`Lifetime' season ski pass holders lose Killington lawsuit

[Puck it]

There are multiple sets of these passes, some with I believe unlimited transfers, others with 1 transfer.

Just wondering, because I know some people have sold them.

 

[legalskier]

There is legal precedent where asset sales to dodge liabilities have been disallowed when the only purpose of the asset sale was to dodge the liability. It happened in the asbestos cases and in toxic waste cases. Killington as KSRP is the same business as it was as Killinngton, LTD and Sherburne Corp. Same name. Same employees. Same customers.

The plaintiffs' lawyers in all likelihood explored this possibility, and the court appears to have "headed this issue off at the pass," as the article states:
In her decision, Reiss also found no breach of good faith or fair dealing on the part of the former owners and operators of the resort.

What I'm wondering is whether Powdr will go after the passholders who've been skiing there "for free" since 2007, when Powdr took over, now that the court ruled it wasn't obligated to honor them. Probably not, as the bad PR would compound even more, not only from this but also from the fact that they can't spell "powder."

 

[Geoff]

The plaintiffs' lawyers in all likelihood explored this possibility, and the court appears to have "headed this issue off at the pass," as the article states:
In her decision, Reiss also found no breach of good faith or fair dealing on the part of the former owners and operators of the resort.

What I'm wondering is whether Powdr will go after the passholders who've been skiing there "for free" since 2007, when Powdr took over, now that the court ruled it wasn't obligated to honor them. Probably not, as the bad PR would compound even more, not only from this but also from the fact that they can't spell "powder."

Yeah, well... Christina Reiss isn't exactly a seasoned judge. She's only been a Federal judge for 9 months.

 

[riverc0il]

A lot of folks pipping in with opinion not based on legal expertise but rather emotional response to a situation that does not seem or feel right. Seems to me that a judge that is an expert in business law ruled on the case.

Folks, like them or not, the laws are there and our society functions for better or worse based on them. Sometimes we just see the overt occasional problem with business law but we don't see all the protections that DO protect the consumer. Had the situation been different, the same law could be used to enforce protection of the lifetime pass holders. Based on how the business deals were done, that is not the case. And laws that benefit business ultimately generally do benefit the consumer in the long run because they allow businesses to operate most efficiently otherwise innovations, progress, and services could be hindered. It just sounds like a case of counting the hits and ignoring the misses here... I bet in other situations in other industries, most folks on here would not bat an eye... especially if they were not so personally effected.

Feel free to argue that the law should be changed to better protect the consumer. But I am surprised so many people claim to know more about the law than a Federal Judge (9 months or 9 years, it takes some experience and expertise to become a Federal Judge).

 

[thetrailboss]

Yeah, well... Christina Reiss isn't exactly a seasoned judge. She's only been a Federal judge for 9 months.

It takes a lot of experience to be named to the federal bench. It is a very respected position. Sorry that your side did not win. From what I saw, it was a difficult case. Maybe something was gained from it other than a legal win.

 

[threecy]

Feel free to argue that the law should be changed to better protect the consumer.

Other than the folks who bought the passes second hand, there really aren't any consumers. These passes were given as a bonus to stockholders. They invested in Sherburne Corporation and were given free skiing for life as a perk. The Sherburne Corporation has been gone for about a quarter of a century. The closest thing still in existence would be Oak Hill Capital Partners, who became principal owners in ASC toward the end of its history.

 

[dmc]

As a seeker of truth yourself dmc, I would think you would agree on that. Lets see what some other judges have to say if and when this goes higher... (of course I'm looking at this through my glasses, being a passholder and part of this suit)

Pretty much why I wanted to hear your opinion.. Looking for a different side to the story...

Havent made up my mind on this 100% - not that it matters cause I'm just an observer.

 

[Geoff]

It takes a lot of experience to be named to the federal bench. It is a very respected position. Sorry that your side did not win. From what I saw, it was a difficult case. Maybe something was gained from it other than a legal win.

Yeah. It sure takes a lot. ...of political connections.

 

[SkiDork]

Pretty much why I wanted to hear your opinion.. Looking for a different side to the story...

Havent made up my mind on this 100% - not that it matters cause I'm just an observer.

like rivercoil said, my opinion is pretty much worth less than beach sand. I'm a complete idiot when it comes to the legal system. Of course I hope the ruling goes in my favor. But either way I'm not leaving Killington.

BTW another factor to consider in the powdr equation as to whether to honor the passes a few posts back, is the fact that out of the 1200 or so, only about 300 were actively being used. Believe it or not.

