{"id":2452479,"date":"2019-12-21T00:00:00","date_gmt":"2019-12-21T07:00:00","guid":{"rendered":"https:\/\/www.aspentimes.com\/?p=318055"},"modified":"2019-12-21T00:00:00","modified_gmt":"2019-12-21T07:00:00","slug":"aspen-club-bankruptcy-case-proving-to-be-an-endurance-sport","status":"publish","type":"post","link":"https:\/\/alwaysmountaintime.com\/kspn\/local-news\/aspen-club-bankruptcy-case-proving-to-be-an-endurance-sport\/","title":{"rendered":"Aspen Club bankruptcy case proving to be an endurance sport"},"content":{"rendered":"
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A bankruptcy judge Friday approved nearly another $1 million in financing to keep The Aspen Club & Spa afloat through the end of February, while acknowledging the significance of a hearing scheduled next month.<\/p>\n

\u201cI\u2019ll see everybody in full body armor to do battle Jan. 14,\u201d U.S. Bankruptcy Judge Joseph G. Rosania Jr. said near the close of the hearing held in Denver.<\/p>\n

A number of hearing dates have loomed large on the Aspen Club\u2019s bankruptcy docket since it and an affiliate declared Chapter 11 in May, citing more than $100 million in debts associated with its stalled redevelopment project on the east side of Aspen.<\/p>\n

The judge noted that \u201cmany of the legal issues that are in the case have been fleshed out.\u201d<\/p>\n

The January hearing, however, is where loan-note holders GPIF Aspen Club (the successor to the $30 million loan FirstBank provided the club in May 2016) and Revere High Yield Fund (which lent $12 million to the club in June 2015) will argue why the Aspen Club\u2019s plan doesn\u2019t meet muster. The U.S. Trustee also has objected to the reorganization.<\/p>\n

\u201cI will tell all of the lawyers in the case, you have kept me very busy this year,\u201d Rosania told the parties, a number of whom attended by conference call. \u201cI appreciate that.\u201d<\/p>\n

That comment drew some chuckles as the judge wished the parties well during holiday break, but there\u2019s no doubting the financial implications in this legal battle.<\/p>\n

GPIF Aspen Club, which is affiliated with Dallas investor Jeff Goff\u2019s GP Invitation Funds, is associated with companies that own the Canyon Ranch luxury resorts in Tucson, Arizona, and Lenox, Massachusetts, and the Brown Palace hotel in Denver.<\/p>\n

It has objected to multiple Aspen Club bankruptcy moves since the filing was made, prompting Aspen Club attorneys to accuse it of attempting a hostile takeover of the operation.<\/p>\n

In addition to objecting to the club\u2019s proposed reorganization plan, GPIF also is contesting the club\u2019s effort seeking court approval for $140 million in exit financing.<\/p>\n

The Aspen Club\u2019s reorganization plan hinges on that loan from Florida-based EFO Financial Group, which will have lent the club $5.1 million so far with Rosania\u2019s approval of another $950,000 on Friday.<\/p>\n

In a Dec. 6 filing, GPIF Aspen Club said the club\u2019s reorganization plan \u2014 its most recent version was introduced Nov. 22 to the bankruptcy court \u2014 \u201cis so fatally flawed that confirmation is impossible.\u201d<\/p>\n

GPIF also argued that EPO Financial Group, through what\u2019s called \u201cpriming liens,\u201d would hurdle GPIF as a priority claimant. GPIF also questioned the terms of the loan, which would have a minimum interest rate of 12% per annum.<\/p>\n

\u201cFactoring in the exorbitant fees and costs, the actual rate of return for the Exit Financing is 21%,\u201d GPIF Aspen argued in the filing.<\/p>\n

Additionally, the Aspen Club\u2019s business model to pay the lender back is \u201cwholly dependent upon the Debtors completing construction of the Project on an extremely tight timeline and within budget, and simultaneously meeting very difficult unit sales (and presales) goals as specified in the Exit Financing, as well as meeting highly unrealistic and unproven revenue receipts from spa, fitness, and medical offerings,\u201d the motion said.<\/p>\n

Aspen Club has said it will take 22 months to complete the project, and that it would have $16 million in fractional-ownership sales proceeds before the new-and-improved club would reopen. At Friday\u2019s hearing, Aspen Club attorney James Markus said the most optimistic timeline for it to emerge from bankruptcy is by the end of February or March.<\/p>\n

GPIF motioned questioned the club\u2019s forecast in presales with the project incomplete.<\/p>\n

\u201cThese presales assume an average sales price per square foot of $4,040 for four-bedroom units and $3,453 for three-bedroom units which is highly speculative given the project\u2019s history and current market pricing,\u201d GPIF Aspen\u2019s motion argued.<\/p>\n

Aspen Club plans have called for a remodel of the 40,000-square-foot Aspen Club & Spa building, the construction of a 54,000-square-foot lodge with 20 timeshares, and 12 multi-family affordable-housing units.<\/p>\n

There are numerous other arguments GPIF Aspen makes, much of it focused on the uncertainty of the project\u2019s future, a high-interest loan and a risky business model.<\/p>\n

With the issue among mechanics lien holders on stay in Pitkin County District Court, the bankruptcy court is sorting through that mess of bills as well.<\/p>\n

The general contractor, PCL Construction Services Inc., has a secured claim of $23 million against the Aspen Club, which also faces $26.9 million worth of mechanics\u2019 liens with interest accruing at 12% per annum. Some of the amounts, however, are duplicated because of PCL\u2019s financial obligation to some of the mechanics\u2019 lien holders.<\/p>\n

The mechanics\u2019 lien holders range from the city\u2019s water department ($30,764) to Gould Construction ($1.7 million).<\/p>\n

rcarroll@aspentimes.com<\/a><\/p>\n

via:: The Aspen Times<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A bankruptcy judge Friday approved nearly another $1 million in financing to keep The Aspen Club & Spa afloat through the end of February, while acknowledging the significance of a hearing scheduled next month. \u201cI\u2019ll see everybody in full body armor to do battle Jan. 14,\u201d U.S. Bankruptcy Judge Joseph G. Rosania Jr. said near […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[49],"tags":[],"class_list":["post-2452479","post","type-post","status-publish","format-standard","category-local-news"],"acf":[],"publishpress_future_action":{"enabled":false,"date":"2026-08-19 01:08:11","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"KSPN The Valley's Quality Rock","distributor_original_site_url":"https:\/\/alwaysmountaintime.com\/kspn","push-errors":false,"_links":{"self":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/posts\/2452479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/comments?post=2452479"}],"version-history":[{"count":0,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/posts\/2452479\/revisions"}],"wp:attachment":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/media?parent=2452479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/categories?post=2452479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/tags?post=2452479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}