Town Times (Middlefield, CT)

June 15, 2007

Powder Ridge faces two legal challenges sought and unsought

Author: Sue Van Derzee Town Times

Section: Town Times
Page: 05

Article Text:

Powder Ridge faces two legal challenges sought and unsought

The first hearing with creditors in the Chapter 11 bankruptcy case of Whitewater Mountain Resorts (WWMR) was held on Monday, June 11, in U.S. Bankruptcy Court in New Haven.

According to Chapter 11 bankruptcy rules, the entity in bankruptcy, or WWMR, known locally as Powder Ridge Ski Area, owned and operated by Ken Leavitt, is in the process of filing a plan to reorganize that must include information on how the creditors of the corporation will be paid. On Monday, creditors got the first opportunity to meet each other and question Leavitt. According to Selectman David Lowry, who was present, but did not participate, "The hearing went as well as expected. We're holding steady as she goes."

The town is vitally interested in the outcome of this situation because Leavitt owes over $200,000 in back taxes. However, the fate of Powder Ridge has been a concern on various levels for some time, and with an April 14 foreclosure sale looming, townspeople voted on April 10 to authorize the expenditure of up to $2.85 million for the purchase of the approximately 278 acre property. The town partnered with Robert Switzgable, of Ski Sundown in New Hartford, in order to assemble a deal that would both save the property from residential development and keep the ski area open while satisfying the known debt of the corporation.

However, on April 6, to protect their financial interests, a group of three creditors sent WWMR into Chapter 7,or involuntary, bankruptcy, thereby canceling for now the foreclosure sale.

On May 9, just before the deadline, Leavitt applied for a Chapter 11 bankruptcy, which allows the debtor to attempt to reorganize their business in a way that satisfies all registered creditors. At this point that includes just over 100 creditors with total claims of just under $3 million. These numbers can change up till Sept.10, 2007, however, which is the deadline for creditors to file claims in the case.

Not opening the ski area last winter gave him time to think about his plans, Leavitt explained, and his plans have become ever more firmly rooted in the concept of a 12-month resort. Though he has had approved permits from the town for a water park for several years, his newest plan appears much broader, encompassing time-share options, indoor and outdoor water parks, a fine restaurant and single-night lodging facilities. "This is the direction for successful ski areas," Leavitt said.

Leavitt said he was satisfied with the initial hearing because it gave him time to explain these plans with his new development expert, Chris Walker of Resort Realty, by his side. According to Leavitt, Walker has been associated with the successful resort at Waters Edge.

Both creditors and Leavitt are currently involved in further fact-finding to prepare for their next meeting on June 25 at noon in the U.S. Bankruptcy Court in New Haven.

Camp Nerden filing

Meanwhile, Leavitt will also be in bankruptcy court on June 20, having filed a 'stay' against Camp Nerden, a camp serving children and young adults with developmental difficulties, located on its own parcel in the heart of the Powder Ridge property. At issue are easements, both written and verbal, but because the property is in bankruptcy, the bankruptcy court handles all matters concerning Powder Ridge.

Leavitt contended that, by calling the camp to account, he is protecting his assets and thus his creditors.

Attorney John Corona, representing Camp Nerden, noted that the stay was filed by Leavitt to prevent vehicles serving the camp from exiting across the front of the Nerden property and onto the Powder Ridge driveway after coming up the driveway easement on the north edge of Powder Ridge property. Corona said that the unoffiicial "loop" easement has been used for more than 15 years, which makes it into a 'perscriptive easement.' Corona welcomed the opportunity to straighten the situation out, though he doubted it would happen by June 20.'Actually, I'm a little surprised by Ken's action,' he said. 'I would have thought he had bigger fish to fry than coming after a camp that serves people with disabilities.'

Take Another Step Home