Creditors Force Liftopia into Bankruptcy

[JimG.]

Eastern powder baby, didn’t think of this angle, but you could be right, liftopia potentially going belly up hurts a lot of small ski areas since liftopia did a lot of the online work for these small ski areas, it’s a kick to the gut for them.

Exactly why I said prices will be going up...step 2 of the megapass playbook is to drive the small guys out of business.

 

[Cobbold]

Exactly why I said prices will be going up...step 2 of the megapass playbook is to drive the small guys out of business.

Wonder if this helps the Indy pass group, by allowing them to take over the web/online presence of the independents, the side benefit is they go onto the Indy pass.

My guess in a few years just about everybody will be on some kind of super pass, whether it’s, epic, ikon, mountain collective, indypass and future passes

 

[thetrailboss]

Wonder if this helps the Indy pass group, by allowing them to take over the web/online presence of the independents, the side benefit is they go onto the Indy pass.

My guess in a few years just about everybody will be on some kind of super pass, whether it’s, epic, ikon, mountain collective, indypass and future passes

Again, Liftopia is staying in business. They’re planning on reorganization. It’s just the creditors want their money.


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[BenedictGomez]

EPIC & IKON are primarily to blame for the cost of skiing increasing for the masses. Those here who disagree with this (repeatedly) do so because they are not, "the masses", but fervent SPH skiers, and can't separate their personal experience from that of the average skier as defined by NSAA data.

 

[EPB]

Again, Liftopia is staying in business. They’re planning on reorganization. It’s just the creditors want their money.


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I believe TB is a lawyer (could be wrong), if so, I'll defer to him on the finer points.

That said, this is Chapter 11 which means Liftopia's management will continue to operate the business during bankruptcy. That said, operations become more challenging as the court appointed trustee now oversees business dealings and management's focus shifts from being focused on ownership's best interest exclusively to the best interest of all parties. In short, they're under a different level of scrutiny now. Also bear in mind that vendors, etc. are now less likely to want to do business with Liftopia now that they are in bankruptcy (perceived higher likelihood of not being paid in full for services rendered).

While it's impossible to know from Aspen's perspective, the case could later switch to Chaper 7 (liquidation) if no better alternative is found. As I recall, another party cannot force a debtor directly into Chapter 7. It is somewhat unlikely creditors think this goes full liquidation assuming Liftopia's business model makes sense in a non-COVID environment.

Forcing another party into bankruptcy is generally considered an aggressive move, so the fact that Aspen and others (who certainly compete with Liftopia) are doing this in the middle of a liquidity crunch is suspicious at best. I'm sure they would all want their money they feel is owed to them, but this is unlikely to be a quick or cheap endeavor (so "I need my money from liftopia so I can turn and and pay my creditors next month" is an unlikely motivation). Hence why I think this could be strategic.

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[Cobbold]

I believe TB is a lawyer (could be wrong), if so, I'll defer to him on the finer points.

That said, this is Chapter 11 which means Liftopia's management will continue to operate the business during bankruptcy. That said, operations become more challenging as the court appointed trustee now oversees business dealings and management's focus shifts from being focused on ownership's best interest exclusively to the best interest of all parties. In short, they're under a different level of scrutiny now. Also bear in mind that vendors, etc. are now less likely to want to do business with Liftopia now that they are in bankruptcy (perceived higher likelihood of not being paid in full for services rendered).

While it's impossible to know from Aspen's perspective, the case could later switch to Chaper 7 (liquidation) if no better alternative is found. As I recall, another party cannot force a debtor directly into Chapter 7. It is somewhat unlikely creditors think this goes full liquidation assuming Liftopia's business model makes sense in a non-COVID environment.

Forcing another party into bankruptcy is generally considered an aggressive move, so the fact that Aspen and others (who certainly compete with Liftopia) are doing this in the middle of a liquidity crunch is suspicious at best. I'm sure they would all want their money they feel is owed to them, but this is unlikely to be a quick or cheap endeavor (so "I need my money from liftopia so I can turn and and pay my creditors next month" is an unlikely motivation). Hence why I think this could be strategic.

