Bankruptcy court approves Dyer Mountain sale
|Although the deal has yet to be finalized, a federal bankruptcy judge last week approved the sale of Dyer Mountain to Sierra Pacific Industries for $17.2 million. While Dyer Mountain was to be the site of a 7,100-acre four-season resort, the project’s owners filed for bankruptcy and owe Lassen County about $3.3 million in back taxes, penalties and interest. SPI says it intends to harvest timber on the property and has no interest in developing it. File photo|
Sept. 10, 2013 — Dyer Mountain, the site of a controversial proposed 7,100-acre four-season resort of ski facilities and luxury homes approved by almost 63 percent of Lassen County voters in 2000, could return to timber production soon.
On Tuesday, Sept. 3, federal bankruptcy judge Thomas E. Carlson approved the sale of the Dyer Mountain property to Sierra Pacific Industries for $17.2 million “as is” subject to certain terms and conditions, according to a timberlands purchase and sales agreement mentioned in documents from the San Francisco court dated Aug. 30. SPI offered to purchase the property in May through what could be considered a short sale.
Mark Pawlicki, a public information officer for SPI, said the company intended to harvest the timber on Dyer Mountain, and the company wasn’t interested in developing the property.
On Thursday, Sept. 5 Pawlicki said the sale has not been finalized yet.
According to the court documents, SPI hopes to close the sale as quickly as possible in order to “harvest the available timber before winter when harvesting becomes more difficult or impractical.”
The Dyer Mountain resort project has gone through several owners since its approval by the voters in 2000. CMR Mortgage Fund, LLC, filed a voluntary chapter 11-bankruptcy petition in November 2008. It filed two additional voluntary chapter 11 petitions in March 2009.
According to the court documents, Dyer Management, LLC, owns the property and timberland located in both Lassen and Plumas counties.
CMR Mortgage Fund, LLC, owns 66.7 percent of Dyer Management, which retains the remaining 33.3 percent ownership.
According to the court documents, Frontier Ridge Global Fund LP, the manager of Dyer Management, contends it has not been paid any management fees since its appointment in 2009.
The court documents report the Dyer Mountain property is encumbered by two outstanding loans — the senior loan for $10 million secured by two first priority deeds of trust.
CMR Mortgage Fund, LLC, does not have an interest in those deeds of trust held by Dyer Loan, LLC, First Street Commercial Mortgage Fund, LLC, and Brodke and Noe Profit Sharing Plan FO Stephen H. Able, groups the court calls the senior lenders. The senior lenders assert more than $18 million is due and owed inclusive of interest and fees.
The property is also encumbered by a second priority deed of trust with the original principal amount of $10 million — which the court refers to as the junior loan.
CMR Mortgage Fund, LLC, owns a 55 percent interest in the junior loan, Frontier Ridge Global Fund LP holds a 10 percent interest with other note holders owning the remaining 35 percent.
According to the court documents, the senior release agreement the senior lenders consent to the sale for $16.65 million less an amount not to exceed $38,000 in closing cost, less the $216,858.81 in property tax liability (covering the period from October 2012 through August 2013), 50 percent of any reduction in property taxes from the taxing authorities plus $375,000 representing 50 percent of the proceeds from the sale of timber in Timber Harvest Plan 1.
According to the junior release agreement, those lenders will receive approximately $1.525 million and will pay $500,000 in unpaid management fees.
The court also agreed the debtors may cease accruing unpaid real property tax obligations, which accrue at the approximate rate of $40,000 per month, so SPI may begin harvesting timber before inclement weather precludes such activities.
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