Wells Fargo initiates massive foreclosure case against Talisker
March 7, 2015
Wells Fargo has filed a lawsuit against a group of firms under the Talisker corporate umbrella and others seeking to foreclose on $163.8 million worth of loans and accrued interest linked to prominent properties like Tuhaye and the Talisker Club.
The lawsuit, filed on Feb. 27 in 3rd District Court at Silver Summit, is the second spectacular case involving the Talisker corporate family after the highly contentious courtroom drama against the former owners of Park City Mountain Resort that ended with the sale of the resort.
Wells Fargo names 14 defendants in the lawsuit. Some of them include Talisker Finance LLC, United Park City Mines Company, Tuhaye LLC, Tuhaye Golf, LLC and Empire Pass Club LLC. Talisker Land Holdings, LLC, the firm that tangled with the former PCMR owners, is also named as a defendant. Two entities under the umbrella of Stitching Mayflower were also named as defendants.
The loans date to the fall of 2010, when Wells Fargo and Bank of Scotland reached agreements to provide the loans. A firm called Midtown Acquisitions, L.P. later acquired the Bank of Scotland’s interest in the loans. According to the lawsuit, the loan agreement was modified four times between late 2011 and late summer 2014. Wells Fargo serves as the administrative agent for both lenders.
When the loan was modified the second time, Talisker Finance LLC executed an updated promissory note, dated Dec. 20, 2013, with Wells Fargo.
The promissory note’s principal amount was a little less than $76.5 million, the lawsuit says. The same day, a promissory note with a principal amount of approximately $66.9 million was executed with Midtown Acquisitions, L.P., it says.
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Talisker Finance LLC was required to repay the loan by April 30, 2014, but the firm failed to do so, the lawsuit says, describing that the failure was a default event. On June 26, 2014, the sides reached an agreement that called for the lenders to not move against Talisker Finance LLC at that point and to continue to provide funding to the firm, according to the lawsuit. Talisker Finance LLC, though, was required to meet performance requirements centered on sales of real estate that was the collateral on the loans, it says. Talisker Finance LLC also said it would not contest a receiver being appointed in the case. A receiver would oversee the assets.
The maturity date of the loan could have been pushed back to Nov. 30, 2014 under the condition that, by Aug. 29, 2014, a buyer signed a contract for all or portions of the real estate collateral, the lawsuit says. It says a deal would have needed to generate $25 million in proceeds by Sept. 30, 2014.
The lawsuit says two firms under the Tuhaye moniker on Aug. 18, 2014 reached a deal to sell some of the real estate collateral to an unidentified purchaser. The sale, though, was at a price that would not generate enough proceeds, leading to more talks between Talisker Finance LLC and the lenders, the lawsuit says. The lenders agreed to allow the sale and to provide more funding for Talisker Finance LLC’s expenses under the condition that the sale closed on Sept. 30, 2014 or earlier, it says, claiming that the sale did not close on the Sept. 30, 2014 schedule. Talisker Finance LLC then "failed to pay the Loan in full," the lawsuit says.
There was a round of negotiations that did not result in another loan modification. The lenders have provided more than $7 million to fund Talisker Finance LLC’s operations since April of 2014, the month when the firm was initially required to repay the loan, according to the lawsuit.
The $163.8 million sought by Wells Fargo was calculated on Feb. 12. It includes the principal of the promissory notes and interest calculated during different periods.
The lawsuit seeks the foreclosure and sheriff’s sale of the real estate collateral, a judgment against Talisker Finance LLC for any sum of money owed after a sale and a judgment that the lenders are entitled to operate the Talisker Club, among other judgments.
The real estate collateral includes lots and related amenities in Tuhaye, lots and related amenities in the Empire Pass subdivision of Red Cloud and undeveloped land in Summit County and Wasatch County, according to the filing. The collateral does not involve property comprising any portion of the three Park City-area mountain resorts.
A Wells Fargo spokesperson on Thursday provided a prepared statement in response to a Park Record request for comment: "Wells Fargo has been working with the borrower for some time in hopes of achieving a resolution that would allow the borrower to remain as owner of the collateral and repay its loan obligations. Unfortunately, the loan remains in default. We have requested that the court appoint a receiver to assist with the operation and sale of the loan collateral. We will work with the receiver in this process and look forward to finding a long-term solution that takes into consideration the needs of the community."
A representative of the Talisker corporate family did not immediately return a phone message seeking comment.
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