# killington cancelling lifetime passes



## nancy2 (May 14, 2007)

"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!!!!!!!


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## millerm277 (May 14, 2007)

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.


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## riverc0il (May 14, 2007)

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.


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## MikeTrainor (May 14, 2007)

riverc0il said:


> 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.


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## thebigo (May 14, 2007)

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.


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## dmc (May 15, 2007)

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..


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## threecy (May 15, 2007)

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.


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## ctenidae (May 15, 2007)

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.


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## SkiDog (May 15, 2007)

ctenidae said:


> 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


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## drjeff (May 15, 2007)

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.


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## skiadikt (May 15, 2007)

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 ...


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## JimG. (May 15, 2007)

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.


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## drjeff (May 15, 2007)

JimG. said:


> 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.
> ...


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## ctenidae (May 15, 2007)

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.


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## andyzee (May 15, 2007)

skiadikt said:


> be careful what you wish for ...


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


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## JimG. (May 15, 2007)

drjeff said:


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


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## SkiDork (May 15, 2007)

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?


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## JimG. (May 15, 2007)

SkiDork said:


> I'm a loser in this - I bought 2 secondhand in 2003
> 
> I'll lose about 2K per.
> 
> ...



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.


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## SkiDork (May 15, 2007)

JimG. said:


> 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..


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## MikeTrainor (May 15, 2007)

SkiDork said:


> 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.


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## madskier6 (May 15, 2007)

drjeff said:


> 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)



Your analysis is generally correct except that S&P Land does not own the entity that was at one point Sherburne Corp.  S&P Land bought the assets that were previously owned by Sherburne Corp. not the stock of the entity that was at one point Sherburne Corp.  If it was as you said, bond holders would have a stronger argument that S&P Land should honor the lifetime passes.

In addition, while I haven't read the acquisition agreements, the fact that Powdr is running the lifts shouldn't matter for this issue.  I understand that S&P has hired Powdr to run the lifts for them (but I could be wrong).  Therefore, S&P Land is still operating the lifts since they own all the mountain/skiing assets.  They have just decided to subcontract that piece out to Powdr since Powdr has more experience operating a ski area.  The operation of the lifts is still fundamentally for the benefit of S&P (and their real estate business).


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## ctenidae (May 15, 2007)

SkiDork said:


> I'm a loser in this - I bought 2 secondhand in 2003
> 
> I'll lose about 2K per.
> 
> ...




I doubt you can claim them. If you bought stock or bonds that had an intrinsic value- that is, if the stock was in a going concern or if the bonds were paying the coupon and hadn't matured yet, then maybe, but I don't think that's the case- otherwise as a stockholder you'd have gotten a vote (and compensation) on the sale, or as a bondholder you'd be entitled to the face value plus any early payment penalty. 

If instead (and I suspect this is the case) you bought a piece of paper that entitles you to nothing more than a lifetime pass, you're SOL.


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## ctenidae (May 15, 2007)

Hold the Presses!

From the Purchase and sale agreement between American Skiing Company Killington, Ltd., Pico Ski Area Management Company and SP Land Company, LLC dated February 16, 2007

http://www.sec.gov/Archives/edgar/data/1043432/000110465907016723/a07-7202_1ex10d1.htm

*8.23* *Lifetime Passes*.  _Buyer shall honor all Lifetime Passes _and shall cause any agreement for the sale of the Resort or the Business to require such subsequent owner to honor such passes; provided that in no event shall Buyer be required to enforce (nor shall it have any liability in respect to) such covenant with respect to such subsequent owner.  This covenant shall survive Closing indefinitely.

*9.1 * *Survival*.  ...(d)_ the covenant of Buyer contained in Section 8.23 shall survive indefinitely._  The agreements of the Sellers and the Buyer contained in this Agreement which by their terms require action following the Closing shall survive until the expiration of the applicable statute of limitation or, to the extent such agreements are expressly limited to other dates or times, such agreements shall survive only to such dates or times.

