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Canadian bailout for Whistler Blackcomb owner?

Federal involvement might be the solution to a serious financial dispute over the owner of Whistler Blackcomb, according to a major U.S. newspaper.

“Things may have gotten so bad that only the Canadian government can save the day,” the New York Post recently reported.

At issue is the financial future of debt-laden Intrawest. Negotiations between two hedge funds -- Davidson Kempner and Fortress Investment Group -- have staggered to a halt, according to the Post.

Fortress bought Intrawest for US$2.75 billion in 2006. In recent years, both companies have struggled. Fortress’ stock value has plunged 75 percent since early 2007, Bloomberg news agency reported last month.

And the New York-based hedge fund was a major player in Vancouver’s Olympic Village controversy.

Intrawest nearly went bankrupt in October 2008, but a last minute financing deal saved the day. Only months later, the Tyee reported that further problems were likely.

Intrawest is now overdue on a US$524 million debt payment. A group of lenders led by hedge fund Davidson Kempner is negotiating a deal. But Fortress wants to keep some control over Intrawest.

According to the Post, Davidson Kempner has rejected the proposal.

What does this all mean for the 2010 Winter Games? For the time being, nobody's sure.

“Worries about Whistler's financial parent have put the resort itself under a cloud, amid fears that Intrawest's problems will dampen the mood at the events,” the Post reported.

Geoff Dembicki reports for the Tyee.


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