If the Canadian government wants this month’s Winter Olympics to go off without a hitch, it may have to pay up big.
Fortress Investment Group, which owns the British Columbia ski resort where the games’ alpine events are scheduled to take place, is demanding about US$90 million from the Canadian government, the New York Postreports. If it does not get paid, the alternative investments giant is threatening to begin legal proceedings which threaten to disrupt the Olympics, which are to begin on Feb. 12 in Vancouver.
Fortress says Ottawa promised to make it whole before the Olympics, according to the Post. The Whistler Blackcomb resort is owned by Intrawest, which Fortress bought in a leveraged buyout four years ago. Intrawest is in default on more than US$500 million in debt.
That fact also casts a shadow over the games, with Intrawest’s creditors threatening to begin auctioning off the company’s assets, including Whistler Blackcomb, on Feb. 19, smack dab in the middle of the Olympics. But Fortress is reportedly offering a cash payment to Intrawest’s lenders—though less than the US$524 million it owes—and higher interest rates in exchange for two years to solve Intrawest’s problems.
Even though the lenders are likely to make more by selling off Intrawest’s assets, which include Stratton Mountain Resort in Vermont and the Village at Squaw Valley in California, the Post reports that a deal is likely to be struck allowing Fortress to retain control of Intrawest.