Fortress-Davidson Kempner Fight Could Mar Olympics

Jan 29 2010 | 12:08pm ET

The Winter Olympics in Vancouver are set to begin in two weeks and end in four. But during that fortnight, the very ground beneath its feet could change hands.

The battle between a pair of hedge funds over a debt restructuring could come to a head during the 21st Winter Olympiad. Creditors, led by hedge fund Davidson Kempner Capital Management, of ski resort owner Intrawest, which is itself owned by Fortress Investment Group, have placed newspaper advertisements announcing plans to auction off Intrawest’s assets on Feb. 19 in New York. Among those assets is the Whistler Blackcomb resort in British Columbia, which is to host the Olympics’ alpine competitions.

Intrawest is currently late on a US$254 million debt payment, and Davidson Kempner has reportedly balked at Fortress’ bid to maintain a hand in the running of the company.

“Negotiations are still ongoing,” an Intrawest spokesman said. Intrawest added that Fortress was still in control of the resort operator, which owes members of the creditors committee nearly US$1.4 billion.

The Davidson Kempner group is threatening to sell off several other prominent Intrawest ski resorts next month, including Stratton Mountain Resort in Vermont, the Village at Squaw Valley in California and Québec’s Mont Tremblant Resort. Intrawest yesterday struck a deal to sell another British Columbia resort, Panorama Mountain, to a group of local businessmen.

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