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Bankrupt Again - Magic Mountain, VT

post #1 of 4
Thread Starter 
Magic Mountain goes on the block
July 19, 2002



Southern Vermont Bureau

LONDONDERRY — A perennially troubled ski resort will be put up for auction next month.

Magic Mountain in Londonderry is scheduled for public auction on Aug. 12 as part of court-ordered foreclosure proceedings in Windham County.

John C. Nelson, a New York City lawyer and the mortgagee holder, is owed about $1 million in interest and costs for the ski area, according to Robin Stern, a Brattleboro lawyer representing Nelson in the proceedings.

On the auction block are assets that include 708 acres of trails, lifts and real estate, the base lodge, two out buildings and the underground snowmaking pipe that was installed under the most recent ownership, according to Eric Nathan of the Eric Nathan Auction Company, Inc. The Manchester firm is handling the sale.

In a twist, the resort’s generators, snow cats and other operating equipment are not included in the sale. Nelson may later decide to sell the equipment as part of a package to any outside buyer, Nathan said.

“It’s really quite convoluted,” Nathan said. “This is a foreclosure auction of real estate only ... the very basic and certain net effect of this entire judicial foreclosure auction will be to clarify the previous levels of ownership and partnership and bring Magic under one current focused principal.

“It’s an attempt to clarify equity positions that have become unclear — that is what this is all about.”

Nelson will likely make his own bid at the auction, Nathan said.

Nelson has had a lien against the title through the resort’s current and previous owners. Nelson had a lien on the title when Glebe Mountain Ski Associates, Inc. owned the resort and retained that lien when the title was recently transferred to the current holder, Old Fashioned Skiing Company, LLC.

The current owners could not be located for comment.

Anyone else who has an interest in the property included in the mortgage is also being foreclosed on, Stern, Nelson’s lawyer, said. Whoever buys the resort at the auction, she said, will “get good title to the property through this foreclosure.”

Nathan, who has had access to Magic Mountain’s books, said the resort has done well in recent years despite on-again, off-again snow conditions.

“I think, relatively, it has been successful,” he said. “It has been very challenging for reasons way out of its control, like poor weather years. I was amazed at the gross revenue of ticket sales.

“If you’re as snowboarder or a skier who appreciates a challenge, it is the most challenging terrain in southern Vermont. In great snow it’s fantastic.”

Under Pennsylvania-based Glebe Mountain Ski Associates, Magic reopened in December 1996 after sitting dormant for five years. But one season later, the group was threatened with bankruptcy after hundreds of thousands of dollars in debt went unpaid. It was sometime later that the title was transferred to Old Fashioned.

David Dillon, the president of the Vermont Ski Areas Association, said Thursday that he knew little about the situation at Magic Mountain since it is the one ski resort in the state that doesn’t belong to his organization.

“We knew they changed management, or changed ownership about two years ago, so it became obvious they were having some trouble,” he said.

The resort used to be a member of the association, but sometime ago had trouble paying its dues, he said.

Without knowing the amount of debt the owner is carrying, or the number of skier visits during past winters, Dillon said, it would be hard to determine whether the resort could be a viable one in the future.

It’s a tough business.

“It’s very difficult to make a living in the ski business, even for the folks who have been doing it for a long time,” Dillon said. “It’s a great business, we have members who have been a long time at it and it’s great for the state, but it’s a tough business.”

Dillon said none of his association’s members seem poised to jump on the opportunity to buy another ski mountain.

“I would think it’s going to be somebody new,” he said. “It’s a nice mountain for an independent.”

The auction is slated for Aug. 12 and an inspection will take place on Aug. 5 or by appointment.

Contact Abigail Nitka at abigail.nitka@rutlandherald.com.
post #2 of 4
" If I had a million dollars, if I had a million dollars...."

Time to start shopping for real estate at the base again...
post #3 of 4
Bummer, I liked skiing there because of the challenging terrain, rarely crowded and Magic was finally getting the puckerbrush off most of the trails. Maybe someone with enough capital will buy the palce. My favorite rumor was Stratton would buy Magic to attract expert skier to that resort.

Everything changes.
post #4 of 4
Thread Starter 
Originally posted by Talisman:
My favorite rumor was Stratton would buy Magic to attract expert skier to that resort.
Wouldn't that be funny... Intrawest taking over The People's Mountain. Maybe they could make this a reality again (Magic circa 1986):

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