Here we are now, a month later, and those problems seem relatively tame compared to the most recent chapter of the real-life saga. Last Thursday, we reported on our website that the club was facing imminent shutdown by the Vermont Department of Taxes for unpaid tax liabilities. The club was able to cobble together a payment to operate this past weekend, but on Monday the state shut the club down, citing a missed payment of more than $100,000. By Wednesday, they had made a payment and were planning on being open this weekend (see story on page 1).
That type of operational yo-yo must certainly be frustrating to employees, members, and vendors. There are so many questions that come to mind about the Hermitage Club and its current state of financial distress. But the biggest one is “Why?”
Why does a private club, run by a successful businessman and catering to successful people who can afford to pay a premium to join, get so deep in debt that it can’t make its tax payments? Why weren’t there safeguards and oversights in place to avoid just such a situation? Why put so much at risk? Why couldn’t this have been avoided?
We don’t know the answers to these questions. We just don’t have enough inside information to say why. But we can certainly see the fallout.
The hundreds of people who work for the club are left wondering, on a daily basis, whether or not they can go to work and whether or not they will get paid if they do. The people who have invested in the club as members are left wondering what will become of their club. The scores of vendors who supplied goods and services are wondering if they will ever get paid. Local and state officials are wondering if they will ever see all the taxes owed to government entities.
To see the signs posted by the tax department shutting down the club for lack of payment, while not unprecedented, shows just how far down the financial rabbit hole the club has fallen. It is rare that the state will shutter a business for lack of payment. We have seen it just one other time in the past 25 years here in the Deerfield Valley.
In short, it’s a mess. While we were hopeful just a month ago that much of this mess would get cleaned up by the end of the ski season, it has only gotten sloppier.
We don’t pretend to know if there are more shoes to drop, but it seems that little more about the Hermitage Club can be any more surprising than what has happened in the past week. We could certainly speculate about what comes next. Perhaps Barnes and the members strike that deal that seems so elusive. A deal appears to be the only magic wand that can transform this ugly toad right now. If not, bankruptcy would appear to be the next logical step. But logic is the last thing that seems to apply when it comes to the Hermitage Club and its operations.
We are still keeping our fingers crossed that somehow, someway, there is a path out of the hole the Hermitage Club has dug itself into. It’s just that the script keeps changing, and that elusive happy ending to this real-life reality show seems further away than ever.