By Duncan Mackay
January 20 - The Whistler Blackcomb resort is to be put up for auction while it is hosting Olympic events next month after creditors effectively seized control of the assets of Intrawest ULC after the company defaulted on a $1.4 billion (£859 million) loan.
The Whistler resort is one of several major ski resorts owned the company and a notice of a public auction to be held on February 19 has been published in seveal newspapers in Canada and the United States soliciting bids for a membership interest in Intrawest Holdings.
Among the assets in the notice were "partnership interests in two resort properties located in Canada (Whistler and Blackcomb)."
In 2006, New York-based hedge fund Fortress Investments LLC bought Intrawest in a $2.8 billion (£1.7 billion) deal.
But Fortress recently missed a $524 million (£321 million) debt payment connected to that purchase.
The primary lender on the Intrawest deal in 2006 was defunct investment bank Lehman Brothers.
New York debt managers Davidson Kempner and Oak Hill Advisors also helped finance the deal, and it is claimed that the major creditors are united in pursuing the auction process.
But the Olympics, which open on February 12, are not under threat as the auction will not happen until after the Games have begun.
The issue is further complicated, however by a report that Vancouver Olympic organisers are considering pulling their financial backing of Intrawest as a result of the problems.
In February 2009, the City of Vancouver came under fire for agreeing to bankroll the $1 billion (£614 million) price tag to construct the Olympic Village after Fortress backed out of that project because of cost overruns.
Fortress chief executive Wes Edens claims he has a legal right to keep the Games from taking place at Whistler if Olympic officials withdraw their financial backing for Intrawest facilities now, a report in the New York Post claimed.
Dan Doyle, the President of Vancouver 2010, said: "We understandably cannot comment on Intrawest's finances beyond our continued support for their efforts to settle outstanding financial matters.
"What we can confirm is that Whistler Blackcomb is an important partner in the staging of the 2010 Games and we continue working in very close partnership with them to finalize overall preparations and readiness for the skiing and sliding sport events.
"We look forward, with them, to welcoming the world in 23 days."
Whistler Mountain is due to host several sports during the Games, including the alpine skiing, the blue riband event of the Winter Olympics.
The men's skiing which will take place on the Dave Murray Downhill course, while women's events will take place on a new course, which starts on Wild Card, cuts across Jimmy’s Joker to Franz's Run and connects at the bottom of the Dave Murray Downhill.
Whistler Blackcomb claims that the mountains will remain 90 per cent open to the public during the Games.
Intrawest claims that the Olympics are not in jeopardy.
Bill Jensen, the chief executive of Intrawest, said: "We have a 2002 agreement with VANOC to host the Winter Olympics and have every confidence that VANOC will honour its financial commitments.
"Intrawest is looking forward to a successful Olympic Games.
"Our company is generating strong cash flow from its resorts.
"It's business as usual."
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