Midway’s Zermatt Resort sold
August 13, 2010
The former co-manager of the Zermatt Resort is calling foul play after a change of ownership was orchestrated at the Wasatch County courthouse last Monday.
Developer Jaren Davis was partners with resort founder Robert Fuller in saving the Zermatt from debt until Fuller and his attorney Kim Wilson founded Legacy Resorts, acquired the mortgage from the lender, foreclosed on it, and then acquired it through an auction last Monday.
As a result, Davis says he and all of his fellow investors in the resort and the Zermatt’s creditors are out their money while his partner still retains partial ownership.
The change in ownership does not include the residential units or the homeowner associations, Davis said.
Davis said he knew of the plan for Legacy Resorts to take over, and could have been part of it, but refused on grounds of ethics and morality.
""This was a scheme that was devised and planned for some time," he said Friday.
Recommended Stories For You
Robert Fuller was contacted for comment but said he would prefer a press release speak for him. It was scheduled to be issued Friday afternoon, he said. His attorney Kim Wilson was not available.
Davis describes the plan for Legacy Resorts LLC to take over from Zermatt Resort LLC as one family betraying another.
One of the primary creditors on the resort is Jennifer Speers, a Salt Lake City philanthropist known for buying land near Moab and turning it over to conservation groups.
According to Davis, Wilson’s brother Randon did some work for Speers’s father. In doing so, he benefited greatly financially and achieved community prestige from the connection. As a friend, Randon convinced the family to invest in the Zermatt. After her father’s death, Speers lost interest in loaning money to the resort, thereby leading to the financial crisis it is in today.
"Some of us of spent our last dollar up there trying to keep resort going," he said.
Davis says he fought attempts proposed by his business partners to save money such as withholding payments to the residential unit owners for their share of rental income and delaying the payment of taxes and bills.
Some time ago while Jan McCormick was still Zermatt general manager, Davis said the Wilsons devised a legal strategy to form a new entity and have it take over the resort without acquiring its debt. Davis says he was disturbed that the Wilsons would advocate a strategy whereby a family they had benefited from would lose out on millions of dollars.
Davis said he doesn’t know exactly how the new entity, Legacy Resorts, acquired the mortgage because he was cut off from the group after he notified Speers’s attorney of the plan.
"I got up from that meeting with an ache in my gut," he said. "I thought all the way home, ‘I’m not going to do it. I don’t have a price tag on my integrity. It could mean we could lose everything but we’re not going to do it.’"
Davis said he and other investors attempted other means to raise the money needed to save the Zermatt. For example, Davis said he had a parcel of land in a preserve he thinks Speers may have been willing to accept as payment. Ultimately, they failed.
Randon Wilson was reached Friday and said he has no axe to grind with Davis and appreciates the sacrifices he made to help the Zermatt succeed, but his story is incorrect.
Wilson said he was Zermatt’s attorney for many years, but quit before the formation of Legacy because he wasn’t being paid. His brother represents Legacy, but works for a competing firm.
He did work with Speers’s father while attorney for Zermatt, but did not advise him on the loans because it was a conflict of interest. The family’s lawyers are responsible for that, and they were invited to join Legacy Resorts but declined.
Any investor or creditor who did not join Legacy, including Davis, made that decision because they were required to invest new money, he said.
Attempts to save Zermatt Resort LLC as a business entity did not succeed because new investors would not receive priority as creditors were it to fail, he said. The new investors did support Legacy because they received top priority. That is how it got the funding to purchase the note from the lending institution, he explained.
"The fact that the Legacy group acquired the first mortgage to prevent the resort from being closed is an interesting fact, but not out of the ordinary. Many times people come in and buy the first trust deed so they can bid on it at the sale. That gives them a leg up in terms of ending up with property in the sale," he said.
His top priority when he was counsel to Zermatt was to keep the resort open at all costs. It is a major employer and important to the health of the community, he explained.
Wilson said Davis had ceased to work as co-manager of the resort some time ago and doesn’t have all the facts.
"I can’t understand why someone would go out of their way to spread information that is inaccurate and unfair," Wilson said.
View Zermatt Resort in a larger map