Mountain Creek files for bankruptcy

BY ERIKA NORTON
VERNON — The owner of Mountain Creek, the year-round outdoor-sports resort in Vernon, has filed for bankruptcy, seeking Chapter 11 protection. If granted the petition, the company plans to restructure its debt and attract new outside investment.
“Today’s filing will allow us to deal with the legacy debt we inherited from the property’s former owners and attract new investment into the resort,” said Mountain Creek CEO Jeff Koffman in a statement on Monday. “We remain committed to seeing Mountain Creek develop to its full potential with new hotels, new outdoor attractions and expanded residential homes. Our vision to create a world class, four-season resort here in New Jersey is still our main objective and this move will put us in the best position to achieve that.”
According to the court filings, Mountain Creek owes over $26 million in contractually obligated payments to the Vernon Township Municipal Utilities Authority. They also owe $885,000 in payments to Crystal Creek Associates, a financing firm associated with the Crystal Springs Resort in Hamburg, among other creditors.
Since 2010, more than $30 million was invested in Mountain Creek, according to a statement released by then-Mountain Creek Resort President Bill Benneyan. And when the Koffman family bought the resort just two years ago in June 2015, new owner Jeffrey Koffman said he envisioned investing about $50 million of capital into the resort over the next five years, part of which can be seen in the expanded Mountain Bike Park.
The ski area celebrated it’s 50th anniversary in 2015 as well.
Vernon Township’s sewer system is currently facing a cumulative debt of over $35 million. It is unclear how the restructuring of Mountain Creek’s debt will affect the township, or whether the debt owed by Mountain Creek will fall on Vernon sewer ratepayers.
“Mountain Creek is claiming as I’ve read that they want to be part of the community, they want to help the community, and to walk away from that debt, it would have to be spread out,” Vernon Mayor Harry Shortway said Wednesday.
Shortway also said the township will be hiring additional bankruptcy counsel to protect the township’s interests during the proceedings.
Will remain openAccording to the press release, the resort will continue to operate fully during the bankruptcy process. And if approved in New Jersey Bankruptcy Court, the debtor-in-possession financing, along with the company’s cash from operations, is expected to provide enough to support its continuing business operations and allow all staff-member jobs to remain.
The Waterpark is set to be open the weekends of June 10 and June 17, with the park opening seven days a week starting June 22.
Along with the filing, Mountain Creek filed a number of “first-day” motions with the court to minimize the disruptions to any business operations and facilitate a smooth transition into Chapter 11. The motions request authorization to honor employee pay and benefits along with certain customer programs currently in place, such as seasonal pass holders, Triple Play cards and gift cards. Customer deposits for weddings and other events will also be honored.
Mountain Creek Resort, Inc. has retained Lowenstein Sandler as legal advisors, along with Getzler Heinrich LLC as financial advisor and Houlihan Lokey to assist with the valuation and restructuring of its balance sheet.