Park City/Talisker-Vail Lawsuit

VTKilarney · Sep 5, 2014

thetrailboss said:
I would not think that they would have $17.5 mill just lying around....

If they haven't made arrangements in anticipation of the judge's ruling they are incompetent. I suppose their hesitation could also be a sign that a deal really is in the works and that they just need time to put the finishes touches on it. For all we know there was an agreement in principle and the parties stipulated that the judge's ruling would be irrelevant.

thetrailboss · Sep 5, 2014

VTKilarney said:
If they haven't made arrangements in anticipation of the judge's ruling they are incompetent. I suppose their hesitation could also be a sign that a deal really is in the works and that they just need time to put the finishes touches on it. For all we know there was an agreement in principle and the parties stipulated that the judge's ruling would be irrelevant.

I don't know. Seeing how much in denial POWDR has been makes me think that they really don't have their ducks in a row.

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mister moose · Sep 5, 2014

thetrailboss said:
I would not think that they would have $17.5 mill just lying around....

The bond was set at $17.5 cash or surety. Surety bonds are common, and are purchased from insurance companies for pennies on the dollar, if you have the balance sheet to support it. You don't need the cash.

steamboat1 · Sep 6, 2014

Highway Star said:
This $36.5M figure compares directly to my guess of $200M to $300M Vail was asking for in their docs, actual $201M that Vail was asking for in their docs, $125M Vail asked for in court, and $1M to $7M POWDR asked for.

You're an idiot....:grin:

VTKilarney · Sep 6, 2014

mister moose said:
The bond was set at $17.5 cash or surety. Surety bonds are common, and are purchased from insurance companies for pennies on the dollar, if you have the balance sheet to support it. You don't need the cash.

Surety bonds for appeals are not nearly as cheap as people assume. The odds of prevailing on a appeal are extremely poor and the bond companies know it. The standard requirement is 100% collateral - although very high net worth corporations can sometimes pay less. If land is used as collateral it can not be the subject of the dispute and many bond companies require that there be no other liens on the land.

marcski · Sep 6, 2014

VTKilarney said:
If they haven't made arrangements in anticipation of the judge's ruling they are incompetent. I suppose their hesitation could also be a sign that a deal really is in the works and that they just need time to put the finishes touches on it. For all we know there was an agreement in principle and the parties stipulated that the judge's ruling would be irrelevant.

Dude.....they forgot to mail a letter that would have let them continue paying 150K/year for one of the most profitable resorts in the country. YES, they are incompetent. Period.

Highway Star · Sep 6, 2014

marcski said:
Dude.....they forgot to mail a letter that would have let them continue paying 150K/year for one of the most profitable resorts in the country. YES, they are incompetent. Period.

They also ran Killington worse than a bankrupt ASC.

Highway Star · Sep 6, 2014

Here's another spin on it - why doesn't Cumming just cut a deal, or is he holding out to try to leverage the best deal possible? Short of entirely selling out, the only way he's going to make good money on this, with minimal headache, is leasing the business to Vail or selling them a stake of the business.

Vail could lease the PCMR business and lower land from Cumming for a pretty big figure. Say $30M yearly plus inflation and a percentage of profits above a certain level. More than enough to cover existing debts, and a nice tidy profit with no overhead. PCMR combines with the Canyons, skier visits increase 20%, Vail rakes in the cash and Cumming gets a cut.

Or Cumming could sell Vail partial ownership of the PCMR business/land, say 49% or 51%, depends if Vail insists on a controlling interest. Cumming pays off his debts on PCMR or other POWDR resorts, and pockets the rest or plows it into the other resorts. Still has a nice tidy income every year, and Vail has to deal with running the resort.

Or he could sell a minority or a controlling interest in all of POWDR, and Vail becomes the resort operator. Vail greatly expands and diversifies its portfolio, Cumming gets to settle most of his debts, revenues increase across the board, and Cumming would probably increase his yearly income off the whole deal overall, while still owning a ski resort company. This of course would be the best deal for Killington, LOL.

AdironRider · Sep 6, 2014

We all get you have a serious axe to grind with Powdr, but ultimately, the humorous part is you think Vail would be a better option.

I'm guessing they know Canyons is bad juju and just need to wait for Vail to cut bait and leave. They have two years they can operate, then even if evicted Vail is going to need 100 million to rebuild Canyons between lifts, work arounds for access (the two alternative points are through a million+ entry level neighborhood with an HOA (good luck) or another piece with serious grade issues.

Water rights will be a 7 year battle at minimum if they want to continue the hostile takeover route.

Or they can rent out the base for 30 mill like HS suggests and end up paying 55 million a year before making a dime for the most absurd ski lease in the world.

MTN stockholders aren't going to sit around and wait for 5 years plus for this to pay off for them. My bet is in 3 years Vail says fuck it and walks.

This would be my thinking if I were Cummings.

abc · Sep 6, 2014

But does Vail has to do anything? If PCMR stops operating, the skiers will have to go somewhere, some of them will bound to go over t Canyons.

AdironRider · Sep 6, 2014

Yeah locals maybe.

Otherwise the tourists, aka the ones that actually drive profit for resorts, will most likely be heading to Tahoe, California, or Jackson.

thetrailboss · Sep 6, 2014

Honestly PCMR has a bigger draw than Canyons. Surprisingly, Canyons has something like HALF as many ski visits as PCMR. It's in large part because PCMR has the town while Canyons has a fake town. I find both confusing as hell to navigate. Canyons has always been the ugly stepchild of the PC resorts. It's just Talisker dumped a lot of money into making it better (and it is a lot better). But it will never be the same as Park City or even Deer Valley.

steamboat1 · Sep 9, 2014

POWDR agreed to pay the bond.

ss20 · Sep 9, 2014

17.5 million is crazy.

ScottySkis · Sep 9, 2014

ss20 said:
17.5 million is crazy.

Park City Mountain Resort will be open for the 2014-2015 winter ski season! PCMR has announced that it will pay the $17.5 million bond required to keep the resort open for the 2014-15 ski season.

marcski · Sep 9, 2014

ss20 said:
17.5 million is crazy.

Why? I don't think they've paid a dime in rent for the leased lands in 3 years.

thetrailboss · Sep 9, 2014

ss20 said:
17.5 million is crazy.

I think a lease for $150k for that land is crazy....

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ss20 · Sep 9, 2014

marcski said:
Why? I don't think they've paid a dime in rent for the leased lands in 3 years.

It's crazy because...

1. It's only a temporary fix (a 17.5 million dollar fix)
2. They will never recoup that money in one season.
3. That's 17 million dollars that could've been an investment. You could have 4 new Snowdon Quads with that money.

It's like buying new windows on a house that you can't pay taxes for and will soon be owned by the bank.

marcski · Sep 9, 2014

They are going to owe the money. The bond will be offset against the future judgment from the lawsuit.

skiNEwhere · Sep 9, 2014

thetrailboss said:
I think a lease for $150k for that land is crazy....

How is that crazy? At less than $50 an acre that's a bargain

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