Court decision: Will Vail Resorts end up running Park City Mountain Resort?
May 21, 2014
PARK CITY — A Utah judge Wednesday ruled in favor of Talisker Corp. and Vail Resorts in a legal dispute over property in and around the Park City Mountain Resort ski area. Much of the multi-part decision appears to be a final answer in the dispute, and seems to clear the way for Vail Resorts to take over operations at the Park City ski area.
District Judge Ryan Harris ruled Wednesday to deny a request from Powdr, the company that runs the Park City Mountain Resort, to reconsider parts of the case. Other elements of the case brought by the resort were dismissed "with prejudice," in essence ending the complaints. Harris also granted "summary judgments" for many Talisker motions to dismiss complaints brought by Powdr, meaning the case is unsupported by facts.
Vail Resorts jumped into the middle of Talisker-Powdr dispute in 2013, when the Broomfield-based resort company signed a long-term lease to manage the Canyons ski area. Talisker owns the Canyons property. As part of that deal, Vail Resorts agreed to take over the lawsuit between Talisker and Powdr. Talisker also owns much of the skiing terrain at Park City, and the two resorts could be linked.
At the time of the deal, some industry analysts wondered if Vail Resorts had paid too much to operate Canyons. Now, with the very real prospect of taking over operations at Park City, the deal looks significantly better.
In a Wednesday afternoon statement, Robert LaFleur, a resort company analyst with JMP Securities, reiterated an "outperform" rating recently issued for Vail Resorts stock. JMP Securities has a price target of $85 for the stock. Vail Resorts stock Wednesday closed at $69.50 per share, a gain of $3.3, or 4.7 percent.
As you'd expect, the winning side issued triumphant statements.
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Writing on behalf of Talisker, attorney John Lund wrote:
"We are very pleased with the Court's ruling today, reaffirming that Talisker's leases with PCMR (Park City Mountain Resort) expired on April 30, 2011, more than three years ago. Talisker is also pleased that the Court has denied PCMR's claims that Talisker violated any provisions of the lease, including with regard to any right of refusals. Talisker looks forward to bringing in Vail Resorts as its new tenant and operator of the terrain. By pursuing this lawsuit, PCMR caused years of unnecessary uncertainty for the Park City community and its guests. It's now time for PCMR to move on and work out a realistic solution for access to the ski terrain from Park City. Talisker also looks forward to concluding the rest of the court case, including working out the amount of back rent and damages owed to Talisker by PCMR."
Vail Resorts' statement was more restrained, reading, "… The Company is very pleased with the ruling today … in Talisker's favor on all matters relating to the expiration of the Park City Mountain Resort lease."
That failure to renew may go down in ski industry history as one the most glaring errors of all time.
According to court documents, Powdr was obligated to "affirmatively extend" a lease with Talisker for property at the resort. That required sending written notice to Talisker on or before March 1, 2011. That notice was sent days after the deadline, which was enough for Talisker to void the lease.
Talisker took advantage of the expiration of the lease with Powdr to try to either raise the rent or find an operator that would pay more for the resort property. That's when Vail Resorts stepped in.
While Harris' decision praised those involved in litigating the case — a matter of some high emotion in the Park City area — there was some public posturing on both sides.
In March, Vail Resorts CEO Rob Katz sent a letter to Powdr CEO John Cumming offering to buy Park City Mountain Resorts' assets, including lifts, snowmaking equipment and other improvements which it owns at the ski area.
Cumming responded he wasn't interested in a "Vail takeover" of Park City Mountain Resort.
In a statement Wednesday to the Park Record newspaper, Cumming reiterated that "we will not walk away and allow a Vail takeover."
But Cummings' statement also urged a settlement to the dispute, and repeated an offer to buy the Talisker-owned property at the ski area.
While Harris' summary judgements and dismissals with prejudice seem to end at least part of the dispute, a separate statement from Park City Mountain Resort attorney Alan Sullivan vowed to appeal the ruling, and asserted that Powdr would continue to operate the resort for the 2014-15 ski season.
Those statements prompted yet another statement from Talisker and Lund, urging negotiation, not appeal as the next step in the dispute:
"While we recognize that PCMR has the right to appeal, they have now brought numerous claims over three years, substantially all of which have been dismissed by the Court. PCMR has already asked this Court to reconsider some of its earlier rulings, and PCMR's claims were denied for a second time. We do not believe an appeal by PCMR has any merit and we sincerely believe that it would be best for all concerned for PCMR to stop using the legal system to cause further delay and uncertainty and refocus instead on a positive and constructive solution. We look forward to the Court proceeding expeditiously on the next steps in the process."