Moonlight Basin has been granted a multi-million dollar loan - money that ensures the ski resort will stay open for the next 18 months.
This morning, U.S. Bankruptcy Judge Ralph Kirscher signed off on a $24 million dollar loan from Lehman Brothers - the same company which is foreclosing on a $100 million loan it made to Moonlight Basin in September 2007.
Lawyers for both parties urged the judge to decide quickly on whether to allow the loan, saying cash was needed to make sure the ski hill would be able to open later this week.
Moonlight's attorney says the resort will use some of the money from the bank to investigate whether Lehman defrauded the ski resort with the previous loan.
The chair lifts will fire up for season-pass holders on Friday and the general public on Saturday.
(November 25, 2009) Moonlight Basin representatives say chair lifts at the ski resort will be up and running next month.
A bankruptcy judge said on Tuesday that the resort can use money from a recent sale of a $1 million condo to conduct business as usual at the resort. Company officials say that ruling will ensure a December opening of the ski slopes.
The New York-based investment firm Lehman Brothers moved to foreclose on Moonlight Basin in September, saying the resort defaulted on a $92 million loan.
A bankruptcy judge on Tuesday also gave the resort permission to use funds in its bank account, as well as between $152,000 and $180,000 wired to Moonlight by Lehman just before the bankruptcy filing.
A hearing is now set for December 7 when Moonlight Basin is expected to ask the judge to approve a $23 million loan from a Connecticut-based hedge fund to provide longer-term financing.
Moonlight Basin announced last week it was filing for Chapter 11 bankruptcy protection.
The decision to file for Chapter 11 bankruptcy protection came after Lehman Brothers foreclosed on an outstanding long, according to Moonlight Basin officials.
"This was a necessary decision brought on by Lehman Brothers' actions, including its recent effort to foreclose on Moonlight Basin Resort and the uncertain future of the resort resulting from Lehman Brothers' actions," COO Russ McElyea said in the press release. "We decided that it is in the best interest of the Moonlight Basin family, including our creditors, employees, customers, suppliers, home owners, and the Montana communities in which Moonlight Basin operates to reorganize under Chapter 11."
Court documents say the resort put its lodge, spa, Jack Nicklaus golf course and several entities up as collateral just over two years ago for the $100 million loan.
Below is the text of the statement issued by Moonlight Basin.
Judge Rules on "First Day Motions" in Moonlight Basin Chapter 11 Hearing
Ennis, Montana – November 24, 2009 – Our hearing to address the First Day Motions (related to Moonlight's recent Chapter 11 filing) adjourned a few hours ago in Butte, Montana. The ruling was positive for Moonlight Basin on several fronts.
The judge ruled that interim financing will be provided by existing cash collateral with payroll as a first priority, as well as other essential course of business expenses until the next hearing, set for December 7, 2009. On December 7th additional financing proposals will be brought to the judge and we anticipate further decisions will be made on or around the hearing date.
It was agreed by all parties involved (Moonlight, Lehman and the Judge) that continued operation of the resort and an on-time opening of December 11 for season pass holders and December 12 for the rest of the public is of the utmost importance and priority.
Moonlight Basin is poised to open for the ski season with the addition of approximately 230 seasonal employees joining the team to provide the Montana Hospitality for which Moonlight is known. Guests of Moonlight Basin can look forward to a great winter season of skiing and riding. The terrain park has been expanded and there are several on-mountain events to enjoy, including the 5th Annual Headwaters Spring Runoff, Huck-a-Berry Rail Jam and Volcom Peanut Butter Rail Jam. This year is also the first year the resort will host the Special Olympics Big Sky Area Winter Games.
Lee Poole commented on the hearing by saying, "I am very pleased with the outcome of the hearing today. We will continue to shed light on the matters at hand, but meanwhile, our guests can rest assured that all parties involved are in agreement that the continued operation of Moonlight Basin is important. I am very much looking forward to seeing our guests, homeowners and golf members on the mountain this season."