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Eastern powder baby,

I think you are spot on, also think this is a tremendous opportunity for the Indy pass people as well as Indy pass holders, time will tell, originally I thought it was liquidity issue at alterra but your analysis is the correct one. Depending on how this virus thing goes, all four of the big four may face liquidty problems this winter/spring, not sure about powder Corp, but the other three have large loans out.

 

[cdskier]

Eastern powder baby,

I think you are spot on, also think this is a tremendous opportunity for the Indy pass people as well as Indy pass holders, time will tell, originally I thought it was liquidity issue at alterra but your analysis is the correct one. Depending on how this virus thing goes, all four of the big four may face liquidty problems this winter/spring, not sure about powder Corp, but the other three have large loans out.

Another reason an Alterra liquidity issue doesn't make much sense is that they're only owed 64K per the filing. For a small company/ski area that might be a lot of money, but for one of Alterra's size I can't see that being a make or break type of deal. That's less than 100 Ikon passes that they need to sell to generate that much money. Aspen on the other hand is owed 2.4M. That's a sizeable chunk of money to be owed. Even A-Basin is owed 176K.

 

[thetrailboss]

Another reason an Alterra liquidity issue doesn't make much sense is that they're only owed 64K per the filing. For a small company/ski area that might be a lot of money, but for one of Alterra's size I can't see that being a make or break type of deal. That's less than 100 Ikon passes that they need to sell to generate that much money. Aspen on the other hand is owed 2.4M. That's a sizeable chunk of money to be owed. Even A-Basin is owed 176K.

I wonder if these are Mountain Collective Resorts who never got their $$$ back.

 

[Smellytele]

If they are owed money then they were working together they weren’t competitive. Why would they try to put them out of business if they went into the agreement knowing Liftopia would be selling the tickets at a discount?


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[EPB]

If they are owed money then they were working together they weren’t competitive. Why would they try to put them out of business if they went into the agreement knowing Liftopia would be selling the tickets at a discount?


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I get the spirit of this, and I actually think the creditors will clutch their pearls if accused of being sharks in the water.

That said, there are countless examples of being customer and competitor at the same time. The simplest example I can think of this are grocers that carry brand names and private label simultaneously. My Wegmans sells Wegmans cheese and Cabot next to another. They are a customer AND competitor with Cabot.

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[ScottySkis]

I get the spirit of this, and I actually think the creditors will clutch their pearls if accused of being sharks in the water.

That said, there are countless examples of being customer and competitor at the same time. The simplest example I can think of this are grocers that carry brand names and private label simultaneously. My Wegmans sells Wegmans cheese and Cabot next to another. They are a customer AND competitor with Cabot.

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Sometimes those brand name make the generic cheaper food items

 

[EPB]

Sometimes those brand name make the generic cheaper food items

100%. Makes the customer-supplier relationship even more fluid in this case. Love the Platty updates, BTW.

That said Aspen/Alterra is without question a client of Liftopia. I wouldn't be surprised if Liftopia's presence is more of a hindrance to Aspen/Alterra at this point though.

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[dblskifanatic]

EPIC & IKON are primarily to blame for the cost of skiing increasing for the masses. Those here who disagree with this (repeatedly) do so because they are not, "the masses", but fervent SPH skiers, and can't separate their personal experience from that of the average skier as defined by NSAA data.

I would like to understand your perspective on this! My cost per day skiing has never been lower than it has been since I have skied Epic. And the season passes at many Colorado ski areas are very reasonable - cheaper than Pats Peak or Magic and other independents. Not doubting , just curious.


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[Killingtime]

I would like to understand your perspective on this! My cost per day skiing has never been lower than it has been since I have skied Epic. And the season passes at many Colorado ski areas are very reasonable - cheaper than Pats Peak or Magic and other independents. Not doubting , just curious.


