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Premier Resorts of Utah Provides Financial Statement:
Deer Valley Lodging had only $700K in Assets to Pay Back $12.5 million,
Question Remains: "Where Did the Money Go?"

By Andrew Kirk, Park Record, Park City, UtahMcClatchy-Tribune Regional News

Jun. 27, 2009--Premier Resorts International is still avoiding answering the question, "Where did the money go?"

Two weeks ago, the affiliate Premier Resorts of Utah submitted a Statement of Financial Affairs to the U.S. Bankruptcy Court in Salt Lake City listing its assets and liabilities.

Section 3C, titled, "Payments to Insiders," gave no such accounting. The following statement was given:

"Premier Resorts of Utah's revenues were swept into a centralized inter-company sweep account under the corporate umbrella of Premier Resorts of Utah's parent, Premier Resorts International, and expenses were paid from the same account."

Park City attorney Joe Tesch said on Wednesday that he and others have protested and requested the court require a full statement of accounting.

Attorney Joe Wrona said via email that the trustee appointed by the court has full power to pursue that accounting. This issue is expected to be resolved at the July 6 hearing.

Without holding Premier Resorts International accountable, it is unlikely that any of the creditors will see money.

State and federal agencies are first in line for unpaid taxes. The Statement of Financial Affairs names the government in a few different lists. The sum of every listing amounts to around $4 million. Assets listed by the company amount to about $726,500.

The company predicted its total debt to be almost $13 million. Nearly $10 million of that are "unsecured, nonpriority claims" which includes all of the condominium owners

and business vendors. The high-end of debt to condo owners is around $54,000. Deer Valley Resort is owed over $300,000, according to the Statement of Financial Affairs.

On June 1, Park City Transportation Services, Inc. announced a new partnership with All Resorts Express that they claim was required, in part, because of nonpayment from Deer Valley Lodging. The statement lists the company's debt to Park City Transportation as over $76,000.

About 300 of the priority claims are former employees requesting a cash out of accrued vacation pay (some claims exceed $6,000).

About another 300 are unreturned advanced deposits from travelers leaving other companies the burden of "staying the traveler" to protect the reputation of the community.

Attorney Danny Kelly with the firm Stoel Rives representing the trustee, said a forensic accountant is looking into how much money each of Premier Resorts International's affiliates put into the sweep account and how much they took out of it. If some of the affiliates took out more than they put in, presumably the trustee will try to recover some of those funds to pay Premier Resorts of Utah's creditors.

It could get complicated, he warned, because even though the parent company owned 100 percent of Premier Resorts of Utah, Premier Resorts International will not necessarily be responsible for all of the affiliate's debt.

Kelly also confirmed Wednesday that the court lifted the stay on almost all nightly rental contracts June 24.

As part of the rules for undergoing bankruptcy, condominium owners were required to seek the court's permission to cancel previously existing contracts with Premier Resorts of Utah.

That means for the past month condo owners haven't been able to officially sign with new companies and rent out their units for summer and the coming ski season.

On behalf of all the owners over 500 the trustee requested the lifting of that requirement and at a special hearing on Wednesday the court agreed. Exceptions are contract holders who owe Premier Resorts of Utah money.

This also means Premier Resorts has the court's permission to return door keys to the unit owners. People are being encouraged to collect those at the company's headquarters at 1375 Deer Valley Drive.

"We're working on other related items as well to help homeowners enter agreements with other companies and go back to life as normal," he said.

One of those "other items" is telephone accounts. Because they were held by Deer Valley Lodging, Qwest has refused to accept cancellations from unit owners. Kelly said Quest has agreed not to terminate service for unpaid bills until the matter is resolved and telephone lines and ownership of the numbers are returned to owners.

Premier Resorts of Utah's assets, mostly office equipment and fleet vehicles, have already been picked up by auctioneers and will be sold soon through public auction.

ASSETS

Office equipment, furnishings, supplies, machinery, fixtures:

$105,725

Accounts receivable: $240,070

Liquidated debts: $187,850

40 Fleet vehicles: $150,700

Computers: $23,250

Inventory: $16,050

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To see more of the Park Record, or to subscribe to the newspaper, go to http://www.parkrecord.com.

Copyright (c) 2009, Park Record, Park City, Utah

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