  Schedule 3.27(b) sets forth a list of all holders of “lifetime” and “honorary” ski passes and similar rights and privilege for use of Resort facilities or accommodations (“Lifetime Passes”). (I'm trying to find this schedule, but it may not be public)


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## SkiDork (May 15, 2007)

ctenidae said:


> I doubt you can claim them. If you bought stock or bonds that had an intrinsic value- that is, if the stock was in a going concern or if the bonds were paying the coupon and hadn't matured yet, then maybe, but I don't think that's the case- otherwise as a stockholder you'd have gotten a vote (and compensation) on the sale, or as a bondholder you'd be entitled to the face value plus any early payment penalty.
> 
> If instead (and I suspect this is the case) you bought a piece of paper that entitles you to nothing more than a lifetime pass, you'r33e SOL.



The piece of paper was actually a re-issued bond with the _exact same wording_ as the original but a different serial number.


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## ctenidae (May 15, 2007)

SkiDork said:


> The piece of paper was actually a re-issued bond with the _exact same wording_ as the original but a different serial number.



Right, but did it pay anything? if there was no income stream, it's just a pass. However, in light of the P&S, that could be an entirely moot point. Seems SP Land may be in violation of the P&S, and only 4 days after close.


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## SkiDork (May 15, 2007)

ctenidae said:


> Right, but did it pay anything? if there was no income stream, it's just a pass. However, in light of the P&S, that could be an entirely moot point. Seems SP Land may be in violation of the P&S, and only 4 days after close.




I'm certainly not a lawyer but I'll try to scan it and post it here very soon.


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## ctenidae (May 15, 2007)

I can make it easy- did you ever receive a check form them, or a notice delaying a payment? if not, it's probably not a paying bond. Still, I'd like to see the bond.


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## JimG. (May 15, 2007)

STOP IT!

I really miss ski season when all you guys talk about is the snow.

I was pretty much over ski season but all this legal talk is giving me a relapse.


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## ski_resort_observer (May 15, 2007)

Don't forget that SP Land Company purchased the developement rights to almost 500 acres of land at the base of kmart from ASC back in 2004. I think they paid 75m?

I also seem to remember that as far back as 2000 SP Land thru their parent company Ski Partners Ltd has been financially involved with kmart.


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## awf170 (May 15, 2007)

JimG. said:


> STOP IT!
> 
> I really miss ski season when all you guys talk about is the snow.
> 
> I was pretty much over ski season but all this legal talk is giving me a relapse.




Its going to snow on Mt. Wash on Wednesday night! Hopefully.  Perfect setup for awesome corn on Sunday.  Monroe Brook is going to be off the hook again!

(That probably didn't help)


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## Geoff (May 15, 2007)

ski_resort_observer said:


> Don't forget that SP Land Company purchased the developement rights to almost 500 acres of land at the base of kmart from ASC back in 2004. I think they paid 75m?
> 
> I also seem to remember that as far back as 2000 SP Land thru their parent company Ski Partners Ltd has been financially involved with kmart.



It wasn't exactly a "purchase".  ASC defaulted on a large loan from a subsidiary of the Texas-based Eiger Fund called Ski Partners.  ASC ended up swapping a 75% interest in the land at the bottom of Killington they got in the land swap deal with the state for Parker's Gore.  Eiger created another subsidiary called SP Land to own this asset.  Last year, Eiger was reporting that they were in the process of selling a big chunk of that land to Centex, a big Texas property developer that does both huge residential developments and resorts in places like Hawaii and the Carolinas.  Centex backed out, I recall, last fall.

Last Friday, SP Land bought the remaining 25% of all that land plus all the Killington ski resort assets (allmost all on leased land).  If you read the SEC filing from ASC, there is a $3 million escrow account on this sale.  If the new owners refuse to honor the lifetime passes, those passholders can always get the Vermont attorney general's office to go after that $3 million sitting in the escrow account that is supposed to go to ASC if there are no other claims against Killington that aren't already accounted for.  The SEC filing says that the new owners are supposed to honor those passes but I don't have any idea if that is legally binding.


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## ckofer (May 15, 2007)

ctenidae said:


> 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.



It would seem like a good opportunity for the new company to offer, for a limited time, some sort of promotion to those pass holders. Maybe it's somewhere in this thread, but any idea how many are out there?


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## millerm277 (May 15, 2007)

ckofer said:


> It would seem like a good opportunity for the new company to offer, for a limited time, some sort of promotion to those pass holders. Maybe it's somewhere in this thread, but any idea how many are out there?



