Good News: Park City Development Back On Track
This is an update to our previous post about Promontory's Private golf community in Park City, Utah.
PROMONTORY COMMUNITY BACK ON TRACK: Promontory and Lienholders Reach Agreement for Reorganization
PARK CITY, UTAH, Feb. 24, 2009 - On February 9, 2009, the Promontory operating entities, Promontory's secured lenders and the Promontory Unsecured Creditors Committee (comprised of Promontory Members and Owners and other unsecured creditors) reached agreement on a joint plan of reorganization for Promontory. This plan sets the stage for the resolution of the involuntary Chapter 11 bankruptcy proceedings brought against Promontory by a group of its second lien lenders last March.
Credit Suisse To Form New Promontory Entity
The plan provides for the first lien lender group headed by Credit Suisse to form a new entity that will take ownership of Promontory's operating companies, subject to Credit Suisse's arrangement of exit financing. This plan, if approved by the Bankruptcy Court, could allow Promontory to emerge from bankruptcy as soon as the end of March, 2009.
Promontory Plan Includes Funding To Continue Development of Amenities
The proposed plan of reorganization protects the interests of Promontory's residents, owners and Club Members.
It also provides funding to continue development and amenity construction, thereby maintaining Promontory's original vision as a four-season, multi-generational luxury community. Promontory Club's membership agreements, and Promontory's obligations under lot purchase agreements and related development agreements, will be assumed by the new owners.
Promontory Will Retain Key Employees?
Further, most key operational employees will be retained as Promontory continues its high standard of member services while restoring its development and sales operations. Finally, the plan establishes a reserve for payment of unsecured creditor claims.
Promontory Debt Decreased
According to Rich Sonntag, Promontory's Managing Director, the reorganization will leave Promontory with decreased debt levels, thereby improving its financial position during the current market downturn, while preparing the development for profitability and market leadership when the greater real estate market recovers.
Sonntag commented, "I'm very pleased with the agreed reorganization plan. Promontory will be emerging from bankruptcy committed to its core vision and under a financial plan that protects its owners and members and positions us to continue amenity development and recapture market share."
Promontory will be the first luxury planned community to emerge from bankruptcy out of a number of projects that were forced into Chapter 11 as a result of the market downturn in 2007-08. According to Sonntag, "Promontory can now showcase its completed amenities and fully developed lots at a time when other projects are either hamstrung by financial challenges or merely at the beginning stages of their development."
Promontory Golf Course
Promontory's new Jack Nicklaus Signature Golf Course was recently named #3 of the best new private courses in the country for 2008 by Golf Digest magazine.
Promontory Bankruptcy Website
Promontory is a 7,200 acre, 10-square-mile recreational second home and private mountain community in the heart of the Utah Rocky Mountains just outside of Park City, Utah. Promontory's unique mountain ranch setting offers diverse year-round recreational amenities and activities for the multi-generational family.