While the fallout from Jay Peak’s EB-5 scandal continues to cover headlines, appointed receiver Michael Goldberg is far from giving up the fight to return the northern Vermont ski resort to its previous stature.
Related: Receiver Turns Down $93 Million Offer To Buy Jay Peak
According to the VTDIGGER.com, the receiver just made a huge step in the right direction after the resort reached an agreement to acquire funds from Citi Bank in a settlement totaling $13.3 million. While Citi Bank contends that the bank had done nothing wrong, the bank provided a line of credit to Ariel Quiros’ that amounted to nearly $15 million dollars.
“The SEC’s complaint alleges that the Corporate Defendants misused millions of dollars of investor funds intended for EB-5 development projects.” – Jay Peak Receivership
Ultimately, Quiros used those funds to support the alleged Ponzi-scheme activity that created the scandal in the first place. Quiros has since been unable to repay the previous loan and Citi Bank has placed the loan in default. The bank has been unable to pursue legal action against Quiros while the SEC continues its investigation into the allegations of EB-5 fraud.
Jay Peak To Finally Pays Its Contractors/Employees
A portion of the settlement funds will be used to pay contractors and employees who have yet to be compensated for their work on Jay Peak and Burke Mountain. The remaining funds will be designated towards maintenance needs at the resorts, which include a $5 million dollar upgrade of Jay Peak’s aerial tram. Still, the massive liquidity event for Jay Peak is good news, especially for those worrying that the upcoming ski season wouldn’t come around till 2017.
With the funds in tow, the resort has almost cemented its viability for the 2016-2017 ski season.
Still, the settlement requires all investors and affected parties to agree on the terms of the agreement. As of now, the receiver is giving all affected persons the ability to object to the settlement terms.
Find the entire VTDIGGER.com article here: JAY PEAK RECEIVER REACHES $13.3M SETTLEMENT WITH CITIBANK