Debt looms for Fortress

Economic turmoil hits owner of Intrawest, which owes $1.68B


— Nine months after outgoing Intrawest chief Alex Wasilov said Fortress Investment Group was prepared to infuse Steamboat Ski Area's parent company with large amounts of capital, Intrawest faces an Oct. 23 repayment deadline on $1.68 billion in loans.

Fortress, a publicly traded private equity firm and hedge fund, paid $2.8 billion for Vancouver, B.C.-based Intrawest in late 2006. In addition to Steamboat and Whistler Blackcomb, Intrawest has interests in resorts including Copper Mountain and Winter Park.

Fortress is in a struggle to protect its $1.37 billion equity stake in Intrawest, according to a report published in London's Financial Times on Thursday. The article reports Fortress has approached existing lenders and potential new lenders in an effort to refinance $1.4 billion in senior debt. Intrawest's debt already is trading at 70 cents on the dollar.

The efforts by Fortress to refinance the debt come duringwidespread reports that large financial institutions are holding capital tightly.

Wasilov, who remained on Intrawest's board after he stepped down from the position of CEO, spoke to 200 airline executives gathered in Steamboat Springs in January. He told his audience at Steamboat Ski and Resort Corp.'s airline summit that the purchase of Intrawest by Fortress signaled a new growth phase for the company.

"We're just pleased that we have (Fortress) on board, because they have a hell of a lot of capital, and they're putting it behind us, and it's going to be our fuel to continue to grow and prosper," Wasilov said at the time.

Ian Galbraith, Intrawest's director of corporate communications and media relations, said his company's executives were not in a position to comment about Thursday's report, and he deferred questions to Fortress.

"It's a matter that involves Fortress," Galbraith said. "Our executives work closely with Fortress executives on a daily basis."

Lilly Donohue, director of investor relations for Fortress, also declined to speak on the record Friday. Ongoing discussions with lenders made it essential that she withhold comment, she said.

Financial Times writer Henny Sender cited a Fortress letter to investors that indicated discussions with lenders have been "constructive."

The New York investment research firm Keefe, Bruyette and Woods recommended in late September that Fortress Investment Group shares be downgraded from expectations that it would out-perform the market to "market perform." reported Sept. 26 that Fortress had filed with the SEC its intent to sell as much as $1 billion in shares to possibly refinance indebtedness, as well as to access working capital and for general corporate purposes.

The report in the Financial Times said Fortress already had injected $100 million of capital in Intrawest to prop up its equity in the company.

Wasilov came to Intrawest to restructure the resort operator from a public company to one that is privately held. While in Steamboat in January, Wasilov said restructuring freed up $100 million of the capital needed for Fortress to back the March 2007 purchase of Steamboat Ski Area for $265 million.

Wasilov was succeeded as Intrawest's CEO by former Vail COO Bill Jensen in June.


JLM 8 years, 6 months ago

No, we've gone from a medium size owner with SMALL debt issues and no available cash to a large owner with BIG debt issues, no available cash and the worst credit market in 100 years coupled with an industry which is totally dependent upon discretionary consumer spending by America's most wealthy folks facing huge personal financial changes and prospectively a new President who intendes to "redistribute" their wealth.

Why does SBS think we are immune to reality?

Bad times are not coming --- they are here. Vote for Barack Obama if you want them to get still worse.

Get a grip on reality, cause reality's got a grip on us all.


Anthony Cyrnak 8 years, 6 months ago

JLM--Why not state your views on Intrawest and Fortress without resorting to a cheap political statement? But, since you did, allow me to say that if you're happy with the same miserable and costly policies that have run our country into the ground over the past eight years then you should vote for John McCain and not Barack Obama. Among other things, McCain will make sure that the little guys in towns like SB continue to get the economic scraps that "trickle down" from the wealthiest five percent or so of Americans. You might consider that with a more even income and wealth distribution, more (not fewer) people could afford a ski or summer vacation in SB. Wouldn't that be nice?


JLM 8 years, 6 months ago

Unfortunately we are no longer disconnected to the larger implications of finance, tax policy, the economy, markets and politics. The simple truth of the matter is that the fate of the mountain is held hostage to a huge requirement for refinancing which is not controlled locally. That's a problem with being "world class" --- the world is probably going to control your fate.

