Granby Ranch, a beautiful 5000 acre ski and golf resort community in Grand County has had its share of ups and downs. In the latest financial spin, lenders say, “The property is inadequate security for repayment of the loan.”

Last week Granby Prentice, LLC (“Lender”), the financial holding company of Granby Reality Holdings, LLC (“GRH”) debt, filed a lawsuit asking a Grand County District Court judge to begin judicial foreclosure proceedings and appoint a receiver to control and auction the property. The official documents presented to the court showed the debt somewhere north of $62 million, and according to court filings by the Lender, the amount owed is higher than the estimated value of the property.

Last month, Marise Cipriani, the owner of Granby Ranch ski and golf resort community, told local leaders she was walking away from the property, handing over the deed to the lender in lieu of foreclosure.

The deal was not good enough for the Lender and on Friday, January 10, 2020, Granby Prentice filed a lawsuit in Grand County Court seeking the appointment of a receiver and judicial foreclosure of its collateral. On the same day, the Lender filed the motion on grounds that GRH’s financial condition and recent conduct gives rise to a risk of irreparable injury to its collateral. Specifically, the Lender alleges that it is entitled to the appointment of a receiver as a matter of right under the Granby Deeds of Trust, because GRH is in default under the promissory note, loan agreements and deeds of trust.

On January 14, 2020, Cipriani filed a counter to the suit stating nothing in this provision of the Granby Deeds of Trust specifically allows the appointment of a receiver without notice. Therefore, in the absence of a deed of trust allowing the appointment of a receiver without notice, like in GE Life and Annuity Assurance Company, the Lender must demonstrate that exigent or emergency circumstances exist before appointment of a receiver on an ex parte basis. The Lender has failed to demonstrate the presence of exigent circumstances. Instead, it grossly mischaracterizes the history of the events.

The property is not worth the debt Cipriani owes and that her recent actions could be damaging the value of the property sets up “Emergency Verified Ex Parte Motion for Appointment of Receiver”, according to Lender and a counter by Cipriani’s attorneys states, “if any crises exist, it was created by Lender’s malfeasance and own gross embellishment of the factual circumstances.” These legal comments seem to set the stage for a lengthy court battle over the receivership and sale of the Granby Reality Holdings, LLC property.

If Grand County Judge Mary Hoak agrees that Cipriani is in default on her loans, the property will most likely be controlled by a third-party and sold at auction. It is unclear how the foreclosure would impact the ski area this season. It is in the interest of the receiver to manage the asset until the sale and, in most instances, these cases remain in a “business as usual” status quo, so the sale price is not encumbered by the events leading up to the auction or sale.

Granby Mayor Paul Chavoustie said, “It is very disappointing this is going through a judicial foreclosure.” Chavoustie has been contacted by several real estate development property investors with deep pockets. “The contacts I have spoken with are experienced and have a vision for Granby Ranch.”  Chavoustie said the investors, including the initial group that came to the table last year, are serious and would like to move forward sooner than later. Chavoustie added, “This lawsuit is unfortunate, because the court proceedings will take time and hold up the process. I believe a deed in lieu would have been a faster transition and better for the community.”  

In a judicial foreclosure, once the lender files a foreclosure lawsuit in court, the property owner receives a summons and the property owner can either let the foreclosure happen or contest it in court. If they choose the latter, the court holds a hearing and a judge decides whether to let the sale proceed. If the sale is approved, a date is set. If the property owner doesn’t contest the foreclosure, the court issues a default judgment and authorizes the sale. According to official court documents filed by Granby Prentice, the foreclosure includes multiple deeds of trust, amendments, assignments and releases. It is complex and needs to be thoroughly examined and ruled on in court. A local real estate attorney said, “In complex real estate property proceedings such as this, lenders prefer the judicial system because it can identify and clean up junior liens, additional assets, complex assignments and other holdings or interests. A judicial foreclosure can also allow the lender to go after the property owner for shortfalls from the sale.” 

Marise Cipriani bought the ski and golf resort for $12 million in 1995 and Cipriani has worked for nearly 25 years to turn her dream into reality. She donated time, land and money to the community, but since the economic recession of 2009, Granby Ranch has struggled somewhat financially. Cipriani said, “I have been working to avoid a foreclosure. We really tried to work with the lender and give the deed in lieu in order to preserve the value of the property.” She added, “It is unfortunate. It was a right they had to file for a foreclosure, and they exercised it.”

Granby Ranch is part of the Town of Granby and the roads around the property are in need of serious repairs and maintenance amounting to nearly $3.4 million. GRH, LLC has bond funds to cover about $1.7 million of the road repair estimates. 

The idea of a court-ordered foreclosure worries residents in and around the ranch, however the ski resort continues to operate under a cloud of controversy. Frustrated homeowner Matt Girard said, “The residents have anxiously waited for the resort ownership to transfer to the next owner and see the resort move on, as Ms. Cipriani publicly announced and has been working on since late 2017.  The residents have also waited for years for proper and complete road repairs as promised by GRH, which they are now not completing and are passing along to the next resort owner. The residents are frustrated it has taken so long, and this foreclosure legal battle between will likely delay these issues even longer.”

One of the concerns brought forward by the homeowners of Granby Ranch is the collateral pledge Cipriani made to the Lender for the Ranch Hall facility which includes the pool, hot tub and workout facility. The homeowners have been making payments for nearly 10 years and are just shy of completing the $2.2 million dollar lease purchase agreement. The documents filed in Grand County courts by Granby Prentice clearly state the Ranch Hall facility as part of the collateral for the resort and the facility is subject to foreclosure.  

Granby Prentice took over Cipriani’s debt from her previous lender, Redwood Capital Finance Company, in April 2016. Both entities seem tied to the real estate investment firm, Pacific Coast Capital Partners, sharing the same Los Angeles address. Granby Prentice has told Granby town leaders that Pacific Coast Capital Partners will manage the resort operation when it takes control of the property. Chavoustie said he is trying to meet with the receivers this week to discuss the ongoing operation of the ski and golf resort as the court proceedings move forward.