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Article in the Times Argus today regarding the former Pico Peak owners and whether money set aside to pay CVP is theirs or not. I am going to paste the article here cause I am not sure how long a link would work.
Power company wins suit against former Pico ski area owners
September 5, 2006
By Tom Mitchell Rutland Herald
The Vermont Supreme Court has upheld a lower court decision awarding Central Vermont Public Service Corp. nearly $215,000 in escrowed funds to pay an electrical debt owed by a former ski area.
The funds were set aside in 1996 to cover a debt incurred by the now-defunct Pico Mountain Ski Area, according to the high court's decision.
In an appeal of the original decision in Chittenden Superior Court about four years ago, Harold and Edith Herbert, former operators of the Pico Mountain Ski Area, argued they were entitled to the funds because CVPS did not qualify for the money under the rules of the bankruptcy agreement.
But the Vermont Supreme Court disagreed with the Herberts and said Chittenden Superior Court was right when it awarded the money to the power company.
In July 1996, Pico Mountain Inc. filed a Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court for the District of Vermont. The company listed no significant assets and substantial unsecured debts including a $214,802 debt for electricity owed to CVPS. The Herberts operated Pico Mountain Ski Area through a series of corporate entities, including Pico Mountain Inc.
As the bankruptcy progressed, the Herberts sold the ski area's assets to American Ski Co. Inc. (ASC), owner of Killington Ski Area, based on the terms of an Oct. 16, 1996, purchase and sale agreement.
A provision of the pact allowed ASC to reduce the purchase price dollar-for-dollar to match amounts needed to meet any liabilities identified by the closing date, the Supreme Court decision said.
The funds in question were set aside at the closing, according to the recent ruling. In a summary judgment, Chittenden Superior Court awarded the funds to CVPS, which had been permitted to intervene in the case.
Another provision of the sale required ASC to create an escrow account, containing funds for discharging liabilities already found in a schedule attached to the agreement.
The schedule did not list the $214,802 owed to CVPS, but the debt was listed in a closing statement signed by the parties, the high court found.
And ASC held in escrow $214,802 from the purchase at the Dec. 9, 1996, closing.
In January 1997, CVPS filed a proof of claim in the bankruptcy proceeding for $226,480, amended later to $286,480.
In that proceeding, a trustee for Pico Mountain Inc. entered into a settlement agreement with the Herberts over an alleged breach of their fiduciary duty toward Pico Mountain Inc.
According to the settlement agreement, the Herberts were supposed to pay $120,000, or roughly 30 percent, of the allowed unsecured claims again Pico Mountain Inc.
Then in May 1997, the trustee asked the bankruptcy court to approve the settlement and enjoin the creditors from bringing actions against the Herberts.
Power company wins suit against former Pico ski area owners
September 5, 2006
By Tom Mitchell Rutland Herald
The Vermont Supreme Court has upheld a lower court decision awarding Central Vermont Public Service Corp. nearly $215,000 in escrowed funds to pay an electrical debt owed by a former ski area.
The funds were set aside in 1996 to cover a debt incurred by the now-defunct Pico Mountain Ski Area, according to the high court's decision.
In an appeal of the original decision in Chittenden Superior Court about four years ago, Harold and Edith Herbert, former operators of the Pico Mountain Ski Area, argued they were entitled to the funds because CVPS did not qualify for the money under the rules of the bankruptcy agreement.
But the Vermont Supreme Court disagreed with the Herberts and said Chittenden Superior Court was right when it awarded the money to the power company.
In July 1996, Pico Mountain Inc. filed a Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court for the District of Vermont. The company listed no significant assets and substantial unsecured debts including a $214,802 debt for electricity owed to CVPS. The Herberts operated Pico Mountain Ski Area through a series of corporate entities, including Pico Mountain Inc.
As the bankruptcy progressed, the Herberts sold the ski area's assets to American Ski Co. Inc. (ASC), owner of Killington Ski Area, based on the terms of an Oct. 16, 1996, purchase and sale agreement.
A provision of the pact allowed ASC to reduce the purchase price dollar-for-dollar to match amounts needed to meet any liabilities identified by the closing date, the Supreme Court decision said.
The funds in question were set aside at the closing, according to the recent ruling. In a summary judgment, Chittenden Superior Court awarded the funds to CVPS, which had been permitted to intervene in the case.
Another provision of the sale required ASC to create an escrow account, containing funds for discharging liabilities already found in a schedule attached to the agreement.
The schedule did not list the $214,802 owed to CVPS, but the debt was listed in a closing statement signed by the parties, the high court found.
And ASC held in escrow $214,802 from the purchase at the Dec. 9, 1996, closing.
In January 1997, CVPS filed a proof of claim in the bankruptcy proceeding for $226,480, amended later to $286,480.
In that proceeding, a trustee for Pico Mountain Inc. entered into a settlement agreement with the Herberts over an alleged breach of their fiduciary duty toward Pico Mountain Inc.
According to the settlement agreement, the Herberts were supposed to pay $120,000, or roughly 30 percent, of the allowed unsecured claims again Pico Mountain Inc.
Then in May 1997, the trustee asked the bankruptcy court to approve the settlement and enjoin the creditors from bringing actions against the Herberts.