I apologize if you think my political statement is "cheap" as I certainly did not mean it that way. I have no personal animosity toward BO but I do disagree with his stated policies --- his politics. Your umbrage feels a bit like the seemingly mythical racial implications of disagreeing with The One on anything. I disagree with him intellectually but unfortunately it is not likely to be a "cheap" disagreement, it is likely to be very, very expensive.

I think you pay a great disservice to the SBS "little people" many of whom I consider to be equally world class in their professions, trades, vocations and avocations. In many ways, choosing to live in SBS is a choice to be compensated in a different currency --- a quality of life type currency. I think that SBS is filled with folks who have had the raw courage to pursue a life which is more joyuous because it is not denominated solely in dollars.

While I do subscribe to the adage that "money can't buy you love", my pragmatic side finds that it sure can pay the rent while waiting for love to appear.

Nonetheless, the harsh reality is that the concept of "wealth redistribution", a decidedly socialist concept has not served any nations well. Look to East Germany before the end of the Cod War --- the same folks as West Germany but a hugely different outcome. The main difference was the political system which was based on socialism.

It is very difficult to understand how the creation of widespread opportunity --- after all aren't Barack and Michelle Obama the beneficiaries of a purposeful and affirmative opportunity crafted specifically to allow them to avail themselves of the American Dream --- does not trump a culture of dependency and wealth redistribution.

We should be trying to make more millionaires in America --- because frankly it's all about hard work, a bit of luck and timing. I have never met a millionaire smarter than a good framing carpenter.

Let's make more millionaires rather than penalizing success.


Don Little 8 years, 6 months ago

Article in The Financial Times says Intrawest bankruptcy is "Unlikely" but that negotiations of this type are tricky because it takes only one of the stakeholders to object and through the company into bankruptcy.


Anthony Cyrnak 8 years, 6 months ago

JLM--You make some good points.

My use of the word "cheap", however, was slang meant to convey my sense that your comment regarding "BO" (a clever if unfortunate moniker--I like it) was an easy and opportunistic jab at the Democratic candidate--and, surely off-point for a discussion of issues relating to the ski area (how does one segue from a discussion of ski area financing to blasting one of the presidential candidates?).

Additionally, my reference to "little people" has nothing to do with folks in SB per se. I lived there once, and I feel as you do--terrific place; terrific people; wonderful lifestyle (whether you're wealthy or not). "My bad" if anyone incorrectly felt slighted.

Regarding inequality--why is it a big deal? It's a big deal, because nothing erodes democracy and freedom more surely than economic inequality. Governments "of the rich" are as deceitful and degrading to the human spirit and condition as any communist or other totalitarian form of rule.

I agree with you that opportunity trumps dependency. However, we can hardly turn our backs on the many citizens in our country that effectively have little or NO real opportunity to improve their economic well-being within a reasonable time (you can forget "trickle down" economics). Occasionally, it may be necessary to assist people even if doing so creates a greater risk of socialism. This may simply be a price for long-term democracy in a modern global economy.

Ironically, the biggest recipients of government assistance have been the "red" states which loudly repudiate big government but which are all too ready to accept government funds when the occasion arises. They sing the same old refrain--"We hate big government." Sure they hate it--until THEY need a bailout or handout of some kind or other (be it crop price maintenance, natural disaster assistance, corporate welfare, tariff protection, preservation of redundant military bases, etc.--the list is endless). Then, who do they look to FIRST? You know who.

I agree that we SHOULD be trying to make more millionaires in America. But along the way, let's not further bury those who need a hand up. Clearly, big government is not always the best answer; but, sometimes (particularly in the short run) it is the only answer. The upcoming presidential election might be one of those times.

Neither BO nor JM can solve all of our problems, but I am putting my money (so to speak) on Barack Obama. I will do this not because BO is in any sense "The One" but rather because he promises a change from the awful policies and practices of the recent past. A friend of mine once said, "The only thing Republicans care about is their money." Of course, this may not be completely true.

