The man running Jay Peak Resort has reached a $173,000 settlement with the town of Jay over late property taxes, more than $100,000 less than had been owed.
Details of the agreement between Michael Goldberg, the court-appointed receiver overseeing Jay Peak, and the Northeast Kingdom town were unveiled Friday in a court filing in the federal fraud case against the resort’s former owner Ariel Quiros.
The settlement, approved Friday by Judge Darrin P. Gayles, brings to a close a long-running battle between the town and Goldberg over the late property tax fees associated with the resort and its related properties.
“The Receiver believes that this settlement is in the best interest of the Receivership Entities and the receivership estate because it reduces the liability for taxes and saves the cost, risk and uncertainty of litigation with the Town of Jay,” Goldberg’s court filing stated.
Jay Peak Inc. owns several properties in town, including The Hotel Jay, a waterpark, condos and a golf course.
The dispute stems from the late payment of the 2016 property taxes assessed by the town on Jay Peak and its related properties.
At the time, Goldberg had recently taken over as the receiver for the property from Qurios and didn’t have the funds to pay the roughly $2 million in property taxes due.
By the time the receiver obtained the funds, the town had imposed late fees on the payment, including more than $113,000 in interest and more than $164,000 in penalties on the amount due.
Goldberg contested the interest amount and the authority of the municipality to impose penalties on an property under a receivership. He asked the town to waive the one-time tax deadline penalty for paying late.
The board, following that hearing last year, issued a 50-page written decision that said it found “that Mr. Goldberg did not meet criteria” for people unable to pay their taxes, interest and fees.
The settlement calls for Goldberg to pay the interest amount of $113,539 “immediately” upon the judge’s approval of the agreement.
Then, instead of paying the $164,000 to cover that one-time 8 percent penalty, the receiver will pay $104,000 less, or $60,000. That $60,000 will be paid in increments of $5,000 a month, according to the court filing.
The principal tax payment of $2 million has already since been paid.
“We think the settlement is fair as it is essentially a 50-50 split of the contested penalty amount,” Goldberg said in an email Friday. “The amount in controversy is too little to justify either party going to court over, so it is in both parties interest just to resolve it and move on.”
Jay’s town office is closed Fridays. Attempts to contact the town’s selectboard chair, David Sanders, and the town’s delinquent tax collector, Cindy Vincent Goodyear, were not successful.
Goldberg had argued tax penalties were “non-recoverable” under federal law governing bankruptcy, which he equated to a receivership.
He told members of the town’s Board of Abatement during a meeting last year that he was not aware of a case in which tax penalties had been paid by a receivership, and added he didn’t want to be the first.
Goldberg became the receiver for the properties in April 2016 after separate civil fraud lawsuits were filed by state and federal regulators against Quiros, a Miami businessman and the ski area’s then-owner, and Bill Stenger, the resort’s CEO and president.
The lawsuits accused the two men of misusing $200 million of the more than $350 million they raised through the federal EB-5 immigrant investor program meant to finance massive projects at the resort and other developments in Northeast Kingdom communities.
Since taking over as receiver, Goldberg has worked to improve the cash flow of the resort, which led to the late tax payment, thanks in large part to some large financial settlements in connection with the EB-5 investor fraud scandal.
Those have included a $150 million settlement he reached to resolve claims against Raymond James & Associates. Quiros has settled his case with the U.S. Securities and Exchange Commission, agreeing to turn over to the federal government $81 million in assets, including his interest in Jay Peak Resort.
Neither Quiros nor Raymond James admitted any wrongdoing.
Goldberg’s filing on the tax dispute settlement was made in a federal court in Miami where the fraud case against Quiros had been pending. The case was brought in Florida because that’s where Quiros resides and many of his businesses are based.
Read the story on VTDigger here: Jay Peak receiver and town cut tax deal.