DEBT AND LETTER OF CREDIT

12 Months Ended

Oct. 31, 2013

Debt And Letter Of Credit

DEBT AND LETTER OF CREDIT

6.  DEBT AND LETTER OF CREDIT:

Debt as of October 31, 2013 and 2012 consists of the following:

	10/31/13		10/31/12
Mortgage notes payable to bank, interest fixed at 6.90% payable in monthly installments of $61,769 including interest through Fiscal 2031, secured by certain buildings.	$7,593,013		$7,802,416
Mortgage note payable to bank, interest fixed at 5.59% payable in monthly installments of $44,156 including interest through October 2014, secured by a certain building.	6,608,689		6,759,338
Revolving line of credit payable to bank, interest at the greater of LIBOR plus 3.5% or 5.5% (5.5% at October 31, 2013) payable on demand.  Paid in full in Fiscal 2013.	0	2,221,237
Capital lease obligation payable to bank, interest fixed at 5.23%, payable in 24 installments of $8,682 due April 2011 through September 2014, secured by certain equipment.	49,983	97,425
	$14,251,685	$16,880,416

   The Companies had a $3,100,000 revolving line of credit with Manufacturers and Traders Trust Company (the “Bank”).  During Fiscal 2013 the Companies utilized the proceeds from the sale of three Boulder Lake Village condominiums and two land parcels to repay the outstanding balance on the line of credit and the facility has expired.  The Companies are no longer required to maintain an interest reserve account as security for the payment of interest.  In August 2013, the $6,381 remaining balance of the account was transferred to the depository account and the interest reserve account was closed.

   At October 31, 2012, Blue Ridge had utilized $2,221,237 of its $3,100,000 general line of credit, which was an on demand, revolving line with no maturity date. The general line of credit bore interest at the greater of the overnight LIBOR plus 3.5% or the daily 30-day LIBOR plus 3.5%, with in all cases a minimum interest rate of 5.5% (such interest rate was 5.5% at October 31, 2012).The interest reserve account included in cash held in escrow, had a balance of $107,761 at October 31, 2012.

   The Companies had a $9,000,000 line of credit mortgage with a construction sublimit of $4,400,000 and a site-development sublimit of $4,600,000.  During Fiscal 2012, the Companies utilized proceeds from the sales of nine Boulder Lake Village condominium units, three Laurelwoods II duplex units and the two ski areas to repay $2,585,167 and $2,917,521 on the Construction and Site Development sublimits, respectively.  The remaining balance outstanding of $653,964 was transferred to the general line of credit in an effort to consolidate the debt.  At October 31, 2012, the Companies had $0 outstanding on the $9,000,000 line of credit and the facility has expired.  During Fiscal 2012, the line bore interest at the greater of overnight LIBOR plus 3.5% or the daily 30-day LIBOR plus 3.5%, in all cases at a minimum interest rate of 5.5%.

     The weighted average short term borrowings and interest rate for the year ended October 31, 2013 were $1,482,000 and 5.50%, respectively.  The weighted average interest rate at fiscal year ended October 31, 2013 was 5.50%.  As of October 31, 2013 the Companies have no existing loan agreements with M&T Bank and therefore are no longer required to comply annually with consolidated debt to worth, debt service coverage or tangible net worth ratios.  The Companies had not met the required debt service coverage ratio at October 31, 2012 and had obtained a waiver from the Bank for this covenant.

     The site development sublimit agreement had enabled the Companies to issue letters of credit in amounts up to $4,600,000.  During the fiscal year ended October 31, 2005, or Fiscal 2005, the Bank agreed to issue, on the Companies’ behalf, an irrevocable standby Letter of Credit to Kidder Township for the purpose of guaranteeing, as required by Kidder Township, completion of the infrastructure improvements to the Boulder Lake Village premises.  On September 12, 2005, the letter of credit was issued in the amount of $3,831,594.  As of October 31, 2011, the Companies have utilized $2,628,657 of the site development sublimit and the net balance of the letter of credit was $1,202,937.  On August 22, 2012, the original letter of credit was returned to the Bank and the final amount of $1,202,937 was released by Kidder Township.

     On May 22, 2009, the Companies entered into a Deed of Trust and Security Agreement and Real Estate Lien Note with Barbers Hill Bank totaling $1,050,000.  The agreement encumbered certain real property located in Chambers County, Texas.  The property was leased to Jack in the Box Eastern Division, L.P. during Fiscal 2011 and was subsequently sold.  The note, which had a maturity date of May 22, 2014 and bore interest at a fixed rate of 6.75%, had an outstanding balance of $1,010,384 as of October 31, 2011.  On November 30, 2011, the Companies sold the property in Chambers County, Texas and subsequently repaid in full the outstanding balance under the note of $1,009,002 to Barbers Hill Bank.

     On July 29, 2010 the Companies entered into a Loan Agreement and Term Note with the Bank in the amount of $2,600,000.  The agreement encumbered, among other things, certain real property at Jack Frost Mountain Ski Area and Big Boulder Ski Area and all non-real estate assets of the Companies and was secured by the guaranty of Kimco Realty Corporation, the Companies’ majority shareholder.  The principal amount of the Loan was to be paid in full on July 29, 2011.  Effective as of July 29, 2011, the Companies entered into the Amended and Restated Note with the Bank, which increased the loan by an aggregate of $2,000,000 to $4,600,000 and extended the maturity date of the note from July 29, 2011 to December 31, 2011.  The note bore interest at a rate of one-month LIBOR plus 3.0%. On December 15, 2011, the note was paid in full with the proceeds from the sale of the ski areas.

     The Companies have a capital lease agreement with the Bank for maintenance equipment at Jack Frost National Golf Course.  The capital lease is payable in 24 installments of $8,682 and bears interest at a fixed rate of 5.23%.  The capital lease is due in full in September 2014.

     The aggregate amount of long-term debt maturing in each of the next five years and thereafter ending subsequent to October 31, 2013, is as follows: 2014 - $6,882,990; 2015 - $240,295; 2016 - $257,410; 2017 - $275,744; 2018 - $295,384; thereafter $6,299,862.