Employees at Intrawest, the troubled ski resort operator owned by Fortress Investment Group, are gathering for an all-employee meeting today, according to a tipster familiar with the matter. The gathering could be a prelude to a bankruptcy announcement by Intrawest.
This morning, the New York Post reported that the Fortress Investment Group, the once high-flying and troubled alternative-investment firm that had to halt its quarterly dividend last month to conserve cash, may be be forced to arrange a bankruptcy for Intrawest. The immediate cause of the potential bankruptcy: some lenders are refusing to refinance the $1.7 billion of debt Fortress used to buy the Intrawest just two years ago.
Word of an all employee meeting seems to indicate that the company is preparing for a bankruptcy. Of course, it is still possible that a last minute deal with lenders could rescue the Intrawest.
A bankruptcy would be a major blow to Fortress. Intrawest represents 10 per cent of Fortress’ $17 billion private-equity portfolio. Part of the problem seems to be that now bankrupt Lehman Brothers was one of the lenders in the Intrawest deal.
From the Post:
Sources told The Post that while a majority of the lenders behind the $1.7 billion in debt that Fortress used to acquire Vancouver, British Columbia-based Intrawest support a restructuring of the debt, a handful are resisting amid the protracted credit crisis. In order to move forward with a restructuring, all lenders have to agree to the plan, sources said.
Without it, Fortress might have to turn to a prepackaged bankruptcy for Intrawest, which owns the Whistler ski resort in British Columbia. The company has been whacked by cash-strapped consumers cutting back on ski vacations.
Lehman Brothers was among the syndicate of lenders that provided the Intrawest loan.