After delaying order, judge OKs sale
By Joseph T. O’Connor Explorebigsky.com Senior Editor
BUTTE – It’s been 20 months since The Club at Spanish Peaks had an owner. A Butte bankruptcy judge recently decided that was long enough.
On June 10, U.S. Bankruptcy District Court Judge Ralph Kirscher made a final order approving the sale of the exclusive club’s assets to CrossHarbor Capital Partners, which bid $26.1 million at an auction held June 3 at the U.S. District Court in Butte.
Satterfield Spanish Peaks Acquisition, which won the stalking horse bid for the assets on April 26, was named backup bidder, and would have an opportunity to buy those assets in the event that CrossHarbor doesn’t close the sale.
Ross Richardson, trustee for the bankruptcy case, accepted CrossHarbor’s bid, subject to the terms of the Asset Purchase Agreement (APA), which were contested by lawyers for the only other bidders at the auction, Satterfield and Spanish Peaks Dynasty. Immediately following the auction, Kirscher delayed a final ruling to consider disagreements about the APA from the opposing bidders, but a week later he approved the sale.
“It’s fabulous,” said Eric Ossorio, a homeowner* in the 5,300-acre private ski and golf community and broker at Prudential/Ossorio Real Estate. “I don’t think anyone could have hoped for a better resolution … and we couldn’t ask for a more fair captain than Sam [Byrne].”
Byrne, co-founder of CrossHarbor and majority owner of the Yellowstone Club, has shied away from media attention over the past few months, but was all the while maneuvering his company into a strategic position during the course of the bankruptcy process. The Club at Spanish Peaks filed for Chapter 7 bankruptcy in October 2011.
At the auction, Byrne sat next to CrossHarbor principal Matt Kidd during the bidding process, stoic and unflinching in a battle of bid paddles. The day, which many expected to end after a short bidding process, lasted into the early evening.
It began at 9 a.m., when bidders, their lawyers and Spanish Peaks homeowners shuffled into the federal courthouse in Butte for the long-awaited auction. James Dolan, who co-founded The Club at Spanish Peaks in 2004, flew in from Pittsburg to represent S.P. Dynasty. Tommy Satterfield occupied the front row during the auction, representing SSPA. Byrne was in from Boston.
At 12:15 p.m., Richardson laid out the ground rules, noting that qualifying bidders had to submit a deposit in the form of a cashier’s check for $2,260,125, or 10 percent of the stalking horse bid. During the auction, no bids could be retracted, and those submitted had to be in $100,000 minimum increments.
The live auction began with Satterfield’s stalking horse bid of $22,050,000, and Kidd immediately raised his paddle, and the bid, to $22,601,250.
The battle alternated leaders between CrossHarbor and Satterfield. Meanwhile, Dynasty tried to combine its bids, offering just over half in cash, plus the balance in the form of a credit bid; the trustee refused Dynasty’s three attempts at this offer.
When the smoke cleared, CrossHarbor was the last bidder standing. Once Richardson said, “sold,” Byrne smiled at Kidd and shook hands with lawyers and Spanish Peaks homeowners in attendance, who congratulated him.
Dolan, who sat quietly with his two sons and team of lawyers in the second row after the auction, took the stand for S.P. Dynasty near the end of the confirmation hearing. He answered questions about a ground lease for a contentious parcel of property atop Andesite Mountain, on which sits the Pinnacle Restaurant.
Dolan has leased the property for $1,000 per year since Dec. 14, 2007. The lease, written out for a term of 99 years, has been an issue in the case because former secured lender CitiGroup sold its share to Spanish Peaks Acquisition Partners in 2011, and it’s unclear whether that sale would negate the deal Dolan had with CitiGroup.
CrossHarbor is not expected to close on The Club at Spanish Peaks until sometime in August, Ossorio said, adding that there’s still work to be completed.
Payments to creditors will remain in escrow until cases involving those creditors are finalized, according to Stephan Garden, financial advisor for the trustee Richardson. Litigation could last months, if not longer, he said.
But according to Dolan, the deal is done.
Stepping into the back seat of a black SUV after court adjourned around 6:30 p.m., Dolan nodded in CrossHarbor’s direction. “[Byrne] is the new king of the valley,” Dolan said. “I wish him luck.”
At press time, Byrne was unavailable for comment.
*Correction: Above, we referred to Eric Ossorio as being a homeowner at The Club at Spanish Peaks. Ossorio does not own property at the Club. He lives in the Northfork neighborhood in Big Sky.