Steamboat suit settled for $5.14 million
STEAMBOAT SPRINGS – Documents filed with the Securities and Exchange Commission Tuesday revealed that American Skiing Company will pay Triple Peaks LLC $5.14 million to settle a lawsuit over the abandoned sale of the Steamboat Ski Area.The settlement calls for two payments with $3 million due immediately and another $2.14 million due on or before April 10, 2005. The two payments combined represent 5.6 percent of the original sale price of $91.4 million. The agreement to sell the ski area fell apart on March 26, 2002, when American Skiing Company officials and their creditors decided it was in the company’s best interests to sell Heavenly Resort, Calif., to Vail Resorts for $102 million, rather than to consummate the Steamboat deal. “I think it’s a reasonable settlement for both sides,” Tim Mueller, the managing member of Triple Peaks, said Tuesday. “We thought we had the upper hand, but there are no slam dunks in the court system.”The amount of the settlement would bump to $6 million if American Skiing Company sold all of its assets to a third party prior to April 1, 2006. And Mueller must be offered a 30-day negotiation period before American Skiing Company could attempt to sell the Steamboat Ski Area to a third party any time in the next three years. Mueller said it’s not out of the question to think that he might successfully negotiate a second deal with American Skiing Company. Dave Hirasawa, manager of investor relations for American Skiing Company, called that clause in the settlement agreement “highly theoretical.” He pointed out that all it requires his company to do is offer a negotiation period and does not bind it in any other way.Hirasawa reiterated that American Skiing Company has $5 million in place to cover the bulk of the settlement.American Skiing Company officials said Monday the amount of the settlement will not be charged only to the Steamboat Ski Area’s balance sheet, but to the overall company. American Skiing Company owns seven ski areas in addition to Steamboat. They include The Canyons, Utah; Killington, Vt.; Pico Mountain, Vt.; Mount Snow, Vt.; Attitash Bear Peak, N.H.; and Sugarloaf/USA and Sunday River, both in Maine.Joel Glover, a Denver attorney for Triple Peaks, declined to discuss the terms of the settlement.The sale contract called for American Skiing Company to pay a $500,000 penalty in the event that the contract was breached. American Skiing Company expressed a willingness to pay the penalty, but Glover argued on behalf of his clients that only Triple Peaks had the right to invoke the penalty by breaching the contract.American Skiing Company had petitioned the Colorado Supreme Court to hear the suit and was waiting to hear the outcome of that request when the settlement was reached.The original Steamboat deal was to have closed by the end of 2001, but a difficult financing climate in the months immediately following the terrorist attack of Sept. 11, 2001, prolonged the closing until late March 2002.American Skiing chief executive B.J. Fair said at the time the reversal of plans came down to the fact that the company’s banking partners preferred the Heavenly deal to the Steamboat deal. The plan was to use proceeds of the sale to reorganize American Skiing Company’s significant debt. Since the banks held liens on American Skiing Company’s assets, their approval was necessary before any ski area sale could be consummated, Fair said.