Mr Cornelius Vander Starr founded AIG in Shanghai in 1919. In 1946 bought property in Stowe and by acquiring disparate interests in the Stowe area created the Mt Mansfield Company. Mr Starr’s AIG company was a private company. He could do any thing he liked. Mr Starr was introduced to the prospective resort as an investment.
In 1969 Hank Greenberg was personally selected by Mr Starr to take the helm of AIG. Mr Starr passed soon there after. In 1970 AIG went public.
In 1970 from the estate of CV Starr AIG acquired the Mt Mansfield Company. A strange and odd acquisition for a publicly traded company. In its defense public companies did lavish a whole host of perks on there executives in that era. IBM owned a golf course for example. And historically the “company town” offered employees recreational facilities.
Mr Greenberg of course was enamored of everything Stowe, and many AIG executives have homes in Stowe. Mr Greenberg was obviously enamoured of everything Starr too. Since being “removed” from AIG front office in 2005 following an accounting scandal that required the payment of a $1.6 billion fine, ( that’s a big fine!)…Mr Greenberg went on to start C V Starr an insurance company.
Back to Stowe.
Mr Greenberg is a famously competitive person, combative would describe him well. Skiing was a passion. So in the early 2000’s after much consent from Vermont Governement an ambitious expansion for Stowe was planned. It seems from what I’ve read that Mr Greenberg was very involved. Planning a $400 million expansion with AIG’s money. $200m has been spent and the balance is in offering.
AIG is/was a trillion dollar balance sheet company. AIG gives no mention in its Public filings to Mt Mansfield Company in its annual report. In AIG's most recent annual report The word "Stowe" is not to be found and there's only a single line in the SEC filing that reveals the insurer's 100% ownership of Mt. Mansfield Company--the official corporate name of the ski resort.There is no breakdown on its balance sheet, no sales figures no nothing. The estimated taxable sales at Mt Mansfield Company are $40m.
So what’s a company with a trillion dollar balance sheet, once the 18th largest corporation in the world doing with a ski resort? Is this a personal boondoggle? The private playground of a former CEO?
The company has to wind out positions and divest itself of assets.
The Mt Mansfield Company is clearly on the offering block. It will only sell at a big discount to current investment in this climate. Who is in the hunt? Mr Greenberg himself.
According to estimates that I’ve read the Mt Mansfield Company might bring $85-125million. Considering over $200m has been spent in the last few years on expansion backed by AIG…that seems a good deal.
According to an article in the “Stowe Reporter” Mr Greenberg has plenty of available funds as he hedged his considerable AIG stock with many market participants in PVF’s Prepaid Variable Forward Contract. These trades mean that he has realized the value of AIG stock as of a past date, in this case back in 2005. Guess what, a major make out for Mr Greenberg, and several hundred million dollar losses for among others Citibank and Credit Suisse.
Support in Stowe for AIG and Mr Greenberg appears to run high. Of course why wouldn’t it. AIG’s involvement has meant an extremely deep pocketed investor in a small town in Northern Vermont. The personal endorsement and “plaything” of as powerful CEO as Mr Greenberg makes it a sacrosanct project within the larger Corporation.
What will happen? The Mt Mansfield Corporation will be sold, and based on what I’ve read and heard Mr Greenberg will be involved. Who else in today’s economic climate would invest in a ski resort in Vermont?
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