Update on Jay Peak and Q Burke One Week After SEC Raid and Takeover
SEC appointed management is attempting to keep the troubled resorts open despite a multi-million dollar shortfall.
Saturday, April 23, 2016, NewEnglandSkiIndustry.com
The dust has yet to settle one week after the Federal Securities and Exchange Commission raid and takeover of Jay Peak and Q Burke. While both the SEC and the State of Vermont have filed lawsuits against Ariel Quiros and Bill Stenger, no criminal charges have been filed at this time.
Following the raid on Wednesday, April 13, the SEC placed the ski areas in receivership, appointing Leisure Hotels and Resorts of Kansas City to run the ski areas and associated lodging facilities. While Q Burke's season ended weeks ago, Jay Peak continues to operate.
Owner Ariel Quiros's personal assets have been frozen by the SEC. Quiros has been appealing to have the order lifted.
At Jay Peak, CEO and General Manager Bill Stenger was relieved of his duties by the SEC, but is reportedly in daily contact with management. Stenger claims he will be cleared of wrongdoing. Marketing Director Steven Wright has been promoted to General Manager. Stenger's sons remain employed at Jay Peak.
At Q Burke, receiver Michael Goldberg successfully added the Q Burke Hotel to the receivership, potentially paving the way to the opening of the idle facility. As of last week, Quiros's son remains employed at Q Burke.
At a hearing on Friday, a judge allowed $750,000 to be borrowed to operate Q Burke for the next three months. Ironically, the judge is allowing various Jay Peak and Q Burke accounts to be co-mingled to fund the borrowing, an action similar to what the SEC accused Quiros and Stenger of doing. According to a court document, Q Burke may have over $1 million in Accounts Payable.
Additional Funds Needed to Keep Resorts Open
According to Goldberg, between $7 million and $11.5 million will be needed to keep the resorts open this off season and prepare them for the 2016-17 season. Over $1 million will be needed for scheduled repairs to the Jay Peak Aerial Tramway.
Politicians in the Spotlot
Meanwhile, the political fallout continues. Senator Patrick Leahy and Governor Peter Shumlin have pledged to donate the tens of thousands in campaign contributions they received related to Jay Peak and Q Burke. However, requests to release e-mails related to the projects have not been fulfilled. Shumlin recently attempted to have a large number of staff e-mails deleted.
Previously reported on NewEnglandSkiIndustry.com News: