Montana Ski & Golf Community Files for Chapter 7 Bankruptcy
October 26, 2011
By: Brenna Lemieux
LonePeakLookout.com, a Montana newspaper, reported recently that Spanish Peaks, a private ski and golf community in the Big Sky, Montana, has filed for Chapter 7 bankruptcy protection. The club reportedly sent a letter to its members divulging its financial distress four days before filing the Chapter 7 petition with the court.
In the letter, it seems the resort owners recommended that guests make alternate arrangements for their visits to Big Sky, as the resort did not anticipate remaining open this skiing season. But apparently not everyone was well informed about the company’s plans: according to sources, employees of the club had anticipated continued work, knowing nothing about the financial problems until the bankruptcy petition was actually filed.
Court documents reveal that Spanish Peaks identified between $10 million and $50 million in assets and between $100 million and $500 million in debts in its Chapter 7 petition. Reports note that the club’s manager cited a weak real estate market and unsustainable operating losses as its primary reasons for filing.
Spanish Peaks will reportedly not remain open during the Chapter 7 bankruptcy proceedings. Rather, the court will be able to liquidate its assets to repay creditors some or all of the debts the club owes. Those creditors, it seems, include several Big Sky businesses, including Big Sky County Water, Big Sky Publishing, Big Sky Resort Area District, Big Sky Resort, High Country Paving, Kleen King, Walker Excavation, and others.
Other Troubled Area Resorts
While the Chapter 7 filing of Spanish Peaks may have taken workers off guard, it is not the first time a resort in Big Sky has faced financial troubles in recent years. In 2008, according to sources, Yellowstone Club, a ski and golf club situated directly next to Spanish Peaks, also filed for Chapter 7 bankruptcy.
And in 2009, it seems the nearby resort and real estate development Moonlight Basin also sought bankruptcy protection. But Moonlight Basin managed to reorganize under Chapter 11 bankruptcy
, and is still operational today. Its financial troubles were sparked when its primary lender, Lehman Brothers, went under at the beginning of the economic downturn.