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The Majority Owners of Tamarack Resort File for Bankruptcy,
 Credit Suisse Bank Owed $262 million

By Ken Dey, The Idaho Statesman, BoiseMcClatchy-Tribune Regional News

Feb. 21, 2008 - Tamarack Resort won't fail, even though the two investors who own 75 percent of the resort filed bankruptcy last week.

Experts say the Chapter 11 filings by Tamarack CEO Jean-Pierre Boespflug and resort co-founder Alfredo Miguel Afif could keep creditors from taking over and let the two men finish the expensive creation of the resort.

Tamarack is already too well known and established to be closed, said Michael Berry, president of the National Ski Areas Association. Even if Boespflug and Afif fail, plenty of investors would be interested in picking up where they left off.

"We need to keep in mind that the resort isn't going to go away," said Berry. "There'll be new financing and possibly new partners, and a decade down the road, it will be a minor footnote in Tamarack's history. ... There is still money out there looking for an opportunity."

Berry said the troubles Tamarack's investors are facing are the same issues many ski resorts faced during the economic downturn of the 1970s.

New resorts require large capital investments before any significant revenue is generated. In fact, Tamarack is the only new ski resort built in the past 20 years.

When the economy sours, such projects become vulnerable.

"One could argue that if there hadn't been a credit crunch, this wouldn't have been an issue," he said.

Berry points to the Big Sky Resort, the exclusive ski resort in the mountains of southwest Montana envisioned by NBC News broadcaster Chet Huntley.

Huntley started developing the resort in the early 1970s and died four months after the resort's December 1973 opening. Three years later, the resort was in financial trouble and was purchased by Boyne USA Resorts.

"New ownership bought it, and the place hasn't looked back since," Berry said.

Boespflug says if the recent bank scandal in France hadn't happened, things would still be moving forward.

Boespflug said he and Afif filed for Chapter 11 bankruptcy protection under the names of their two companies Feb. 15 to avoid foreclosure by Credit Suisse bank, which is owed $262 million.

The online news site broke the news late Tuesday about the bankruptcy filing.

Boespflug's company, Cross Atlantic Real Estate, owns nearly 50 percent of the resort and VPG Investments owns 27 percent.

Boespflug said Tuesday that Tamarack was unable to meet the debt payments due on a loan from Credit Suisse, so he had to file bankruptcy or risk foreclosure by the bank.

Both Boespflug and Afif pledged their stake in the resort as collateral for the loan, so Credit Suisse could have ended up owning Tamarack.

The payment to Credit Suisse was to have been covered by a new $118 million loan from the French bank Societe Generale, but in late January that bank withdrew its commitment after it suffered $7 billion in unauthorized trading losses.

Boise attorney T. J. Angstman, who is representing Boespflug's company, said Boespflug and Afif had no choice but to file for protection or risk losing ownership of the resort.

"They could not stand by and let the banking situation derail the company," he said. "Because of the pledge agreement they had with Credit Suisse, it would have essentially allowed someone else to take over the company."

Angstman said filing a Chapter 11 bankruptcy shields businesses from creditors as they reorganize. For Boespflug and Afif, it gives them time to find more financing.

Boespflug says he has spoken with banks that are interested in providing the financing.

But finalizing a loan may not be easy.

John Mitchell, a regional economist with U.S. Bank, said banks are becoming less likely to invest in anything that has a risk.

"There is clearly a lot of uncertainty in the credit markets and banks are doing a lot of soul searching and looking hard at deals," Mitchell said.

But Angstman believes lenders will see the value of Tamarack.

"It's a valuable company," he said.

"Its last eight releases of real estate have sold out, its village is 90 percent sold out and I don't think the prospects (for financing) will be that difficult with that kind of track record."

Nowhere is the fate of Tamarack more important than in Valley County, where Tamarack has become the county's largest employer and added millions to the local economy.

Ron Lundquist, general manager of the Ashley Inn in Cascade, said he believes many of the financing problems were beyond Tamarack's control.

"I believe and I think my peers in the community believe the company is getting its arms around it and moving ahead," he said.

"Jean-Pierre has always done what he said he would in the past, and I believe the same is going to hold true here."

Ken Dey: 672-6757


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