Tough Times at the Club
Yellowstone Club Files For Bankruptcy
Late Monday the uber-exclusive Yellowstone Club near Bozeman filed for Chapter 11 bankruptcy protection after negotiations broke down with lender Credit Suisse, from whom it borrowed some $300 million several years ago.
The first court filings, which bear the signature of club manager and co-owner Edra Blixseth, cite a combined debt of $344 million and assets of about $1.1 billion. The bankrupt companies include Yellowstone Mountain Club, Yellowstone Development, Big Sky Ridge, and Yellowstone Club Construction Co, according to court documents.
"I think we had a perfect storm. We're in a tough liquidity position," said club spokesman Bill Keegan. "We were seeking new long-term financing as part of our long-term capital needs, and then the lending markets froze. We felt it was best to protect the club, the members, and our future by seeking Chapter 11 protection."
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The News Industry
Lee Enterprises Trims Employee Benefits, Cuts Corporate BonusesAt early morning meetings today at the Missoulian and other Lee Enterprises newspapers across the state and the nation, company officials announced plans to suspend profit-sharing with most employees, cut by half the company's matching contributions to employee retirement accounts and suspend corporate executive bonuses for the year.
In addition, Lee Enterprises announced yesterday it had refinanced its $1 billion debt load and, as a condition of the deal, suspended dividends to shareholders.
Lee newspapers have significantly cut staff across the company in recent months in an effort to cut costs in the face of declining ad revenues and rising production costs.
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new west conference
Housing Won’t Bottom Out Until Late 2009 or 2010, Economists Say
A big screen image of a howling ghost opened Chris Thornberg's economic forecast Friday morning at NewWest.Net's 3rd Annual Real Estate and Development in the Northern Rockies conference.
So what was Thornberg's spooky forecast?
"We're not out of this, by any stretch of the imagination; 2009 is going to be a bad year, not deeply negative, but a little bit negative. We're not going to come out of this until the first quarter of 2010," he said. "There will be a lot of bankruptcies. It'll be bad, but not a depression."
Thornberg presented his economic forecast and then spoke on a panel at Missoula's Hilton Garden Inn with regional economist Tobias Madden of the Minneapolis Branch of the Federal Reserve Bank, economist Larry Swanson of the Center for the Rocky Mountain West in Missoula and real estate economist Dave Eacret of Sand Point, Idaho.
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The Latest from RealtyTrak
Foreclosure Report: Montana and Colorado Better; Idaho and Utah Worse
Even as the real estate market continues its freefall in Nevada, Florida and California, foreclosure rates in Montana and Colorado have begun to drop, according to the latest figures from RealtyTrac released today.
September did not hold good news throughout the Rocky Mountains. Foreclosure rates last month continued to climb in Idaho and have doubled since last year in Utah.
RealtyTrac publishes a national database of foreclosure and bank-owned properties, with over 1.5 million properties from over 2,200 counties across the country, including from across Montana and other rural states in the West.
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Montana Banking News
Montana Nonprofit Bank Gets $40 Million in Federal Tax CreditsThe Missoula-based Montana Community Development Corp., a nonprofit bank, received $40 million in tax credits from the U.S. Treasury Department to encourage investment in the state.
"We'll be able to use this program to help take Montana businesses to the next level," said MCDC's David Glaser.
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Real Estate
90 Layoffs at Moonlight, as Resort’s Cash Troubles Continue
A mass layoff at Moonlight Basin near Big Sky, Montana, has sent a chill through Gallatin Canyon's resort community.
Sources said about 90 employees lost jobs. CEO Lee Poole declined in a written statement to address specifics of the layoffs or how many workers remain.
"Moonlight Basin Ranch and a number of its subsidiary companies have decided to immediately implement temporary layoffs of a portion of its workforce," Poole said in a press release issued late Wednesday afternoon. "We are deeply saddened by this painful but necessary action."
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Tomorrow in Chicago, Minneapolis Federal Reserve Bank president Gary Stern will give an updated version of his speech called "Repercussions from the Financial Shock" in which he argued that banks should be allowed to fail, so managers will learn the harsh lessons only failure can teach.
The text of the new speech at the Council of Institutional Investors won't be made available. Perhaps the subject matter is too close to a critique of the daily money matters rocking the financial world and the world economy. Not that anything should be read into his decision. Stern is a private Fed president. He speaks less than most others, said Minneapolis Fed spokeswoman Patti Lorenzen, and it's fairly standard for him to keep the text of his speeches to himself.
The upshot is that unless you're planning to attend the meeting in Chicago tomorrow, you'll miss the words of this influential and smart guy. That's why I thought it would be a good idea to point you to this story I wrote about Stern's earlier version of this same speech, given in Three Forks in mid-August.
In light of recent events, I might re-write the headline as follows: Fed Reserve Branch Head Says Let Banks Fail.
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More Editorial Cuts, and More and More
Will Newspapers Deliver News Anymore?Newspapers cuts this week have begun to seriously call into question the continued ability of newspapers to deliver news.
Yesterday the independently owned Spokesman-Review announced plans to cut 27 more newsroom jobs, almost one-quarter of its editorial staff while newsprint prices continue to soar and profits, industry-wide, keep plummeting.
Earlier this week Lee Enterprises flagship paper, the St. Louis Post-Dispatch, cut 18 more jobs, including its primary cops reporter. Over the past few months, the newsroom has been practically gutted by Lee, which remains one of the few profitable newspaper companies.
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Housing Down, Fuel and Food Prices Up
More Montanans Seek Bankruptcy Protection
Mortgage resets, the rising cost of food and fuel and the slowdown in the housing market have pushed personal bankruptcy filings to nearly double the numbers from two years ago, according to numbers from the U.S. Bankruptcy Court in Butte.
In the first nine months of 2008, there were 1,140 new Chapter 7 bankruptcy filings, up from 664 over the same period two years ago.
The most dramatic increase has been in the past few months, especially in September, said Lynn Myers, chief deputy clerk at the state's bankruptcy court.
"We had 25 cases open up in one day," Myers said. "We haven't seen something like that since October in 2005."
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Stimson Lumber Co. will go forward with plans to auction off its sawmill and plywood-making equipment at the former lumber mill just east of Missoula in Bonner in about two weeks, said Stimson's Jeff Webber.
"It'll be at the mill site. What it'll be like is the auctioneer will come in and people will come over, and they'll start from one end and go to the other, marking it all out in separate bid lots," Webber said. The proceedings will be managed by Washington-based industrial auctioneer James G. Murphy Co. The two-day auction will start Oct. 14.
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