Western Resorts’ Fiscal Woes Hit Employees

By Matthew Frank, 4-02-08

The effects of the financial market flux that has a handful of high-end Western resorts reeling are trickling down to employees.

Turns out the Promontory Club, in bankruptcy court in Utah because it can’t make loan payments on Credit Suisse’s $275 million loan, hadn’t been paying the help, according to a story today in the Salt Lake Tribune. One quoted cook is owed about $2,000.

But attorney Kenneth Cannon, representing a number of the creditors in the bankruptcy case, told NewWest.Net in an email today that the court on Tuesday approved an interim borrowing of $2 million and payment of pre-bankruptcy employee wages and salaries, plus honoring member deposits and club credits. He said payroll will be made today or tomorrow. The club employs 175 people.

“I believe that everyone recognizes that it is critical to maintain stable and continuing operations and will see to it that happens,” Cannon wrote. Club manager Richard Sonntag made a strong case for exactly that in his court declaration Monday: “At a time when member loyalty and patronage is critical to the debtors’ reorganization efforts, the debtors submit that it is entirely necessary, and appropriate, for the court to issue an order in these circumstances.”

In Idaho, the Statesman is reporting today that Tamarack Resort’s former vice president of real estate sales Rory Veal is suing for damages for severance pay and real estate commissions he claims Tamarack owes him. He’s asking for more than $1 million. Last week the resort, also embroiled in bankruptcy proceedings, announced it was laying off a number of full-time employees. Tamarack owes Credit Suisse about $262 million.

We’ll keep you posted as all of this continues to shake out.