Paying higher taxes (if it comes to that) is a small price to pay for a better country; and, in the end it may help ALL of us to pay the rent while we wait for love to appear.

Respectfully, AC


JLM 8 years, 6 months ago

Oh, tele, please ---the entire Clinton "miracle" was created by the low hanging fruit left by GHWB (RWR's 3rd term, no?) and the Republican Congress. You do remember that Newton Gingrich closed down the government which provided the opportunity for love to blossom in the White House between Bill Clinton and the lovely Monica, no?

RWR's tax cuts created the increases in government tax receipts and the Republican Congress prevented WJC from spending them.

Huh? You didn't know that BO went to Columbia and Harvard because he was black and was a beneficiary of affirmative action? Did you not know that Michelle went to Princeton and Harvard on affirmative action?

BO has never, ever released his Columbia or Harvard transcripts --- what evidence do you have that he graduated at the top of his class? BO is a naif fakir and poseur. But I could be wrong, no? How about those transcripts?

Wealth redistribution is a "socialist" tenet. Surely you know that when Germany was reunited, socialist E Germany was and remained an economic disaster while capitalist W Germany flourished?

Please name your favfavfavfav-orite successful socialist country? Huh?

America was created by capitalist principles. Modern America was created by the WWII generation which came home from war, went to school on the GI Bill, created Levittown and worked their butts off. Nobody gave them anything.

Socialism creates dependent losers and slackers. Capitalism creates self sufficient strivers.


JLM 8 years, 6 months ago

No, tele, it was EARNED! In addition, they earned your and my freedoms. It was EARNED and you betray either an inbred ignorance or an incredible sense of entitlement not to recognize and honor that fact.

At both Columbia and Harvard, BO held named scholarships which were awarded only to "deserving minorities" --- not implying I had any problem with the affirmative action implications of those awards but they were most assuredly based on race.

I have never seen any evidence of BO's acadamic achievement at Occidental, Columbia or Harvard. As you know he has not been forthcoming as to his academic achievement or record --- as he has not been forthcoming as to where he lived while at Columbia or while working in NYC.

The BO campaign has made much fun of McCain's standing at Annapolis where academic records are public documents but I have never heard of them providing any documentation on BO's performance. Biden on the other hand graduated in the bottom octet of both undergrad and law school.

I cannot substantiate that BO graduated "magna cum laude" but I would sure be willing to see that proven. I have no doubt that BO is a smart as a whip and as clever as a fox --- he's just a naif, a fakir and a poseur, in addition.

East Germany did not "fail" it was occupied by a victorious Russia which punished it. I have traveled extensively in E Germany in the mid to late 1970s when such travel was virtually impossible. The Russians placed the East Germans under the yoke of communism and applied socialist economic policies. The end result speaks for itself.

I not only understand capitalism very well, I have been an active discipile, participant, proponent and have produced lots of millionaires who have worked for me through the years. They all have one common set of traits --- they are hungry, motivated, they came to work early, they stayed late, they worked their butts off and they asked only to keep what they had killed themselves. They never dipped into another man's chili bowl to feed themselves or their families. They were and are damn good men and women --- Americans! I was only lucky enough to assist them to harness their own extraordinary talents and work ethic.

I love the "culture" of France but I love the "economy" of the United States more. I don't know what you mean by a "successful" culture but I damn sure know what a successful economy looks like. Socialism is a failed theory, a failed experiment and at the core of BO's philosophy --- it will have the same result.


oldskoolstmbt 8 years, 6 months ago have beat the dead horse..we all know your 'thoughts' on OB!!!

~~If everyone is moving forward together, then success takes care of itself~~Henry Ford

Let's move forward with OBAMA!!


Steve Lewis 8 years, 6 months ago

According to the Pilot, the refinancing went through:

That was a good read above.


JLM 8 years, 6 months ago

Socialism is at its core an economic theory which advocates the organization of a society in a manner which supports the widespread re-distribution of wealth from those who actually produce the wealth to all citizens (specifically including those who had no role in creating the wealth) in a manner which is self-described as "even" or "fair." Karl Marx considered socialism as a necessary way station between capitalism and Communism.