For the true lifetime passes, that should be recognized regardless of owner, I believe the number is around 240, and those are the people who may have a legal claim, and will probably file a lawsuit.


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## ctenidae (May 15, 2007)

Geoff said:


> The SEC filing says that the new owners are supposed to honor those passes but I don't have any idea if that is legally binding.



It is part of a contract (it's not just an SEC filing- it's the actual P&S, which must be filed with the SEC), so it's binding. Who has the power to enforce, though, gets a little murky. The passholders could, conceivably, sue for specific performance. Hard to say how that'd go.


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## jerryg (May 15, 2007)

Geoff said:


> If the new owners refuse to honor the lifetime passes, those passholders can always get the Vermont attorney general's office to go after that $3 million sitting in the escrow account that is supposed to go to ASC if there are no other claims against Killington that aren't already accounted for.  The SEC filing says that the new owners are supposed to honor those passes but I don't have any idea if that is legally binding.



Right. New owners decide to not abide by the wording of the contract so the other guy has to pay. Nice try. ASC may be inept at many things, but their lawyers are far better than that. ANY lawyer is.


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## SkiDork (May 16, 2007)

ctenidae said:


> Hold the Presses!
> 
> From the Purchase and sale agreement between American Skiing Company Killington, Ltd., Pico Ski Area Management Company and SP Land Company, LLC dated February 16, 2007
> 
> ...





This is very interesting.  Not being a lawyer I don't know what to do with this info, but I'll be sure to speak to some other bond passholders I know and see what they think we should do.  Thanks for the post.


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## SkiDork (May 16, 2007)

from Mr Moose on KZone, re: SEC filing document referenced above

The February document often quoted from the SEC filing on the proposed sale from ASC to SP land is a _pre closing document_. The controling document is what was actually signed at the closing. The interested parties, the bond holders, need to get a copy of that document. Since it is a sale of a public coporation, and since they are interested parties, they should be able to get a copy. 

Gotta try to get a copy of the actual closing document.  I imagine those 2 clauses were re-worded or eliminated.


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## threecy (May 16, 2007)

If that clause is in the final contract, passholders certainly do have reason to be angry with the new owners.  However, I would find it hard to believe the new owners would violate an agreement so quickly...it'll be interesting to see the final agreement.


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## madskier6 (May 16, 2007)

SkiDork said:


> from Mr Moose on KZone, re: SEC filing document referenced above
> 
> The February document often quoted from the SEC filing on the proposed sale from ASC to SP land is a _pre closing document_. The controling document is what was actually signed at the closing. The interested parties, the bond holders, need to get a copy of that document. Since it is a sale of a public coporation, and since they are interested parties, they should be able to get a copy.
> 
> Gotta try to get a copy of the actual closing document.  I imagine those 2 clauses were re-worded or eliminated.



Just a clarification: The SEC filing, while a "pre-closing document" is the Purchase Agreement, which is a legally binding contract.  Another Purchase Agreement would not have been signed at the closing but other documents would have been signed and delivered.  The SEC filing Purchase Agreement speaks as of its date (February 16, 2007).  The closing deliverables that were signed and delivered at the closing were effective as of the closing date and determined the final terms of the deal.  So you have to read the 2 sets of documents together to determine the final closing terms.

What may have happened is that SP Land required that ASC waive or eliminate the Section 8.23 covenant before they agreed to close the deal.  If this is what happened, there should have been some sort of document (but not another Purchase Agreement) that was signed by both parties (or at least ASC) that waived or deleted the Section 8.23 covenant.  There may have been a purchase price adjustment to address the deletion of Section 8.23.


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## SkiDork (May 16, 2007)

madskier6 said:


> Just a clarification: The SEC filing, while a "pre-closing document" is the Purchase Agreement, which is a legally binding contract.  Another Purchase Agreement would not have been signed at the closing but other documents would have been signed and delivered.  The SEC filing Purchase Agreement speaks as of its date (February 16, 2007).  The closing deliverables that were signed and delivered at the closing were effective as of the closing date and determined the final terms of the deal.  So you have to read the 2 sets of documents together to determine the final closing terms.
> 
> What may have happened is that SP Land required that ASC waive or eliminate the Section 8.23 covenant before they agreed to close the deal.  If this is what happened, there should have been some sort of document (but not another Purchase Agreement) that was signed by both parties (or at least ASC) that waived or deleted the Section 8.23 covenant.  There may have been a purchase price adjustment to address the deletion of Section 8.23.



