere around 40 cents on the dollar, your honor,” the receiver said.
Goldberg said he would provide the court with the exact figures following the closing of the sale, which is expected to take place around Oct. 15, VTDigger reported.
Pacific Group Resorts owns a handful of other ski areas in the United States and Canada, including Ragged Mountain in New Hampshire and Powderhorn Mountain Resort in Colorado, VTDigger reported. Jay Peak Resort is valued on the town of Jay’s grand list at about $85 million, having been assessed as high as $121 million in 2020 but reduced following a challenge to the figure from resort officials.
Quiros, Jay Peak’s former owner, as well as Bill Stenger, Jay Peak’s past president, and William Kelly, an adviser to them, are all in federal prison, VTDigger reported.
State and federal regulators began enforcement actions against Quiros and Stenger in April 2016, landing the resort in court-appointed receivership, VTDigger reported. Regulators accused the two men of misappropriating $200 million of the more than $350 million they raised from foreign investors for massive upgrades at the ski resort through the federal EB-5 visa program.
Those enforcement actions were resolved with financial settlements with Stenger and Quiros, which included Quiros surrendering his ownership stake in both the Jay Peak and Burke resorts, VTDigger reported. Three years after the civil enforcement, Quiors, Stenger and Kelly were indicted on federal criminal charges related to a separate project they orchestrated to build a $110 million biomedical research facility in nearby Newport. All three eventually reached plea deals with prosecutors.
The Sept. 16 hearing took place in a Florida federal court because that is where Quiros was living and where many of his businesses were based when the civil enforcement action was filed in 2016, VTDigger reported.
Goldberg said during the hearing that the sale remained contingent on the “assignment” of state leases currently with Jay Peak to Pacific Group Resorts, which he did not anticipate would create a problem, VTDigger reported. Judge Darrin P. Gayles then approved moving forward with the sale to Pacific Group Resorts. “I do note that this is a fair resolution,” the judge said. “It’s actually a pretty good resolution.”
Goldberg also said during the hearing that the sale of Burke Mountain Resort might be soon at hand. He did not disclose the potential buyer, VTDigger reported. Goldberg had testified at a court hearing earlier this year that he was pursuing a deal with Burke Mountain Academy, a world-class ski training school, involving some of its benefactors.
“We’re in discussions on a potential sale of that and we would go through the same process as we did here and bring that before your honor,” Goldberg told the judge Friday. “Again, we will never take any major step without coming before your honor and getting your approval.”