killington cancelling lifetime passes

[nancy2]

"The Pass was a benefit you or your predecessor in interest, received for being an initial investor in Sherburne Corporation during the resorts infancy. The specific language in your stock or bond certificate granted you "a pass entitling the holder to use free all ski lifts operated by the corporation in Killington Basin so long as the [Sherburne] corporation shall operate in that area under the agreement with the State of Vermont." When the resort changes ownership as part of this sale, Killington, LTD will no longer own or operate the lifts at the resort. Thus, ar the time of the transfer of ownership, your Pass will expire and the new Owners have no obligation to honor your pass.

If you are wondering why the rights under your pass survived the last sale of the resort it is because when we acquired Killington, we acquired the stock of Sherburne Corporation's parent (which owned other resorts in addition to Killington) and therefore Sherburne Corporation continued to operate the resort under an agreement with the State of Vermont, unlike in the current contemplated sale, where the new owners are acquiring the assets of the Killington and Pico Ski Resorts."


got this from Killington zone
what a way to start ,new owners!!!!!!!

 

[millerm277]

Well, while I'm sure it will make people unhappy...there is no reason for them to continue the free passes, you invested in a company and were told you got free passes for as long as they owned the resort, now the company you invested in has nothing to do with the resort.

 

[riverc0il]

Makes sense to me, I see no issue here. Stinks for original investors, but something tells me this isn't going to effect many people and those people can probably afford a new season pass. If they are upset, perhaps they will take their business else where. Or perhaps not. In either case, the new owners of Killington are not loosing any money but ending a free lifetime pass option that they did not offer.

Think about this a different way with this example:

If you are buying a rental property in which the previous lease agreement with the renters stipulated that heat and hot water were provided, as the new owner you can change the terms of the new lease agreements if you so wish. New owners should not have to inherit the previous obligations of the previous owners unless stipulated in the sales agreement or any other legally binding document.

Also, bear in mind that this was a free season pass offered in exchange for an investment in a company. Sometimes people make investments and loose, though I suspect compared to the gains over time, the lose of a life time season pass isn't so great. This is business and the way it goes. There isn't much "spirit" in these types of investment deals, IMO.

 

[MikeTrainor]

Think about this a different way with this example:

If you are buying a rental property in which the previous lease agreement with the renters stipulated that heat and hot water were provided, as the new owner you can change the terms of the new lease agreements if you so wish. New owners should not have to inherit the previous obligations of the previous owners unless stipulated in the sales agreement or any other legally binding document.

Yes but think of this example in a different sense. If an office building sells and the tenant has 10 years left on their lease the new company inherits that lease as is for the next 10 years.

I am sure lawyers have looked everything over with this. I wonder why [shurboure] is in parentheses. Was it in the original bond or did it just read "the corporation"? Regardless I am sure there will be lawsuits. Kind of a crappy thing to do though.

 

[thebigo]

I dont understand the legalities but it is fact that ASC honored the lifetime passes when the mountain was purchased from SKI ltd.

Regardless of the legalities I cannot see how this makes any business sense. Think about who owned the lifetime passes: locals and condo owners. The mountain was purchased by a real estate company that NEEDS real estate to stand any chance of a return.

You need the locals approval in order to get the village built, and your first move is to piss them off?

Furthermore condo owners that just had their lifetime passes revoked are far more likely to look elsewhere. This results in increased inventory on the market and subsequently reduced real estate prices. How could a well run real estate company allow their first move to negatively impact real estate prices?

Is there any upside? Can they really make the money back on these people buying day passes? If anything this was a good day for sugarbush and claybrook sales.

 

[dmc]

It was a gamble...
Sometimes you win... Sometimes you lose...

They lost...
A couple of those losers from KChat had it coming via the karma express..
But I feel bad for most that lost on this..

I would never buy something like that.. It's insane in this day of age..

 

[threecy]

Shouldn't be mad at the new owners here - this pass apparently wasn't guaranteed for "x years," thus there was no obligation.

Liken this to Company B buying out Company A. It's Company B's obligation to compensate Company A. It is up to Company A to pay their shareholders and/or arrange for them to continue to be compensated.

If anyone owns one of these passes and is mad, they should go after ASC.

 

[ctenidae]

So, do the certificate holders get any compensation? Seems to me if you buy an interest in something that is later sold, you should get paid for your portion of that interest.

 

[SkiDog]

So, do the certificate holders get any compensation? Seems to me if you buy an interest in something that is later sold, you should get paid for your portion of that interest.

I think there was some sort of recent "payout" ill see if I can find a link over at Kzone.

M

 

[drjeff]

The issue at hand, and why the new folks running the LIFTS here can do this, is basically that the original bonds issued decades ago by the Sherburne Corp (K's orginal, orginal parent corp) stated that the bonds would be honored for a free season pass as long as Sherburne corp exists and is running the lifts. In subsequent purchases, first the morphing of Sherburne to form SKI Ltd, and then under ASC's ownership, Sherburne corp essentailly was bought and therefore was essentially running the lifts.

