Debt feud intensifies over Winter Olympics resort

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The owner of the British Columbia resort that is hosting the 2010 Winter Olympics is downplaying reports that creditors may try to auction off the resort during the Games.

‘Negotiations are ongoing,’ said Ian Galbraith, a spokesman for Intrawest ULC, which owns the Whistler Blackcomb resort.

Galbraith was responding to reports that creditors holding nearly $1.4 billion in debt on Intrawest have begun foreclosure proceedings on some of the company’s assets, including the resort.

Intrawest’s corporate owner, New York hedge fund Fortress Investment Group, reportedly missed a $524-million payment on the debt last fall and has since been trying to renegotiate the debt.

Creditors of Intrawest, including defunct investment bank Lehman Bros. (represented by a restructuring firm) and hedge-fund sponsor Davidson Kempner Capital Management, put a notice in several newspapers recently, seeking buyers for Intrawest assets, including Whistler, Mont Tremblant in Quebec, Stratton in Vermont and Squaw Valley in California.

The newspaper notice says the assets will be auctioned off Feb. 19 in New York. The Olympic Games run Feb. 12-28.

But Galbraith said the threat of an auction during the Games was a ‘tactical move’ and that Fortress was still in control of Intrawest. A Fortress spokesperson could not be reached Thursday.

-- Hugo Martin