The new operator of a popular ski resort in New Hampshire faced off against concerned residents, some of whom fear the company's past legal troubles raise doubts about whether it was the right choice to oversee the facility.
New York hedge fund manager Och-Ziff Capital Management assumed ownership of 14 properties held by CNL Lifestyle Properties last year including the lease at Mount Sunapee Resort in New Hampshire. CNL will receive about $830 million in cash and stock under the purchase and sale agreement.
Among the other properties were Sunday River and Sugarloaf in Maine, Crested Butte in Colorado, Brighton in Utah and Sierra-at-Tahoe in California.
At a public hearing on the sale Tuesday, dozens of residents filled a meeting room at the base of the resort to hear about Och-Ziff's plans. Some brought signs protesting the fact that the state-owned property was being run by a private owner, including one that read, "Mount Sunapee Park is an Endangered Species" and another that read, "Don't Mortgage Our State Park."
Despite the state's assurances that the sale wouldn't impact operations, several people who live near the resort or ski there worried about the company's intentions and its past record.
The company reached a settlement last year with the Department of Justice and the Securities and Exchange Commission regarding bribery allegations in Africa. The company paid a $213 million fine in connection with what the Department of Justice called "a widespread scheme involving the bribery of officials in the Democratic Republic of Congo (DRC) and Libya."
"We appeal to elected state officials to begin a complete and transparent review of this lease acquisition and all documents related to it so that the people of New Hampshire, who are the rightful owners of the Mount Sunapee State Park, can (be) rest assured that our state park is in the hands worthy of the public's trust," Steve Russell, the president of the Friends of Mount Sunapee, told the meeting.
Joan Schwartz, a Sutton resident who has skied frequently at the resort, said residents were not only uncomfortable with the bribery allegations but with the fact the company was a hedge fund which has an "obvious interest for making money."
"The concern is that once it becomes an asset of the hedge fund, it puts the property at risk," she added.
The company acknowledged the bribery scandal involving two former employees but said that it had put in place several measures to ensure the problems wouldn't happen again. Among them were the hiring of a compliance officer, a dedicated lawyer to oversee its Foreign Corrupt Practices Act control efforts as well as several policies and procedures related to the bribery that took place from 2007 to 2011.
"To me, the true mark of a firm's character is how it reacts to such a situation to responsibly better itself and guard against the likelihood of future similar conduct," David Levine, the chief legal officer for the company, told the crowd. "The firm is proud of the numerous steps it has taken."
The state welcomed the company's response in the wake of the bribery scandal, adding that skiers wouldn't notice any changes with Och-Ziff taking over Mount Sunapee.
"People are going to continue to see the same face, the terms and condition of the lease are going remain exactly the same," Jeffrey Rose, the commissioner of the Department of Resources of Economic Development, said. "It's really kind of a financial transaction that doesn't have any practical implication to the actual operations of the mountain and what people know as a great, world class ski area."