Lawsuit: Talisker entities undertook ‘elaborate scheme’ to avoid repaying loan
Midtown Acquisitions, L.P., a financial firm, on Wednesday filed a lawsuit against entities under the Talisker corporate umbrella, entities linked to Talisker chief Jack Bistricer and Bistricer himself that centers on a $150 million loan dating back more than a decade.
The lawsuit, filed in 3rd District Court at Silver Summit, outlines a 2006 loan of $150 million to Talisker Finance LLC meant to fund the purchase and the development of land in Summit County and Wasatch County that is next to the mountain resorts. The loan was modified over the years as it was not repaid in full before the loan was described as in default in the fall of 2014, the lawsuit outlines.
A foreclosure action followed in 2015. The lawsuit says the lenders generated approximately $88.9 million through the foreclosure and collections processes. As of the end of October 2018, another approximately $107.4 million was owed.
But the lawsuit claims Bistricer in late 2015 had some of the firms named as defendants transfer interests in entities controlled by himself to another entity under his control, called Hampstead Equities GP Inc., for a $1.5 million payment.
The lenders were not aware of the transfers at the time they occurred, it says, outlining that the value of the transferred interests was pegged at a minimum of approximately $41.3 million. The sum is far higher than the $1.5 million payment, the case notes.
“The assignment orchestrated by Bistricer, and accomplished through the various entities he owns or controls … was intended to, and did, hinder, delay, and/or defraud Plaintiff in its efforts to collect on the Loan,” the lawsuit says.
It labels the move a “fraudulent transfer scheme.” It also says the defendants “are alter egos of each other” and are “insiders and affiliates of one another.” The lawsuit says the entities named as defendants are “owned solely or substantially, directly or indirectly, by Bistricer and/or members of Bistricer’s family.” They are also “managed and controlled in voting, operations (if any), and decision-making by Bistricer, either directly or indirectly.”
The entities also are believed to be “undercapitalized, fail to observe corporate formalities, do not pay dividends except as dictated by Bistricer, are used by Bistricer to siphon funds, have non-functioning or non-existent officers or managers other than Bistricer, fail to maintain corporate records, and are used merely as a façade for Bistricer and one another,” the lawsuit says.
The Midtown Acquisitions, L.P. side summarizes the case by pointing to Bistricer as the key figure in the dispute.
“This case involves a $150 million loan, multiple defaults followed by judgments against defaulting parties, and an elaborate scheme involving affiliates of the Borrower and guarantors to avoid repaying the loan. At the center of this scheme is one man, Bistricer, who owns and operates a network of corporations, limited liability companies, and real property assets primarily under various iterations of the name ‘Talisker,’ the lawsuit says.
It claims Bistricer, “signing on all sides of various transactions, directed his entities to transfer their membership interests in down-stream subsidiaries (which ultimately owned real property assets at the Canyons Resort and Deer Valley Resort) to another newly created Bistricer-controlled entity, Hampstead, that was not liable to Plaintiff on account of the loan or judgment, for essentially little to no value.”
The lawsuit seeks a judgment for the value of the assets transferred, a court declaration that the defendants “in fact are alter egos of one another … and therefore that all Defendants are liable for the debts and obligations of one another” and the appointment of a receiver to oversee the transferred assets, among other measures.
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Arlene Loble served as the Park City manager in the 1980s, a pivotal period that prepared the community for the boom years that would follow in the 1990s. Loble, who recently died, is credited with introducing a level of professionalism to the municipal government that was needed amid the growth challenges.