Kmart pass holders still paying lawyers

[ski_resort_observer]

Wow, over 1,000 plaintifs, suing every entity involved with the resort. I'd like to see how tall that pile of paperwork will end up. If the resort loses I wonder how much the prices go up. Gotta make it up somewhere.
http://www.timesargus.com/article/20091108/BUSINESS/911089999/1006/BUSINESS

 

[catskills]

Vermont could get a bad name over this. Tourists welcome to Vermont where your purchases may not be at all what you thought you were getting. The guarantee is there are no guarantees. Its the Vermont way.

A lifetime pass by definition is for a lifetime. Anything else is for lack of a better word is STEALING. These ski corporations may have just as well held a gun to the lifetime pass holders and said give me your all your money.

The new Killington owners must figure they can get away with this given the current Vermont state laws.

 

[Hawkshot99]

Why must the new owners honor the bad business practices of a previous owner? They never told the people they would get a lifetime pass.

 

[ski_resort_observer]

Tourists welcome to Vermont where your purchases may not be at all what you thought you were getting. The guarantee is there are no guarantees. Its the Vermont way.

You mean that movie pass I bought last night in Burlington for $9 might not be a lifetime pass, like I thought. Dang that stinks.

 

[tylerjames]

Why must the new owners honor the bad business practices of a previous owner? They never told the people they would get a lifetime pass.

your an asshole.

it was promised to these passholders as far back as the late 60s. the new owners should be bound to respect the promises that the past owners committed to, just as they would be to their debt.

this is just another reason why i hate kmart

 

[dmc]

your an asshole.

yeah - How dare he......? :roll:

 

[catskills]

Why must the new owners honor the bad business practices of a previous owner? They never told the people they would get a lifetime pass.

Pssst hey mister want to buy a lifetime ski pass at Killington. Oh too bad, Killingston got sold and that lifetime pass was only good for one ski season. :blink: This is about as bad as Credit Card companies jacking the interest rates up to 28% just because they can. :smash:

 

[TheBEast]

it was promised to these passholders as far back as the late 60s. the new owners should be bound to respect the promises that the past owners committed to, just as they would be to their debt.

Not that I think what the new owners of Killington are right, but that's why they bought the assets of the old company and NOT the company. By doing so they would then legally be able to cancel those lifetime passes. Plain sucks that this is how it has to shake out. We'll see how the passholder make out in court. I wonder what kind of damages they are seeking? Money or just their lifetime passes honored?

 

[RootDKJ]

your an asshole.

it was promised to these passholders as far back as the late 60s. the new owners should be bound to respect the promises that the past owners committed to, just as they would be to their debt.

this is just another reason why i hate kmart

that's a bit harsh against Hawkshot

 

[whitemtn27]

A few years ago, I worked for a movie theater company. Our company bought out a smaller theater chain that had issued 'lifetime passes' to some of their customers for various reasons. There were a couple of hundred of them outstanding.

As part of the property transaction, our company investigated whether we were legally required to continue honoring the lifetime passes. It worked out that, legally, we didn't have to honor them anymore. I would submit that the Killington passholders' first gripe is with the old Killington management, that gave them a 'lifetime' pass without any legal encumberance on the ski area property itself that would require a future operator to honor them.

At the theater company, we ended up honoring the passes anyway. Our operations department believed that the bad press we would assuredly get from refusing them would outweigh the very minor amount of revenue lost on box office -- and since 90% of our profits came from food and beverage sales anyway, it would be better to keep the passholders as happy, popcorn-buying customers instead of turning them into angry potential litigants.

By most accounts, there are about 1200 lifetime Killington passes outstanding. Apparently they were transferable. The right (by which I mean customer-oriented) thing for SPL/Powdr to do would have been to make them non-transferable, and continue to honor them for the existing passholders for their lifetime. If they do that, they absorb some cost for lift and snowmaking services, and continue to earn revenue on food/booze/lodging. Instead, they are getting dragged into court, and if they win, none of those 1200 people are coming back as customers anyway.

So yeah, I think the passholders have a legitimate gripe with the new ownership. Their investment made the current mountain infrastructure possible regardless of the name of the operating company. SPL/Powdr shouldn't have to honor them for all time, but the original passholders should be accomodated. Just because the owners legally can tell them to go screw doesn't mean it's good business.

Also, whether or not it made financial sense to issue these in order to attract investment back in the olden days (and apparently it did, Killington was a big success until ASC) isn't relevant. Powdr knew these passes were out there and should have had a plan to address it in a cooperative and non-PR-disastrous way before they took over. The fact that they're playing hardball speaks volumes about how they view their relationship with the community of people that have spent years as loyal Killington customers.

[Disclosure: I am not a passholder, don't know anyone who is, and have no relationship with Killington other than paying the window rate there a couple times a year.]

