Wintergreen Resort in Nelson County is facing a series of financial issues that threaten the resort's future. The resort says an unusually warm winter has led to lower than expected revenues this ski season.
It recently defaulted on a credit agreement with Bank of America, after expected revenues fell by $2 million in December.
The resort is revising its business plan, and seeking help from its 1,700 members to fill the budget gaps and prevent potential bankruptcy.
Official Statement of Wintergreen Partners, Inc.
On Saturday, February 4, 2012, representatives from the Board of Directors and management of Wintergreen Partners, Inc. ("Wintergreen") met with approximately 500 of the equity owners of the resort. Invitations were sent to all approximately 1,700 owners with the purpose of informing them of certain financial challenges which have developed over the past three months.
Key points of discussion were:
- As the result of exceptionally warm weather in December and January, WPI expects to report a $2.5 million operating profit shortfall relative to budget at January month-end; forecasts for February suggest continuing warm temperatures, which may, in turn, create as much as $1.5 million or more in additional revenue shortfall prior to the end of ski season.
- As a result of financial covenant violations arising from reduced December revenue and income, Bank of America terminated WPI's $3 million line of credit on Thursday, February 2, and WPI is now without a short-term borrowing facility.
- WPI continues to navigate the conservation easement tax credit situation with their legal advisors, and discussions with the Department of Taxation are ongoing.
- In order to address these challenges, the Board of Directors has approved the following initiatives:
- An early launch of the 2013 Member dues billing.
- A new $6 million private debt offering, similar to the successful $7.5 million offering in 2009, to be presented on or about March 1 to qualified investors.
- A management plan to reduce the Resort's operating costs by $1.5 million per year, beginning July 1, 2012.