Interesting.  Not sure how to go about getting hold of the final closing  documents.  Any suggestions?


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## ctenidae (May 16, 2007)

From the "Definitive Information regarding Mergers and Acquisitions" filing (http://www.sec.gov/Archives/edgar/d....htm#MaterialTermsOfTheKillingtonPurch_051620) dated 3/9/07:

*Covenants*

Article VIII of the Killington Purchase Agreement contains a number of covenants by American Skiing, Killington, Ltd., Pico and Buyer, including covenants relating to:

 (P25)  Buyer honoring all lifetime passes indefinitely and causing any agreement for the sale of Killington/Pico to require the subsequent owner to honor such passes.

I'd say that pretty much states definitively that honoring the lifetime passes is part of the sale agreement.


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## SkiDork (May 16, 2007)

ctenidae said:


> From the "Definitive Information regarding Mergers and Acquisitions" filing (http://www.sec.gov/Archives/edgar/d....htm#MaterialTermsOfTheKillingtonPurch_051620) dated 3/9/07:
> 
> *Covenants*
> 
> ...



Right, but if you read some of the posts above it sounds like I need to get hold of the closing documents, some of which may have over-ridden this clause.


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## JimG. (May 16, 2007)

awf170 said:


> Its going to snow on Mt. Wash on Wednesday night! Hopefully.  Perfect setup for awesome corn on Sunday.  Monroe Brook is going to be off the hook again!
> 
> (That probably didn't help)



No, that was great!

I'd love to get up there again but it's just too far for me at this point.


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## tree_skier (May 16, 2007)

Just my 2 cents but if it was my company and I had the legal right to I would cancel the lifetime passes and a well run company wouldn't do it if they didn't have the right to.  Now I have also worked for people who actually said "it's my company and I will do whatever the he@# I want, I don't care if it's against the fu@#$%^ law let them complain to the state"  so if I have one I would look into it further then just taking the companies word for it.  The above attitude lost them a good employee and I now own a competing business.


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## jerryg (May 16, 2007)

tree_skier said:


> Just my 2 cents but if it was my company and I had the legal right to I would cancel the lifetime passes and a well run company wouldn't do it if they didn't have the right to.  Now I have also worked for people who actually said "it's my company and I will do whatever the he@# I want, I don't care if it's against the fu@#$%^ law let them complain to the state"  so if I have one I would look into it further then just taking the companies word for it.  The above attitude lost them a good employee and I now own a competing business.



So you would or wouldn't? This is a little unclear. Thanks.


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## tree_skier (May 16, 2007)

jerryg said:


> So you would or wouldn't? This is a little unclear. Thanks.




I would look into it if I owned one if not I don't really care.  Seeing as I don't own one I don't really care.  

I am surprised they lasted through ASC but that's another story.  Also on the legal side I am not surprised about the timing of the anouncement.  If they had waited and let the holders use the passes (even for summertime) then they would have made a statement to thier continued value.


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## madskier6 (May 16, 2007)

SkiDork said:


> Interesting.  Not sure how to go about getting hold of the final closing  documents.  Any suggestions?



I'm not certain whether public companies have to disclose these kinds of documents once they've disclosed the Purchase Agreement, as in ASC's case.  You can check the on-line SEC filing databases to be sure.  

I checked the 8-K filing that ASC filed on the date of closing.  There is no mention of any changes to the Purchase Agreement that occurred at the closing.  That doens't necessarily mean that Section 8.23 wasn't eliminated.

The thing to do is to send SP Land a letter requesting clarification on their cancelling the lifetime pass and referencing Section 8.23 of the Purchase Agreement.  Depending on their answer, you could then send a similar letter to ASC requesting similar clarification.


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## ctenidae (May 16, 2007)

SkiDork said:


> Right, but if you read some of the posts above it sounds like I need to get hold of the closing documents, some of which may have over-ridden this clause.




