The debts of Premier Resorts may not be payable
Efforts to recover money for creditors of Premier Resorts of Utah (formerly doing business as Deer Valley Lodging) continue, but nothing on the immediate horizon offers hope to the 500 Park City home owners due thousands in late winter rental revenues.
Steven Bailey, the trustee assigned to the Premier Resorts bankruptcy, said he’s still looking at avenues to recover $20 million owed the company by its parent entity Premier Resorts International (PRI). Unfortunately, when PRI lost most or all of its contracts with properties across the United States in late summer 2008, it consequently lost its revenue stream. Its ability to do business was its primary asset.
"The type of business PRI is in its most valuable commodity is its name and its ability to market on a national basis these various properties," Bailey said Monday.
Once the company lost those contracts, it simply ceased doing business, he said.
Various bank accounts held by PRI that may be emptied for payment to creditors don’t hold more than $50,000 total, he said. The debts are nearly $13 million.
If Bailey receives a judgment against PRI for the $20 million (which would more than cover its debts to Premier Resorts of Utah creditors), he said he isn’t sure what there is to collect.
If PRI itself declares bankruptcy to seek protection from its own creditors, a different trustee would be appointed to that case and Bailey’s efforts would be subjugated under that proceeding.
If Bailey is able to recover any money, the creditors first in line are the federal and state governments owed almost $4 million in unpaid taxes.
So the trustee and the attorneys working for him are still investigating as to whether there are any assets PRI has that can be collected. They’re checking into possible real estate holdings, hard assets and money owed to PRI from third parties even compensation for unlawfully terminated contracts.
When PRI lost its contracts, and therefore its ability to generate income, it’s possible not all its business partners had a right to cancel them. If damages can be collected, Bailey said he’ll explore that option to recover the money for the creditors.
"The direction I want to take is to leave no stone unturned. That doesn’t mean we’ll end up collecting anything especially with taxing authorities owed with a priority claim," he said. "But we’ll leave no stone unturned to pursue money for unsecured creditors if that’s possible."
He said principals Barbara Zimonja and Bradley Goulding are doing nothing to oppose the process, but that’s because they aren’t personally accountable unless the "corporate veil is pierced" (a judge rules a principal is liable for the debts of a limited liability company).
Creditors of David Holland Resort Lodging (a "doing business as" name for Crossways Corporation), have had no success with that strategy in their own attempts to collect from that company.
The financial trouble of both companies began last spring when they announced to condominium owners that they could not pay out nightly-rental profits for January, February and March. Last summer, Premier Resorts of Utah declared bankruptcy, and not long after David Holland’s Resort Lodging ceased operations. Around 800 home owners were affected, as were dozens of vendors and clients.
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Buses, trains and gondolas doesn’t have quite the same ring to it, but they make up the transit alternatives for the mountain transportation system the Central Wasatch Commission is trying to create, mostly in the Cottonwood canyons.