 

[dmc]

. Of course I hope the ruling goes in my favor. But either way I'm not leaving Killington.

So y'all own the passes?

 

[SkiDork]

So y'all own the passes?

I have 2.

 

[ta&idaho]

I've been following this thread and finally decided to post some thoughts, now that I have read Judge Reiss's opinion:

1. The passes at issue do not grant the right to ski at Killington for the holder's "lifetime." Rather, they are valid "so long as the corporation shall operate in that area [the Killington Basin] under an agreement with the State of Vermont." The "corporation" stopped operating in the area in 2007. The investors might have thought that they were buying "lifetime" passes, but they were wrong.

2. Judge Reiss addressed--and rejected--the argument that the asset sale was essentially a sham (or a "mere continuation") and that the new owners should be obligated to honor the passes.

3. Judge Reiss was a state Judge in Vermont for five years before her nomination to the Federal bench. Before that, she was worked in private practice in Vermont and Maine. She also graduated second in her law school class (in apparent brief lapse of judgment, she left ski country to attend law school at the University of Arizona) and clerked for a judge on the Maine Supreme Judicial Court. She received a well-qualified rating from the American Bar Association, and she was quickly confirmed by the Senate. In my humble (yet professional) opinion, the written opinion in this case is thorough, detailed, and well reasoned. I cannot see any reason to doubt her fairness, competence, or dedication, and I question the motives of those who have.

4. When does ski season start back up?

 

[bobbutts]

Two can play this game.

How about we do what you said, but since you failed to read the small print, me and my friends have to bail you out at our own expense.

I have zero sympathy for the people who bought their passes on the secondary market - they did nothing to invest in the original hill and weren't taking any risk (oh the irony) that Killington would not make it in its early years. I never bought into the rationale for this lawsuit as a reading of the purchase agreement indicated that the lifetime passes weren't quite the only thing held back in the transaction, though it was close.

For all of you chiming in with your "common sense test" answers, they are truly irrelevant in this case. It is a long-established legal precedent that within the context of an asset sale (as opposed to a stock sale), a buyer picks up only the assets and liabilities he/she wants (so long as the seller agrees). It is critically important that these sorts of transactions are part of the landscape b/c businesses and subsidiaries aren't always (in fact, are quite rarely) structured in a way that makes a sale of their stock to another party possible or feasible. For example, if Target wants to sell 5 stores to Wal-Mart, those stores may be part of the parent holding company and not separate legal entities. Should Target's only option be to sell the whole company or not do the deal at all? Of course not.

The fact that the judge dismissed the lawsuit before it even came to trial is a pretty good indication that the passholders should save their money and give up the ghost. The % of cases where the plaintiff wins on appeal after being dismissed at a lower level isn't high.

I don't have an argument against the legal decision.

And the duration between when these lifetime passes were created and distributed and now is long enough to pass the common sense test that there weren't a scam, which I think is the biggest difference between this case and my example.

The part where we really differ is your lack of sympathy for those affected. In my utopia if something says lifetime it means lifetime, and you can trust a deal on a handshake rather than detailed legal analysis. Reality is buyer beware.

I also just like to bag on Killington at every opportunity.

 

[Tin Woodsman]

I don't have an argument against the legal decision.

And the duration between when these lifetime passes were created and distributed and now is long enough to pass the common sense test that there weren't a scam, which I think is the biggest difference between this case and my example.

The part where we really differ is your lack of sympathy for those affected. In my utopia if something says lifetime it means lifetime, and you can trust a deal on a handshake rather than detailed legal analysis. Reality is buyer beware.

I also just like to bag on Killington at every opportunity.

I have no sympathy for those who bought the pass on the second market - buyer beware, as you said.

Perhaps I should rephrase, actually. I have some sympathy for those folks b/c they paid money and thought they'd be receiving a service. To have that taken away after shelling out thousands of dollars really does suck. Much of that sympathy evaporated, however, when they decided to bring this issue to court on what always appeared to me as a shaky legal basis, at best. Take your medicine for not reading the fine print, shut up and go home.

 

[dmc]

The part where we really differ is your lack of sympathy for those affected. In my utopia if something says lifetime it means lifetime, and you can trust a deal on a handshake rather than detailed legal analysis. Reality is buyer beware.

Who's lifetime? What lifetime?
the lifetime of the person that bought it?
The lifetime of the corporation that sold it?
The geological lifetime of the mountain?

