Promontory Goes To Auction April 15th, 2009

The holdings of an embattled developer in the Snyderville Basin will go on the auction block as part of a plan for Promontory to emerge from Chapter 11 bankruptcy.
Bidders must submit offers in advance or pre-qualify with the court by April 13 to participate in the real-estate sale, Promontory Managing Director Rich Sonntag said in a prepared statement.
A U.S. Bankruptcy Court judge approved the auction March 12 as part of a plan for Promontory to reorganize.
Instead of providing Promontory roughly $70 million in exit financing to keep the luxury development afloat, Credit Suisse, the agent for first lien holders, instead will have property at Promontory sold to the highest bidder, according to a court document Credit Suisse filed Thursday in U.S. Bankruptcy Court in Salt Lake City.
Promontory was forced into bankruptcy last year after the sagging real- estate market in Park City caused the developer to default on substantial debt.
The successful bidder at next month's auction could own property at Promontory and operate its facilities if the development emerges from bankruptcy this spring, as Sonntag expects.
"This auction process was always a possibility in the event Credit Suisse decided it might not want to control Promontory itself,"
Sonntag said in an email to The Park Record. "The auction allows other parties, who are more directly involved in the development business, to bid for control and may even accelerate Promontory's rebound from bankruptcy under the guidance of a qualified developer."
Following the April 15 auction, a court hearing will determine the winning bid, Sonntag explained.
Promontory has been in bankruptcy since creditors filed involuntary Chapter 11 petitions last spring against Pivotal/Promontory Capital LLC.
"Our members and the Park City community can remain confident that Promontory will emerge from bankruptcy with our vision securely in place," Sonntag said Friday.
The luxury golf and equestrian community contains mostly vacation homes on about 7,200 acres in western Summit County. The plan includes about 1,924 houses on land east of U.S. 40 and south of Interstate 80.
More than 700 lots have been sold at Promontory and roughly 300 houses have been built or are under construction.
Important provisions of the court-approved reorganization plan at Promontory will bind the winning bidder, according to Sonntag. The new owner must honor the community master plan approved by Summit County, membership agreements and lot-purchase agreements, Sonntag said.
A spokesman for Credit Suisse declined to comment on Friday.