Alpine madness

25 January 2010 By Agnes Crane

When Fortress and Lehman stood at the summit in 2006, ski resort operator Intrawest looked enticing. Now it’s a dead property deal being fought over by these wounded participants. The tussle has dragged in the Vancouver Olympics, though that’s probably just a sideshow.

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Creditors of Intrawest Holdings, which owns ski resorts WhistlerBlackcomb, Steamboat and Stratton, announced on Jan. 20 that they will auction off their stakes in the troubled company on Feb. 19. The auction will take place in the middle of the Winter Olympics, which has booked Whistler slopes for its skiing competition.

Fortress Investment Group became the first hedge fund and private equity firm to go public in 2007, riding on investor enthusiasm for alternative investments during the credit market boom. In February 2007, its stock traded at $35 a share. Today, it trades at $5.

Fortress bought the Canadian ski operator in 2006 in a $2.8 billion leveraged buyout that saddled Intrawest with $1.7 billion in debt. Fortress defaulted on the loan in December.

In 2006, approximately 41 percent of Intrawest's $936 million in revenue came from its real estate ventures and management services. In a filing, the company at the time said it had the capacity to develop 21,000 units.

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