I'm not really sure how the contract defines "lifetime"

 

[skiadikt]

I have no sympathy for those who bought the pass on the second market - buyer beware, as you said.

Perhaps I should rephrase, actually. I have some sympathy for those folks b/c they paid money and thought they'd be receiving a service. To have that taken away after shelling out thousands of dollars really does suck. Much of that sympathy evaporated, however, when they decided to bring this issue to court on what always appeared to me as a shaky legal basis, at best. Take your medicine for not reading the fine print, shut up and go home.

i do think some folks might have been lulled in by the fact that in previous sale from ski to asc, the passes were honored so there was every reason to think that would be the case in the sale from asc to powdr. also if you bought 7 or 8 yrs ago, it might not have not evident that asc was gonna have to sell the place. i'd be curious if any of this was a consideration when skidork purchased his passes.

in my case until the cheap asc passes reared their ugly head, on a seasonal basis, i almost always bought a bond pass as they were cheaper than a pass purchased from the mtn. at one point i even considered buying a lifetime pass. guess fortunately i didn't ...

i know a couple of long time access rd business owners (25+yrs) who obviously are not w/ happy with the situation. unfortunately for powdr/ksrp, some of these town people are the very people who need to approve or are influential in the approval of the proposed village. so in the long run, they may just be messing with the wrong people.

 

[threecy]

unfortunately for powdr/ksrp, some of these town people are the very people who need to approve or are influential in the approval of the proposed village. so in the long run, they may just be messing with the wrong people.

But on the flip side, if people drag down SP/Powdr, then it'll affect the working/business owning locals, so perhaps they'll realize they're messing with the wrong people.

 

[Groundskeeper Willie]

wow....its really NOT that complicated...

Who's lifetime? What lifetime?
the lifetime of the person that bought it?
The lifetime of the corporation that sold it?
The geological lifetime of the mountain?

I'm not really sure how the contract defines "lifetime"

the language WAS and IS there...for any and all to peruse....and the ruling justice on the matter saw it to be CRYSTAL clear. The subsequent string of owners were under ZERO obligation to maintain/honor the covenants of the ORIGINAL bond passes....that they CHOSE to do so was out of...shall you say?...benevolence...nothing more. The passes were for the LIFETIME of the ISSUEING company...NOT of the pass holder. The company went kaput...and so to do the passes. End of the book. It has ZERO to do with waxing hypothetical about "did the passholder get their monies worth" or some other argumentative path. The company ENDED. So too do the passes. Hon Reiss saw it to be as CRYSTAL clear as it could be....and these piss 'n moaners will now embark on a discussion streak of " is she a seasoned judge" ETC..........TAKE YER BALL AND GLOVE AND GO HOME. You LOST. :sad:

 

[threecy]

the language WAS and IS there...for any and all to peruse....and the ruling justice on the matter saw it to be CRYSTAL clear. The subsequent string of owners were under ZERO obligation to maintain/honor the covenants of the ORIGINAL bond passes....that they CHOSE to do so was out of...shall you say?...benevolence...nothing more. The passes were for the LIFETIME of the ISSUEING company...NOT of the pass holder. The company went kaput...and so to do the passes. End of the book. It has ZERO to do with waxing hypothetical about "did the passholder get their monies worth" or some other argumentative path. The company ENDED. So too do the passes. Hon Reiss saw it to be as CRYSTAL clear as it could be

SP/Powdr had nothing to do with the demise of Sherburne Corporation, S-K-I Ltd., or ASC. The original passholders owned a company that eventually went belly up. SP/Powdr shouldn't have to do anything for the shareholders of a dead corporation that they didn't purchase liabilities from. Based upon everything I've seen, this was a good decision by the court.

 

[Groundskeeper Willie]

SP/Powdr had nothing to do with the demise of Sherburne Corporation, S-K-I Ltd., or ASC. The original passholders owned a company that eventually went belly up. SP/Powdr shouldn't have to do anything for the shareholders of a dead corporation that they didn't purchase liabilities from. Based upon everything I've seen, this was a good decision by the court.

Company went belly-up?.End of passes. Company gets sold?...changes corporate charter? SAME THING!....all these pass/bondholders TRIED to have the courts believe that there was some ambiguity in the wording of the pass issuance. There WASNT......and the courts made it quick and decisive......next thing you know , these tubesteaks will take their defunct S&H Greenstamps to hannafords and lay claim that since this ONCE WAS an A&P grocery store...sheeshhhh...