Capitalism requires the concentration of capital in the hands of those who can actually use capital (debt, equity) to create more wealth or return on that capital --- including "jobs" (a nasty either 3 or 4 letter word depending upon your view LOL).

A seasoned capitalist has no problem with a "progressive" tax which equitably increases the tax burden on those who make the most current income --- not capital gains --- in a civilized society.

BO is not talking about a progressive tax rate which meanders a bit too high and thereby hampers the creation of jobs or wealth --- no, BO is talking about using tax policy as a bludgeon to redistribute wealth from the productive parts of our society to folks who pay no taxes while pretending it is a "tax credit" when, in fact, this is simply a welfare program.

One who does not pay any taxes, cannot get a "tax cut." It is an appropriated payment funded by a tax increase. In this manner, this re-distribution of wealth is simply a classic socialist mechanism to achieve an arbitrary "social" goal while posing as a tax issue. It is socialism at its most elemental litmus test level.

This is a symptom of what is wrong with BO's politics, tax policy and governing philosophy.

A glimpse into BO's mind, scares one to think that this is only the tip of the iceberg and that there is a Titantic sinking body of socialism in that chap.


Anthony Cyrnak 8 years, 6 months ago

JLM--It sounds as though you had a very successful and financially rewarding career, possibly in a business that you started yourself. Moreover, it seems that you opened the door to success for some of your employees as well. You are to be commended.

Please realize, however, that along the way to your success you undoubtedly received substantial help--either direct or indirect--from various government entities, all of which were supported by tax dollars collected from the rest of us (and, to some extent of course, your own taxes paid).

This tax-financed government assistance probably took many forms. For example, did you ever receive some kind of "tax break" along the way? (It was a "break" for you but not the rest of us who had to pay whatever you avoided paying.) Were you able to conduct business in an orderly marketplace governed by rules and laws? (enforced by a tax-financed judicial system) Did you receive police protection and fire protection for your physical plant? (paid for by tax revenues) For that matter, was your country protected from invasion by foreigners during the time your business developed? (national defense is financed by dollars) Countless other examples of tax-funded assistance exist in the business world.

The point is that no person or business in the U.S. is entirely free from government--either on the paying end or the receiving end. To say that you and your more successful employees never "dipped into another man's chili bowl," therefore, is not entirely true. I bet you and your tax lawyers were good at taking advantage of every tax-saving legal loophole you could find. (I don't blame you, BTW) In doing so, however, you merely passed your tax burden on to someone else's shoulders (other Americans; damn good men and women!) and never looked back.

America's businesses in general "dip" plenty. Just look at all of the corporate welfare that is doled out each year by various schemes (promoted by both Republicans and Dems). Who do you suppose pays for these goodies? The rest of us, that's who.

To think that American entrepreneurs are achieving greatness all on their own dime is a myth. Trust me, you were in bed with the government the whole time you were in business, whether you knew it or not. We all are to some extent.

Obviously, there needs to be an acceptable balance between personal freedom and government interference in our lives. And, this balance is different for each person.

Pure capitalism, if it ever existed, is gone forever. You might as well admit it and quit kidding yourself and feeling frustrated. Here's an idea: Why not come over to our side and put your business talents to good use by helping to make government work better?

Respectfully, AC (former federal government regulator)


JustSomeJoe 8 years, 6 months ago

AC and tele - good luck with JLM. He sticks to his talking points and his reality regardless of situation. He equates the current GOP and John McCain with conservatism, which couldn't be further than the truth. (not just this thread, but many threads) I suggest you don't waste your time trying to prick his bubble of reality, it's made of tough material.


JLM 8 years, 6 months ago


I have inartfully expressed my views if you perceive an argument with "government" rather than thoughts on a candidate's fundamental governing philosophy.

I made a great trade with our government --- 6 years of military service and a bit of danger in return for a great technical education and an Ivy League grad school on the GI Bill. Best deal I ever made. More importantly, I was the better man for it and I thoroughly enjoyed every minute of it.

I am a Federalist and greatly support all functions of government providing that which we individually or the States cannot provide for us. I gladly pay fair taxes though I am like everyone else and wish they were a bit lower.

