DEVELOPERS OF SKY LODGE FILE CHAPTER 11, OBTAIN OPERATING FUNDS, AND FILE ACTIONS TO FORCE LENDER TO RETURN $5,600,000

PARK CITY, UTAH  
The developers and owners of The Sky Lodge Condominium Hotel in Park City have taken legal action to resolve an ongoing dispute between the project’s two commercial lenders.  The dispute involves a $5,600,000 distribution of funds one of the lenders made to the other.

On Monday, September 14, 2009, the ‘Easy Street’ companies, who own and operate The Sky Lodge, filed petitions in the United States Bankruptcy Court for the District of Utah seeking to reorganize under Chapter 11 of the Federal Bankruptcy Code.

The next day, the Easy Street Companies filed a Complaint in the Bankruptcy Court alleging that BayNorth Realty Fund has refused to return or release $5,600,000 that BayNorth obtained through an erroneous transfer of Sky Lodge sales proceeds. A copy of the Easy Street entities’ Complaint is attached.

Bill Shoaf, who oversees the operation of The Sky Lodge, says that these legal actions are being undertaken at great expense to the Easy Street owners of the project, but that these steps are necessary to protect the property rights and values of the individual Sky Lodge condominium unit owners.  Mr. Shoaf has assured The Sky Lodge employees and unit owners that The Sky Lodge will operate through the winter season.  According to Mr. Shoaf, “The Easy Street entities have been forced to take legal action because the commercial lenders for The Sky Lodge have been unable to agree to return $5,600,000 that is being wrongfully withheld by BayNorth.   These actions will not interfere with the operation of the hotel, and we believe that these actions will ensure that Sky Lodge continues to provide dining and lodging service of the highest caliber.”

“The Sky Lodge remains Park City’s finest boutique resort and we are open for business,” Mr. Shoaf said.  “We will continue to serve our owners and guests and pay our vendors and suppliers in the ordinary course as we move through the legal proceedings.” Mr. Shoaf emphasized that the companies have obtained court orders authorizing continuation of payroll and benefits, and do not anticipate any interruption of The Sky Lodge’s normal operations.