That clause is in the SEC filing relating all material aspects of the final contract. If the covenant was struck from the final, then they're going to have a bigger problem than 240 passholders. The SEC doesn't take too kindly to misleading public information. OF course, if you could get your hands on the actual signed contract, that'd be cool.


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## SkiDork (May 16, 2007)

madskier6 said:


> I'm not certain whether public companies have to disclose these kinds of documents once they've disclosed the Purchase Agreement, as in ASC's case.  You can check the on-line SEC filing databases to be sure.
> 
> I checked the 8-K filing that ASC filed on the date of closing.  There is no mention of any changes to the Purchase Agreement that occurred at the closing.  That doens't necessarily mean that Section 8.23 wasn't eliminated.
> 
> The thing to do is to send SP Land a letter requesting clarification on their cancelling the lifetime pass and referencing Section 8.23 of the Purchase Agreement.  Depending on their answer, you could then send a similar letter to ASC requesting similar clarification.



Thanks.  Technically ASC sent the letter cancelling the lifetime passes.  So should I send the letter to them first?


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## madskier6 (May 16, 2007)

SkiDork said:


> Thanks.  Technically ASC sent the letter cancelling the lifetime passes.  So should I send the letter to them first?



Yes.  My mistake.  I thought the letter came from the new owner.


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## madskier6 (May 16, 2007)

ctenidae said:


> That clause is in the SEC filing relating all material aspects of the final contract. If the covenant was struck from the final, then they're going to have a bigger problem than 240 passholders. The SEC doesn't take too kindly to misleading public information. OF course, if you could get your hands on the actual signed contract, that'd be cool.



That SEC filing was dated March 9 so it reflected what was in the Purchase Agreement.  That filing does not reflect the terms of the deal "as it closed".  I agree with you that ASC would have an obligation to disclose any "material" changes in the final "as closed" deal.  The question would be whether this change in the final deal (if it occurred), is material to ASC's business as a whole, thereby requiring them to disclose it to the public.


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## jerryg (May 16, 2007)

SkiDork said:


> Thanks.  Technically ASC sent the letter cancelling the lifetime passes.  So should I send the letter to them first?




Only if they were contracted to make that business decision on behalf of SP and Powdr. Prior to sending a letter to ASC, you should determine if they changed the purchase agreement and have interest in future operations. The cancellation is effective for next season onward and unless they are continuing to do business with either entity, sending to ASC would not get you anywhere. It reads as though their intent was that these passes were to be honored, but once the deal was completed, they can no longer assist as it is not their property.


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## threecy (May 16, 2007)

Any ASC stock owners have access to this stuff?


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## madskier6 (May 16, 2007)

jerryg said:


> Only if they were contracted to make that business decision on behalf of SP and Powdr. Prior to sending a letter to ASC, you should determine if they changed the purchase agreement and have interest in future operations. The cancellation is effective for next season onward and unless they are continuing to do business with either entity, sending to ASC would not get you anywhere. It reads as though their intent was that these passes were to be honored, but once the deal was completed, they can no longer assist as it is not their property.



My point in sending a letter is to flesh out the issue of what happened to the Section 8.23 covenant.  At this point, he does not know whether they changed the Purchase Agreement and if he inquired, perhaps ASC would tell him.  They also might not say anything at all but it's worth a shot.

Sending it to ASC first makes sense because that is who sent him the letter advising him that his rights had terminated.  In addition, if he has a legitimate claim, it would be against ASC as that was the entity whose actions terminated his rights by selling the Killington assets.  ASC is the entity who should be worried about passholders complaining about this.  ASC is responsible for all liabilities of K/Pico arising prior to the sale so that is who his claim would be against.

If you were going to file a lawsuit, you would name both Buyer and Seller as parties to the lawsuit & let them fight it out as to who is responsible.


