killington cancelling lifetime passes

[SkiDork]

I agree.

Wondering, however, what the legality of somehow dissolving the Sherburne Corp/Killington Ltd. during the sale is? Not being a lawyer I have no idea.

I'll leave it in the hands of the AG of VT now - I just sent out my formal complaint.

Who knows? Maybe if enough pressure is put on SP they'll sweeten the deal somewhat, hey I'll take that.

 

[JimG.]

Those two letters, the original letter and the termination letter, put it in clear language. Powdr appears to have no obligation to continue to allow those passes (again, those passes involved investment in the original corporation - which the buyer paid fair market value for - ASC received these funds). It's one thing to give away a few thousand dollars for PR - as Powdr is by honoring these passes for 2 years (200 passes X say $500 = $100,000!), but its another for them to let $1,000,000 in passes float around over the next few years for free - as a corporation, the buyer would not be doing what's best for their shareholders. If I were a shareholder and I knew my company was letting $1,000,000 or even $500,000 go, I'd be furious!

Gee...you mean it has to be run like a business?

Your words are very to the point. Excellent.

 

[thetrailboss]

Those two letters, the original letter and the termination letter, put it in clear language. Powdr appears to have no obligation to continue to allow those passes (again, those passes involved investment in the original corporation - which the buyer paid fair market value for - ASC received these funds). It's one thing to give away a few thousand dollars for PR - as Powdr is by honoring these passes for 2 years (200 passes X say $500 = $100,000!), but its another for them to let $1,000,000 in passes float around over the next few years for free - as a corporation, the buyer would not be doing what's best for their shareholders. If I were a shareholder and I knew my company was letting $1,000,000 or even $500,000 go, I'd be furious!

True, but this does not address the language that has been put forward from the P&S agreement as well as other SEC filings.

 

[ski_resort_observer]

From the Rutland Herald article, "Fischer(Powdr) said he hopes to soon make public the exact language contained in the sales agreement with ASC, which he said proves the company is absolved of responsibility to continue the lifetime passes".

Isn't this contrary to the P&S agreement posted by several here?

 

[thetrailboss]

From the Rutland Herald article, "Fischer(Powdr) said he hopes to soon make public the exact language contained in the sales agreement with ASC, which he said proves the company is absolved of responsibility to continue the lifetime passes".

Isn't this contrary to the P&S agreement posted by several here?

I think so. We've seen language from the P&S as well as the SEC Filings...so maybe they are getting confused.

If they did do an asset purchase, then technically the liabilities of Killington Ltd. don't transfer...unless there was an agreement to transfer them.

 

[madskier6]

Wondering, however, what the legality of somehow dissolving the Sherburne Corp/Killington Ltd. during the sale is? Not being a lawyer I have no idea.

If you mean dissolving the corporation right after the sale is consummated, that is perfectly legal (in most states). That would not absolve the corporation of its existing liabilities, however. It would start the clock though for all creditors to present their claims to the corporation for final disposition (again in most states. I'm not sure of the specifics under VT law).

 

[thetrailboss]

If you mean dissolving the corporation right after the sale is consummated, that is perfectly legal (in most states). That would not absolve the corporation of its existing liabilities, however. It would start the clock though for all creditors to present their claims to the corporation for final disposition (again in most states. I'm not sure of the specifics under VT law).

Absolutely right as far as I know. That's why I asked (somewhere) if any passholders involved got some compensation from ASC/SKI/Sherburne Corp./etc. during any transfer of ownership. The pass is a property interest. Somehow the owners need to be compensated for that....it can't simply disappear.

 

[jerryg]

Gee...you mean it has to be run like a business?

Your words are very to the point. Excellent.

I agree with the above statements, but the letter is quite clear. Powdr/SP found their legal precedent and told ASC that they would not be honoring the lifetime passes, but instead would be giving out 2 years of passes. Given that that the pass office was going to be closed and that Allen Wilson was the issuer of many of these, they probably requested the letter go out prior. Wilson (presuming his job would be gone) and ASC probably could have told them to write the letter themselves, but ultimately, I think someone wanted the letter to come from Killington, which in one way or another, it looks as though it did, instead of some corporate headquarters.

 

[JimG.]

... and i'm pretty sure the number of those yearly resaleable passes is in the thousands. during my first season at k, i found that everyone in my ski house was buying one of these yearly bond passes usually for $100-200 below the k early bird price. after that, i never bought a pass from k until the a41. there were a number of businesses on the access who brokered these passes and the supply seemed pretty limitless. some of these folks made tens of thousands (maybe 100k+) from these sales yearly. not that they get my sympathy but if anyone, they're going to be ones hit the hardest.

the pr fallout among individual skiers is minimal. few to none are going to take their business elsewhere. but the biggest problem may turn out to be those folks on the killington town board who got screwed by this, whom sp land may have to go through to get approvals for their various expansion projects.

