Jay Peak is expected to be in the hands of a new owner next summer while the sale of Burke Mountain is now indefinitely on hold, according to Michael Goldberg, the court-appointed receiver overseeing the two Northeast Kingdom ski resorts at the center of a massive EB-5 scandal, reports VTDigger. Burke Mountain’s sale is on hold, Goldberg said, as it continues to lose money and has failed to generate the required jobs needed for EB-5 immigrant investors to obtain the U.S. residency they hoped for when they each put $500,000 into building a hotel there.
In February this year, Goldberg planned to market the two ski resorts, Burke and Jay Peak, together as early as this May with the expectation of selling both by this ski season. But he has said little in recent months about the resorts, or why they had yet to hit the market. However, Goldberg late last week filed his latest report on the status of the resorts, essentially a state of the state on his receivership and accompanying efforts to recoup money for the more than 800 defrauded foreign investors.
According to separate lawsuits brought in April 2016 by state and federal regulators, former owner Ariel Quiros and his former business partner Bill Stenger, the former CEO of Jay Peak, misused $200 million of more than $350 million they raised from EB-5 investors. Both Quiros and Stenger have since reached settlements — neither denying nor admitting fault — with the U.S. Securities and Exchange Commission and state regulators in the cases. As part of Quiros’ $81 million settlement with the SEC reached last year, he agreed to turn over his interests in both Jay Peak and Burke Mountain. Stenger’s SEC settlement involved him paying a $75,000 penalty to the federal government.
Goldberg wrote in his latest filing that much of the property title work associated with putting Jay Peak up for sale is now complete. He added that he expects the sale of Jay Peak and its hotel complexes, condos and water park to be finished by sometime next year, after this season ski. But, before putting Burke and its 116-room hotel and conference center on the market, the receiver wrote he is “considering additional construction to increase job creation.”