Bankrupt Old Snowmass home valued too high, trustee says
A Denver bankruptcy trustee is questioning the asking price for an Old Snowmass home that is embroiled in bankruptcy.
Trustee Patrick Laying’s court filing claims that the proposed $4.95 million listing price is above market value, based on an analysis done by Zillow, which “suggests that the current sale price of $4.95 million is an above-market price in a relatively flat market. The debtor should discuss why it has chosen this listing price.” Zillow is an online company with a real estate database of more than 110 million residences in the U.S.
The Pitkin County Assessor’s Office gives the property an actual value of $2.66 million; the office will send out new valuations to all county property holders May 1.
On Nov. 4, the owners of the Old Snowmass home, located on a 42.7-acre parcel at 50 N. River Road, filed for bankruptcy protection in Denver, effectively putting off a foreclosure auction that had been scheduled Nov. 5 by the Pitkin County Treasurer’s Office.
The home is owned by Flying W Snowmass LLC of Las Vegas. The LLC’s controlling member is P. Mark Weida, also of Las Vegas. The property, bought in 1993 and developed with a 6,200-square-foot home in 2002, was intended to be an investment holding for the owner, according to a Feb. 2 filing by the LLC’s attorney Jeffrey Weinman of Denver law firm Weinman & Associates PC.
“The intent from the outset was to develop the property for investment and, indeed, (the owner) believed that it could sell the property within a reasonable period of time after it was completed,” the filing says. “Nevertheless, a series of loan transactions relating to acquiring and finishing the property incorporated significant prepayment penalties for early payoff of the loans.”
The bankruptcy petition lists two banks, both out of state, as being owed a combined $3.46 million in outstanding mortgage loans. Deutsche Bank is owed $3.2 million of that sum. Money from the sale would be used to pay off the lenders.
When the property went up for sale in 2008, “the real estate market in Snowmass, as well as all of the United States, had deteriorated markedly,” the filing says.
The home is currently rented out, with all of the funds going to an escrow account, the filing said, noting that “the property is attractive in the summer to fishermen and in the winter to skiers.”
However, the filing, called a “plan of reorganization,” which requires a bankruptcy judge’s approval, was called into question by Laying earlier this month.
Along with questioning the property’s proposed listing price, Laying said the Flying W’s proposed three-year marketing period “imposes a risk of the property declining in value, which would be shouldered by the junior secured creditors and unsecured creditors.”
The February filing by Flying W Snowmass says it has enlisted Coldwell Banker Mason Morse Real Estate of Aspen to list and sell the property, with as much as $297,000 in real estate commission, or 6.7 percent, on a $4.95 million sale.
Flying W Snowmass is awaiting a bankruptcy judge’s approval to list the property for sale. A similar proceeding, but on a much larger scale, is playing out in a Dallas bankruptcy court. There, part-time Woody Creek resident Samuel Wyly has asked a judge to allow him to put his 244-acre Rosemary’s Circle R Ranch on the market for $50 million. Wyly has hired Craig Morris of Aspen Snowmass Sotheby’s International to market the property.
The matter is set for a hearing April 22, according to bankruptcy records.
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