 

[Edd]

your an asshole.

it was promised to these passholders as far back as the late 60s. the new owners should be bound to respect the promises that the past owners committed to, just as they would be to their debt.

this is just another reason why i hate kmart

that's a bit harsh against Hawkshot

Harsh indeed. Both parties have a point but Killington is making the wrong move here, particularly since a significant portion of these folks are locals, committed to this mountain. Even if they win in court, they WILL lose at least some of these passholders, incur court costs and bad PR, and offend their neighbors. Shortsighted, to say the least.

 

[Geoff]

Not that I think what the new owners of Killington are right, but that's why they bought the assets of the old company and NOT the company. By doing so they would then legally be able to cancel those lifetime passes. Plain sucks that this is how it has to shake out. We'll see how the passholder make out in court. I wonder what kind of damages they are seeking? Money or just their lifetime passes honored?

I thought the same thing but have since changed my opinion. There is legal precedent that KSRP does indeed inherit the obligations and it's not just an asset sale. It's the same employees and the same business. There have been cases where similar legal slight of hand happened... toxic waste issues... asbestos... where the 'asset buyer' was held liable for the obligations of the previous business owner.

I figure it's highly likely that a jury will decide in the favor of the lifetime pass holders. It's not like a bunch of Vermonters sitting on a jury are going to have any sympathy for Utah and Texas corporate money.

 

[deadheadskier]

Hard to really comment without seeing the initial contract. Even if the original pass said 'lifetime' for whatever the business name was at the time, but were marketed as a lifetime of skiing at Killington, I would think it would stand up. There would have to be very specific language in the initial contract voiding the passes in the event of the sale of the business. My guess is the latter is not present as they wouldn't have been able to lure buyers with that kind of language.

 

[dmc]

There is no such thing as lifetime anything...

really.. I'd NEVER buy a lifetime anything... I just wouldn't...

I do remember hearing that KMart tried to be cool and offered them like 2 years or something when they didn;t need to.. legally...

Where Dork?

 

[WWF-VT]

"According to court documents, the class action includes 1,243 investor pass holders, which were issued between 1958 and 1965. Over the years, some passes have been sold and then resold."

My guess is that most of these passholders are now eligible for "Senior" passes. Who set the market for resale ? What is the obligation to the current owners for the resold passes? Hard to tell obligations without seeing the original contracts.

 

[Highway Star]

By most accounts, there are about 1200 lifetime Killington passes outstanding. Apparently they were transferable. The right (by which I mean customer-oriented) thing for SPL/Powdr to do would have been to make them non-transferable, and continue to honor them for the existing passholders for their lifetime. If they do that, they absorb some cost for lift and snowmaking services, and continue to earn revenue on food/booze/lodging. Instead, they are getting dragged into court, and if they win, none of those 1200 people are coming back as customers anyway.

This has to be explicitly clarified. Some (many, most?) of these passes have yearly transferable pass rights. So the way it works, is that someone holds the bond, and they may issue rights to a pass to someone different each year....and believe me, this wasn't for free. Some people would hold 20+ of these bonds and sell the passes for a bit less than the going rate. So last year, that was $1000.....that someone is paying for a bond pass transfer, vs. paying to POWDR each year.

I'm quite sure that the major issue POWDR has with that is that it's $1,000,000 of yearly revenue lost, which is probably worth going after.

 

[Geoff]

"According to court documents, the class action includes 1,243 investor pass holders, which were issued between 1958 and 1965. Over the years, some passes have been sold and then resold."

My guess is that most of these passholders are now eligible for "Senior" passes. Who set the market for resale ? What is the obligation to the current owners for the resold passes? Hard to tell obligations without seeing the original contracts.

There were two flavors of lifetime passes. One type allowed the owner to sell the skiing rights every year. Preston Smith & family along with a number of early management team members had a bunch of those. The other type were sold to the public or traded for services in the early days to get the resort off the ground. Those had a 1-time sale provision. Most of the people I know who bought the lifetime passes on the 1-time sale provision are still a little young to qualify for "Senior" passes.

The 1-time sale market was all on the private market. Most sold through advertisments in the local free paper. Most of the annual transfer passes were resold by a local ski shop.

 

[Rogman]

This issue has been beaten to death, here and at KillingtonZone. POWDR made an accounting decision that hurt themselves with the local community. The bad will generated probably isn't worth whatever dollars they are saving. However, if POWDR's plan was to buy and flip within a few years, then it was a smart move, since the subsequent owner would be unencumbered with the passes or the bad will, and thus the resort would be worth more in a sale. Right now, I doubt they'll do that, still, everything has a price.

 

[bvibert]

your an asshole.

that's a bit harsh against Hawkshot

Harsh indeed.

A bit too harsh. Hawkshot was just voicing his opinion, no need to call him names because his view doesn't match yours.

 

[millerm277]

I do remember hearing that KMart tried to be cool and offered them like 2 years or something when they didn;t need to.. legally...

Unless of course the court finds them to be valid (which seems at the very least, a possibility), in which case.....