How did I miss this post...another really good one.

The best laid plans...

 

[jerryg]

How did I miss this post...another really good one.

The best laid plans...

That is an interesting angle. You'd think that SP would have thought about this and maybe even check to see who held passes before taking this action. :uzi: Foot!

 

[JimG.]

That is an interesting angle. You'd think that SP would have thought about this and maybe even check to see who held passes before taking this action. :uzi: Foot!

This is the classic type of thing that IS forgotten or overlooked though.

And sometimes these things are thought of and then thrown out like bait to see what bites. Wanna bet they hedge and offer concessions?

 

[ski_resort_observer]

Wanna bet they hedge and offer concessions?

I think the 2 year extension was the consession that they hoped would work but it appears that they slightly miscalculated.

Given that that the pass office was going to be closed and that Allen Wilson was the issuer of many of these, they probably requested the letter go out prior

Since Allen Wilson came to kmart from the Bush in the mid 90's, I don't think he would be the issuer? They were issued in the late 50's and 60's.

 

[SkiDork]

I think the 2 year extension was the consession that they hoped would work but it appears that they slightly miscalculated.



Since Allen Wilson came to kmart from the Bush in the mid 90's, I don't think he would be the issuer? They were issued in the late 50's and 60's.

Anything that was sold secondhand (like the 2 I purchased) were signed by AW

 

[thebigo]

The AP article is on the Salt Lake Tribune's website, not that anybody in Salt Lake would care about Killington but it does show the appeal of the story.

http://www.sltrib.com/ci_5928163?source=rss

 

[madskier6]

The pass is a property interest. Somehow the owners need to be compensated for that....it can't simply disappear.

Well, that depends on the specific terms of the property interest. Just because you have a lifetime pass doesn't necessarily mean that the holders have to be compensated for it when the resort is sold. It could simply disappear. According to what people have posted about the fine print on the passes, there is no right to compensation.

If you're talking about the shares of stock that the original investors received, along with the lifetime pass, you may be right if Sherburne Corp. issued standard common stock. They would be entitled to receive something when the corporation was sold. Those shareholders probably received something when Sherburne/SKI Ltd. was sold to ASC. They would get nothing from this deal since ASC probably bought out their shares when it acquired K/Pico.

If, however, Sherburne issued some form of preferred stock, then it would depend on the terms of that preferred stock. The corporation has the right to specify exactly what rights its holders of preferred stock are entitled to. If investors don't like the corporation's terms, they don't have to buy the preferred stock.

 

[andyzee]

many are local business people on the Access Road who have some clout and some say.

And do keep in mind that these folks have a major interest in Killington being successful. Lost revenue and bad publicity for Killington ski resort does not help their business.

 

[threecy]

In regard to the changes since the original purchase agreement, my guess is they put that clause in there originally to get things done without problems from shareholders who are lifetime passholders...if indeed it is dropped, it may have been a negociating issue - ASC refused to throw something in or come down on price, so the new owners may have said "forget it, if we're paying $85m, we're not talking on in excess of $1m of pass liabilities from you"

 

[MikeTrainor]

The story is on the front page of boston.com now. "Killington ski resort is telling hundreds of people with lifetime passes that their unlimited access to the slopes is coming to an end."

http://www.boston.com/business/ticker/2007/05/killington_canc.html

 

[jerryg]

In regard to the changes since the original purchase agreement, my guess is they put that clause in there originally to get things done without problems from shareholders who are lifetime passholders...if indeed it is dropped, it may have been a negociating issue - ASC refused to throw something in or come down on price, so the new owners may have said "forget it, if we're paying $85m, we're not talking on in excess of $1m of pass liabilities from you"

I've read a few difference articles now and it was not ASC, it was indeed Powdr who did this and feel that they are being generous in giving the 2-year exptension. They claim that lifetime is equal to lifetime of the previous corporation or something silly.

This won't cost them all that much money, but it WILL be bad for PR. uke:

 

[JimG.]

The story is on the front page of boston.com now. "Killington ski resort is telling hundreds of people with lifetime passes that their unlimited access to the slopes is coming to an end."

http://www.boston.com/business/ticker/2007/05/killington_canc.html

Pretty soon it will be "Earth faces day of the apocalypse; revoked lifetime passes to blame". It's probably running across the tickler in Times Square right now.

Admit it...we really do have a shortage of worthwhile news for all the outlets and talking heads to discuss.