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He's probably talking about the price of a walk-up day pass for the person who skis a few times per year, which has been on a steady upward trajectory. I'm not sure how much of that can be attributed to mega passes versus the increasing cost of operating a ski resort such as insurance, taxes, energy and labor. Seems that most places are pushing $100 now for a day pass. It pays to do some research for discounted tickets but believe it or not some people are just not aware that deals are out there especially if they are new to the sport.

 

[BenedictGomez]

He's probably talking about the price of a walk-up day pass for the person who skis a few times per year, which has been on a steady upward trajectory.

Correct. I thought I made it clear, but upon
reading my post again I have no idea why i assumed everyone would be familiar with the gleanings of NSAA data.

 

[fbrissette]

He's probably talking about the price of a walk-up day pass for the person who skis a few times per year, which has been on a steady upward trajectory. I'm not sure how much of that can be attributed to mega passes versus the increasing cost of operating a ski resort such as insurance, taxes, energy and labor. Seems that most places are pushing $100 now for a day pass. It pays to do some research for discounted tickets but believe it or not some people are just not aware that deals are out there especially if they are new to the sport.

The ski industry is clearly steering customers toward seasons passes. Not that long ago, you needed to ski 20 to 25 days for a season pass to be worth it. This number of days has steadily decreased to around 8-10 days for most season passes since walk up day passes have increased so dramatically. Nowadays you need to have a lot more money or be a good bargain hunter if you want to ski without a season pass (or mega pass such as Ikon or Epic).

 

[Killingtime]

Correct. I thought I made it clear, but upon
reading my post again I have no idea why i assumed everyone would be familiar with the gleanings of NSAA data.

No problem BG. I have a buddy who put together a last minute 4 day trip to Killington last year with his wife and three kids. He is a two to three times a year skier who will never buy a pass. No discounted lift tickets. With lodging, lift tickets, food and misc expenses he spent over $3,000 to ski in crowded, crappy conditions. Not the ski resorts fault but yeah, its expensive for people who haven figured out how to shave a few dollars off here and there.

 

[ss20]

No problem BG. I have a buddy who put together a last minute 4 day trip to Killington last year with his wife and three kids. He is a two to three times a year skier who will never buy a pass. No discounted lift tickets. With lodging, lift tickets, food and misc expenses he spent over $3,000 to ski in crowded, crappy conditions. Not the ski resorts fault but yeah, its expensive for people who haven figured out how to shave a few dollars off here and there.

....and Killington has become one of the least expensive major-players in Vermont...

That still means buying a lift ticket for a Saturday two weeks away will cost you $90-100. I think only Jay is more reasonable than that for large resorts in Vermont. Okemo, Mount Snow, Sugarbush, Stowe will all be asking for over $100. Oddly enough now I believe Stratton's online advance rate is below that of the majority.

 

[Cobbold]

No problem BG. I have a buddy who put together a last minute 4 day trip to Killington last year with his wife and three kids. He is a two to three times a year skier who will never buy a pass. No discounted lift tickets. With lodging, lift tickets, food and misc expenses he spent over $3,000 to ski in crowded, crappy conditions. Not the ski resorts fault but yeah, its expensive for people who haven figured out how to shave a few dollars off here and there.

I love guys like that, that’s how major ski areas can afford to upgrade their snowmaking, groomers, put high speed six packs in, yes yes I love people like them.

 

[Cobbold]

According to Doug fish of the Indy pass, non pass holders on average ski 4 days a year, if Bretton woods and or Waterville valley join the Indy pass, for most people 2 days at cannon and Bretton woods or Waterville valley makes for a pretty inexpensive Trip to New Hampshire, if jay Peak joins, 2 days at jay and two at Bolton valley is pretty decent too, in my opinion, my opinion and twenty bucks gets you a small coffee at Starbucks, lol