Any Mountain Ltd. has filed for Ch. 11 bankruptcy protection in the U.S. Bankruptcy Court, Northern District of California. The filing came on Dec. 23, 2004, shortly after Cardinal Financial Services served a notice of default of a loan and security agreement with a debt due of $1,807,358.66, according to court documents obtained by SNEWSÂ®.
Based on the documents, Any Mountain also seems to owe a mountain of debt to vendors, with the unsecured creditors list reading like a Who's Who in the outdoor and ski industry. The following are just a few of the largest listed claims:
Atomic Ski -- $214,744
Burton -- $382,000
Columbia Sportswear -- $289,514
Couloir -- $228,752
Dakine -- $64,984
Fera International -- $192,036
Mountain Hardwear -- $189,206
Nils -- $109,708
O'Neill -- $68,808
Patagonia -- $149,584
Performance Sports Apparel -- $85,036
Rossignol -- $486,234
Royal Robbins -- $342,347
Salomon -- $1,466,515
Dynastar -- $368,063
UTC Sports -- $74,878
In addition to those companies listed above, there are more than 300 smaller companies in line for money on the unsecured creditors list filed with the court. Of all the creditors, however, first in line for payment is Cardinal, as that loan is fully secured and includes all personal property and bank accounts of the debtor. Insiders tell us that Any Mountain owner Bud Hoffman has signed personal guarantees as well, which would leave him at risk of losing everything should this Ch. 11 be pushed into a Ch. 7 liquidation.
As we reported in November 2003, Hoffman came very near to being forced to shut down, as his loan and security agreement with General Electric Credit Corp. (GE) was being called and he was in danger of not making payroll. Despite rumors that Any Mountain would be shutting down, Cardinal (run by Steve Crisafulli, former CEO of Marmot) stepped in. Crisafulli told us then the intention was to be a fully-secured, short-term lender to take GE out of the equation and "allow Bud the breathing room he needed to bring goods into the stores, make payroll and start making money once again."
The breathing room didn't help, it appears, as Hoffman failed to make payments on the loan from Cardinal, forcing Cardinal to have to call in the note and make the move to seize Any Mountain's assets. Within hours of being served with the letter informing it that Cardinal was taking control of Any Mountain's bank accounts, Any Mountain filed for Ch. 11 protection.
Any Mountain, which operates eight stores in the San Francisco Bay area, has been owned by Hoffman since he founded the company in 1972. This is not the first time Hoffman has flirted with financial difficulties. Insiders tell us he has been through three composition agreements, which can be a precursor to a bankruptcy filing, although this is his first bankruptcy. Interview notes from our files in the mid-90s indicate that Hoffman himself thought about filing for bankruptcy then, but managed to wiggle out by selling off personal property and restructuring debt.
We spoke with a number of Any Mountain's larger vendors, and each one said the company felt Any Mountain had certainly taken maximum advantage of the bankruptcy filing. Several had just released goods that had been on hold. One vendor even told us that the company had received an urgent call from Any Mountain right after Christmas for goods, with a promise to bring a check when the retailer came to take delivery. As the vendor was negotiating with Any Mountain to apply some of the check to outstanding indebtedness and still allow the retailer to pick up new product, albeit less product than the retailer originally wanted, the vendor learned of the bankruptcy filing. Needless to say, no money or goods subsequently changed hands.
Hoffman did not respond to an email sent by SNEWSÂ® seeking comment.
SNEWSÂ® View: Insiders close to Any Mountain told us last year they estimated the company was doing about $20 million in business. There is not much any of the unsecured vendors can do but wait. On average, experts tell us, if a retailer manages to successfully restructure and reorganize under Ch. 11 bankruptcy protection, unsecured vendors can hope to gain up to $0.40 on the dollar -- sometimes even more over the long term. However, if a company is forced into a Ch. 7 liquidation, as some experts surmised is a real possibility with Any Mountain, an unsecured vendor would be lucky to realize $0.10 on the dollar. More commonly, creditors in Ch. 7 cases simply have to write off the loss. How did things get so bad that vendors would allow a retailer, with a track record of late payments, to get so far out on payments and credit terms and yet still continue to ship? Consider that the West Coast, especially Northern California, is becoming a very stark retail landscape for vendors; Any Mountain therefore represents a very important retail chain. Add the failure and struggles of other western retailers, including the recent disappearing act of Powder Edge in Hawaii, and you have a climate where vendors are going to be even more willing to work with a retailer to keep it afloat. However, given Any Mountain's history and troubles, especially over the last two years, and it is unlikely Hoffman is going to be given much latitude.
We would surmise that one of the nails in the coffin was a result of the retailer's apparent inability to effectively advertise in the last year. We know that media, especially newspapers, will only accept advertisements from a customer if all past debts have also been paid in full. No advertising means less traffic. Combine that with fewer key goods in the store over the important holiday selling months, which results in fewer revenues while expenses remain constant. Â
As for Any Mountain's future, we'd hate to see Any Mountain be forced into a Ch. 7. No one would win in that scenario. Hoffman has to realize time is running out, though. Without the ability to restock his stores with new goods, and without a bank to finance him, once April rolls around, there will be no more wiggle room. No income, no payroll, no business. If we were placing bets, we'd say that there is a strong likelihood that Hoffman is going to sell, and probably has a buyer or investor in the works. Any Mountain stores certainly offer a valuable opportunity for someone with strong retail and business management skills.