February 1, 2010
 
Whistler owner wants Ottawa to pay $90M US: report
 
By CBC News
 
The New York Post reported Monday that the parent of Intrawest ULC, the
company which owns one of the venues for the Vancouver Winter Olympics,
wants the Canadian government to put up $90 million US before the Games
start or it will sue.
 
The New York Post reported Monday that the parent of Intrawest ULC, the
company which owns one of the venues for the Vancouver Winter Olympics,
wants the Canadian government to put up $90 million US before the Games
start or it will sue.
 
The Post reported the parent firm, Wall Street hedge fund Fortress
Investments LLC, is negotiating with the Canadian government, with the
report quoting Fortress as saying Ottawa had promised to compensate it for
the time Whistler Blackcomb is used for the Olympics.
 
Whistler is to be the site of alpine skiing events during the Olympics,
which start in 11 days.
 
The report said Fortress wants to get paid before the Games start or it
will start legal proceedings. It did not identify its sources.
 
An Intrawest spokesman said it would not comment on the report but CEO
Bill Jensen said in a statement that the company "has a 2002 agreement
with VANOC (the Olympic organizing committee) to host the Winter Olympics
at Whistler Blackcomb and have every confidence that VANOC will honour its
financial commitments. Intrawest is looking forward to a successful
Olympic Games."
 
The Intrawest spokesman, Ian Galbraith, told CBC News separately the terms
of the agreement have not been made public but described it as a "make
whole" agreement. He did not elaborate.
 
Make whole is a term used in business circles to describe compensation for
losses.
 
The Post also reported that Fortress is offering cash to lenders of
Intrawest in an offer to creditors that would give it more than two years
to pull Intrawest out of its financial troubles.
 
Fortress paid $2.75 billion when it bought Intrawest in 2006, much of it
with borrowed money. It is late on a $524-million debt payment.
 
Lenders have set a deadline of Feb. 19 ? in the middle of the Games ? to
foreclose on Intrawest if they do not get more money from a deal to
rearrange Intrawest's debt.
Report said to be credible
 
James Brander, a professor at the Sauder School of Business at the
University of British Columbia in Vancouver, said the report that Fortress
is looking for $90 million is credible.
 
"It's not the slightest bit surprising that Fortress seems to be using
brinkmanship with the Olympics about to start. That has certainly happened
with Olympics before," he said.
 
"Sometimes governments give into that. More commonly they don't," he added.
 
Brander said Fortress is trying to raise cash to buy time with the
lenders, but he predicted the lenders won't agree to that. He expected
that Fortress will end up losing the Intrawest assets including not only
Whistler but also Mont Tremblant in Quebec and Blue Mountain in Ontario.
 
Even if the lenders do foreclose during the Games, he said, he doubted it
would make any difference.
 
"That's a paper transaction. That doesn't affect what's happening on the
ski hill," he said.
 
"It is possible that Fortress might threaten to do something like try to
close down operations," he said, "but ? I strongly suspect they don't have
the legal right to do that."

CBC News