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A foreclosure of Olympic proportions

Nancy Marshall-Genzer Feb 17, 2010

A foreclosure of Olympic proportions

Nancy Marshall-Genzer Feb 17, 2010


Kai Ryssdal: And because I am such a good guy I am not going to tell you what I know about who won what in Olympic ski racing today. Even though I read it on the newswires earlier, I am firmly in the camp of not wrecking anybody else’s tape-delayed viewing pleasure. But on the very hill that the downhill events are being run, there is a new Olympic event making its debut this week: It’s called foreclosure.

The group that owns the Whistler Blackcomb ski resort has fallen behind on its payments. And creditors say they are going to foreclose smack dab in the middle of the games. Marketplace’s Nancy Marshall Genzer reports.

Nancy Marshall Genzer: The Vancouver Olympics have been dubbed the Glitch Games.

There were problems with an Olympic cauldron during the opening ceremony. Things went downhill from there, with bad weather and postponed events. Now this.

DAN MUDD: We missed a payment.

That’s Dan Mudd, the CEO of Fortress Investment, speaking on CNBC. Fortress is a hedge fund that bought Whistler Blackcomb in 2006. It borrowed a lot of money. Creditors weren’t happy when Fortress missed a debt payment in December. They say they’ll foreclose on Friday. Mudd says negotiations are underway to avoid that.

MUDD: Everybody’s at the table, everybody’s talking, sometimes the voices are louder, sometimes they’re quieter. We’re working to get there.

If they don’t get there, could Whistler Blackcomb be on the auction block on Friday? Would the Olympics be disrupted?

Jonathan Basile doesn’t think so. He’s an economist at Credit Suisse.

JONATHAN BASILE: If it’s going into foreclosure, maybe it’s in the pre-foreclosure process, and not necessarily further along where they’re going to take the keys from everybody and lock them out.

Why is Fortress Investment so close to losing the keys? Karen Petrou is with Federal Financial Analytics. She says Fortress built a bunch of swanky slope-side condos at Whistler, just before the bottom fell out of the housing market. People who had planned to take out a home equity loan to buy a second home at Whistler had to change their plans.

KAREN PETROU: The first homes have been ATMs for seconds, and the money just fell out of the machine.

Leaving Fortress Investment with a mountain of debt.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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