Dan D'Ambrosio | Burlington Free Press

Jay Peak Resort, which was at the center of one of the biggest EB-5 frauds in history, moved a giant step closer to being sold Friday with the selection of an investment bank to represent it to potential buyers.

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Federal receiver Michael Goldberg said he would file a motion in federal court late Friday or early Monday to retain Los Angeles-based Houlihan Lokey to "assist us with the sale of Jay Peak Resort." He said the resort would be on the market "within a few weeks."

Goldberg took control of the resort in 2016 after the U.S. Securities and Exchange Commission accused former owner Ariel Quiros and his partner Bill Stenger of fraud. The SEC alleged Quiros and Stenger misused $200 million from foreign investors. Quiros was accused of personally profiting more than $50 million.

The EB-5 program offers green cards to foreign investors in exchange for investing in projects in the United States that create jobs. Stenger and Quiros raised some $350 million for projects at Jay Peak, at Burke Mountain Resort and in Newport.

Both Quiros and Stenger agreed to settlements without admitting or denying the allegations in the SEC's complaint, according to the SEC.

Free Press file

The SEC's final judgment against Quiros in February 2018 ordered 17 properties, including Jay Peak and Burke mountain ski resorts and two New York City condominiums, and about $417,000 in frozen cash to be turned over to Goldberg to satisfy an $81.3 million settlement with the commission. The SEC also fined Quiros an additional $1 million.

Stenger was required to pay a $75,000 civil penalty. He was not alleged to have personally profited from the fraud as Quiros allegedly did.

'A free and clear process'

Goldberg said Friday he was ready to take the step of retaining Houlihan Lokey because Jay Peak completed construction of soccer fields meant to boost summer business; and because he reached a settlement with Quiros two weeks ago that "extinguished" all remaining interests Quiros had in Jay Peak.

DAN D'AMBROSIO/FREE PRESS

"That gives us the ability to sell in a free and clear process," Goldberg said. "Everything is done, we've completed construction and the hotel is operating profitably and efficiently."

Two years ago, under Goldberg's leadership, Jay Peak more than quadrupled profits to $10 million, surprising many in the ski industry in Vermont. Results for last year are not yet available, according to General Manager Steve Wright.

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Goldberg declined to speculate on what the sale price for Jay Peak might be. He said the proceeds will be divided equally among more than 400 foreign investors, who are owed about $500,000 each.

"It's the next step in the road, but certainly a big step and we're excited to move down this process," Goldberg said. "We're hoping it will be a very robust sales process with a lot of interest. We expect that it will be, and we know the investors will fare much better now that we have taken control of this thing and made it more profitable than it was under Mr. Quiros."

Rebounding from dire circumstances

Steve Wright said he expects all of the major resort companies to show an interest in Jay Peak, including Vail Resorts, which bought Stowe Mountain Resort in 2017 for $50 million.

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"The question will be whether they are capitalized to the point they can take us on and make whatever investments they think are important," Wright said.

Wright, who has been with Jay Peak from its darkest days through today, when it is being sold, said he is uncertain of his own future at the resort, but feels confident that most of the roughly 1,500 employees will continue in their jobs after the sale. He said he was proud of what has been accomplished since Goldberg took over.

"What it's taught me is what people are capable of even under dire circumstances," Wright said. "How do we move forward with an unclear future and at the same time deliver guest service every day with a smile? That was the difficult part. Once we realized (Goldberg) was a good businessman, people felt a level of safety that made it easy to deliver service and not worry about the future."