Under the new agreement, the entity that was at one point Sherburne Corp is now owned by S&P Land, and the lifts and operations are being handled by Powdr, hence the lifts aren't being operated by what was once Sherburne, and therefore the stipulation of the bond of free skiing doesn't necessarily carry over (lots of extra info on this in multiple threads over at k-zone right now)

If you were an original bond holder from the 20 odd years ago that they were issued, you've made out like a bandit. If your someone who in the past few years have picked one up off of ebay that have typically gone for $8000-$10000, you're real unhappy! But it is an investment that those folks decide to make, and granted up until now it had some very attractive returns/benefits, but with any investment one has to assume some risk, and thats the cold, buisness reality here.In the big scheme of things for the typical bond holder, who is generally a property owner at K, the cost of a years season pass is a small drop in the bucket compared to what they're typically paying yearly in taxes, travel, equipment, property management/maintenance, etc.

Good PR move on the new owner's part, no way. Are they in their right to do this, apparently so. If this is a sign of things to come with respect to pass prices, they'll be ALOT of angry k-folk spending their $$ at other places.

 

[skiadikt]

apparently many of those bond passes were transferable yearly. until the pass prices came down a couple years ago with the a41, we always bought bond passes. they were usually $100-200 cheaper than a season pass sold by k/asc. for quite a few years we bought our passes from scott smith, pres smith's son. i remember when we'd go over to pick them up (quite a place), he had a couple pages of names that he'd go through to find my name. i'm willing to bet he'd bag over 100k a year from selling these bond passes. others like rick from the basin ski shop also would sell them. it is too bad for those who recently bought those lifetime passes for 8-10k though ... hopefully this isn't the first of moves that's makes us wish asc was still running the place. be careful what you wish for ...

 

[JimG.]

I'm sure this will piss people off...people who had free passes. Who else is it going to piss off though?

I'm going to take alot of heat, but it's exactly what I would do as the new owner. Why would I agree to honor an arrangement offered by the old owner, an owner I might add known for pretty poor business decisions and results? And why should anyone be surprised by this? We already know the cheap season passes are history too.

You cannot judge a new business owner by their first few decisions. And they're going to anger a few folks if they intend to turn that place around financially.

 

[drjeff]

I'm sure this will piss people off...people who had free passes. Who else is it going to piss off though?
QUOTE]

They were never "free" passes, since the original owner(s) of the bonds put up the $$ which was used as investment capital for K to become the monster that it is.

Some folks just chose to transfer the bonds payout(the season pass) to others. Just think of it like a savings bond, except that instead of paying you the bonds cash value back, this bond paid out in passes.

 

[ctenidae]

How many people had these, anyway? I mean, are they pissing off 6 people, or what?

I'll agree with JimG on this one- no reason to honor the passes, and best not to- from a revenue perspective and an administrative perspective.

 

[andyzee]

be careful what you wish for ...

I've been saying that for months and this is only a start.

 

[JimG.]

I'm sure this will piss people off...people who had free passes. Who else is it going to piss off though?
QUOTE]

They were never "free" passes, since the original owner(s) of the bonds put up the $$ which was used as investment capital for K to become the monster that it is.

Some folks just chose to transfer the bonds payout(the season pass) to others. Just think of it like a savings bond, except that instead of paying you the bonds cash value back, this bond paid out in passes.

Yes, I see the situation here. The passes were given to investors who then had the ability to "sell" them to others. I'm sure these folks are not pissed off, probably glad they sold out, especially the ones who did so recently.

And now there are folks who spent around $10K for these lifetime passes. I'll go back to the original terms used...they bought them as an investment.

And like any other investment, the potential to lose it all existed. And lost it they did. Thems the breaks. I still don't blame the new owners.

 

[SkiDork]

I'm a loser in this - I bought 2 secondhand in 2003

I'll lose about 2K per.

I'm hoping I can at least claim this as a loss on my income taxes.

Any accountants out there how can confirm that notion?

 

[JimG.]

I'm a loser in this - I bought 2 secondhand in 2003

I'll lose about 2K per.

I'm hoping I can at least claim this as a loss on my income taxes.

Any accountants out there how can confirm that notion?

I'm sorry to hear that...but I like your attitude about it.

Trying to turn a negative into a positive. The world needs more folks like you.

 

[SkiDork]

I'm sorry to hear that...but I like your attitude about it.

Trying to turn a negative into a positive. The world needs more folks like you.

Thanks Jim.

Bottom line - it's an investment. I told Ty last night - it's just like buying shares of IBM and having them go down.

If you play, you gotta be prepared to pay..

 

[MikeTrainor]

Thanks Jim.

Bottom line - it's an investment. I told Ty last night - it's just like buying shares of IBM and having them go down.

If you play, you gotta be prepared to pay..

Glad to see you are taking a positive view. Judging from the fine print that has been posted on various internet forums. I think that there can be different interpretations to it. While there legal team interprets it one way I am sure another could view it differently. I am really surprised as a bond holder you are just accepting it as it is. I am curious to see how this all pans out.