I have been involved in a number of highly regulated businesses and frankly believe that the regulatory "burden" and barriers to entry have contributed to my success, as they often do for any fundamentally honest business person. I neither fear nor curse the SEC, PCAOB, IRS, auditors, bank inspectors, Dept of Labor or any regulators with whom I have worked.

I abhor businessmen who want access to American capital markets, marketplace, stock markets, securities laws, venture capital, banking, tax laws, patent protection and then want to "offshore" labor. I subscribe to the theory --- I live here. I give here.

I want all the crooks out of the business environment --- crooked investment bankers, commercial bankers, stock brokers, CEOs, etc. etc. This most recent economic crisis was created by the same greed, hubris, dishonesty, cleverness, lack of perspective and manipulation that created the Great Depression and the S & L crisis. It's a story as old as the Bible and a pox on all their houses.

No "-ism" has ever been pure. It is a body of thought and it gets a bit messy when the theory must be converted into operation; but, the underlying concepts can exist. In addition, some things in life are simply unfair and sometimes luck adorns a chump as brilliantly as a hard worker.

I don't think there are always "sides" in life.

I do think that a President's governing philosophy is an important ingredient in understanding how he will lead our Nation and respond to challenges --- big and small. We are all held hostage to the experiences that we have lived through --- or, more importantly, the experiences we have not lived through.

I think that BO is a corrupt, naif, fakir and poseur. He is a combination of good and bad --- as is everyone. I think he is naive enough to not understand how to harness the power of self actualization in a capitalist economic system to create jobs, wealth, confidence and stability. In some ways this manifests itself in not trusting success and successful people to harness success for good and he therefore feels compelled to confiscate success in order to ensure its distribution in a socialist manner more to his liking.


Anthony Cyrnak 8 years, 6 months ago

JLM--Your statements suggest that you have a well-defined and thoughtful view of politics and economic life. It seems too that you were able to take advantage of the educational opportunities offered to you, and you combined them with honest hard work. Rightly and luckily, you were rewarded with success.

It's difficult for me to see how the same is not true for BO. Frankly, therefore, I do not understand your very low opinion of the man and the harsh descriptions you use to describe him. It almost seems that you are frightened of him.

Importantly, I think your fear that BO will somehow undermine capitalism or fail to promote entrepreneurial efforts directed at wealth creation are misguided. What in his statements suggests such outcomes? Certainly, he has reached out to and surrounded himself with successful people, including businessmen, some of whom are his biggest donors. And, that is part of the reason that I trust him. I strongly doubt that he feels in any way the need to "confiscate success" and create a socialist society in our country. If anything, he is trying to create more success in this country by giving poorer people a hand up.

Our society needs needs to be very careful in providing the private sector with the means to pursue self-actualization in capitalism. The S&L scandal of the 1980s and the current financial crisis are prime examples of what can happen when proponents of the "invisible hand" run amok.

At this time in our country I am more inclined to look lower on Maslow's triangle and to focus more on fulfilling the basic needs of so many of our fellow citizens. There is plenty of wealth at the top in this country; there are many opportunities left, and they are not going away, with or without BO.

P.S.--a few questions for you. . .What in JM's background suggests that he would be a true champion of capitalism? After all, he has spent his ENTIRE life in the bosom of the government. Do you agree with him that his running mate is qualified to be president should he die or become incapacitated? Would JM be one of the smartest guys in the room in any meeting involving the president? (Bush Jr. wasn't, and it's not hard to see how his lack of intelligence, education, (I know that he graduated from Yale. ) and focus hurt our country by allowing those around him to essentially hijack his presidency for their own purposes.)

Good luck to you. You seem like an effective person, but you might do more good if you were to open your mind and heart a little and allow that others may not have had the same opportunities, natural endowments, experiences, and luck in life as you. In fact, doing so might even provide you the self-actualization and peak experience that we all crave.

Regards, AC


Anthony Cyrnak 8 years, 6 months ago

Everybody--OK; I hereby retire from the political discussion above. In fact, I would like to hear some discussion of the Fortress/Intrawest debt refinancing myself. Seems like it could have some big implications for the ski area. . . .AC


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