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## jerryg (May 16, 2007)

madskier6 said:


> My point in sending a letter is to flesh out the issue of what happened to the Section 8.23 covenant.  At this point, he does not know whether they changed the Purchase Agreement and if he inquired, perhaps ASC would tell him.  They also might not say anything at all but it's worth a shot.
> 
> Sending it to ASC first makes sense because that is who sent him the letter advising him that his rights had terminated.  In addition, if he has a legitimate claim, it would be against ASC as that was the entity whose actions terminated his rights by selling the Killington assets.  ASC is the entity who should be worried about passholders complaining about this.  ASC is responsible for all liabilities of K/Pico arising prior to the sale so that is who his claim would be against.
> 
> If you were going to file a lawsuit, you would name both Buyer and Seller as parties to the lawsuit & let them fight it out as to who is responsible.



Nope. ASC holds no liability in this whatsoever. Did the letter come from Killington management or ASC? i.e., Dave Hirasawa? Are you kidding? "Hey as we've already pissed you all off, we decided to throw another bone onto the fire. We have decided that while WE honored your lifetime passes/bonds while WE owned the mountain... Well, we have decided that SP/Powdr will not. WE are writing to let you know this because they DID NOT MAKE THIS DECISION. WE did. We are not the owners anymore, but just before we signed on the dotted line, WE made that business decision for SP/Powdr"

Are you nuts, dude?


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## ski_resort_observer (May 16, 2007)

I agree with jerryg in assuming that the lawyers did an extensive due diligence on this question and determined that they could legally do this.


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## threecy (May 16, 2007)

jerryg said:


> Nope. ASC holds no liability in this whatsoever. Did the letter come from Killington management or ASC? i.e., Dave Hirasawa? Are you kidding? "Hey as we've already pissed you all off, we decided to throw another bone onto the fire. We have decided that while WE honored your lifetime passes/bonds while WE owned the mountain... Well, we have decided that SP/Powdr will not. WE are writing to let you know this because they DID NOT MAKE THIS DECISION. WE did. We are not the owners anymore, but just before we signed on the dotted line, WE made that business decision for SP/Powdr"
> 
> Are you nuts, dude?



I don't think madskier is nuts.  In theory, the unrecognized pass income is a liability, which is either passed onto the new owner or held by the seller.  Since you're talking about potentially over a million dollars in lost revenue, it is quite possible that the new owners told ASC to deal with it.  If the 6,000$ figure I've seen is right, they've certainly received their money's worth.  That's not to say they didn't buy a 'lifetime' pass...but someone has to take the blow...if ASC refused to discount the price of the deal, then it's quite likely the new owners took it out.

It's also possible that the new owners are banking on settling out of court by giving the passholders the equivlent of the passes - if these passes are as old as I've seen stated in some places, they certainly weren't valued at what they would be at the current size of Killington.  They're lifetime passes, not ownership per se - it might be easier to just say "apply X$ of remaining value to future season passes."

Another angle that I haven't seen is the agreement when these passes were purchased - does anyone have a copy of that contract?

madrider has it right - if you're going to sue, name both the current owner and the previous owner - let them and the courts fight it out.  This is similar to how other ski area lawsuits are filed - name as many defendants as possible.


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## madskier6 (May 16, 2007)

jerryg said:


> Nope. ASC holds no liability in this whatsoever. Did the letter come from Killington management or ASC? i.e., Dave Hirasawa? Are you kidding? "Hey as we've already pissed you all off, we decided to throw another bone onto the fire. We have decided that while WE honored your lifetime passes/bonds while WE owned the mountain... Well, we have decided that SP/Powdr will not. WE are writing to let you know this because they DID NOT MAKE THIS DECISION. WE did. We are not the owners anymore, but just before we signed on the dotted line, WE made that business decision for SP/Powdr"
> 
> Are you nuts, dude?



I disagree.  Why do you think that ASC made the decision for SP/Powdr?  Without a contractual obligation to honor the passes, SP/Powdr would have no duty to honor the passes.  It's not like the rights under lifetime passes run with the land or the Killington facilities.  It's a contractual obligation only.

From what I've heard the letter came from ASC or Killington management (that part doesn't matter) and stated that "when the sale closes" you will not have any more rights under the lifetime pass.  By sending the letter, ASC was positioning themselves to limit any claims from passholders once SP/Powdr refuses to honor the passes.


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## ctenidae (May 16, 2007)

Pre-closing covenants did prohibit ASC from issuing any new lifetime apsses, but doesn't say anything about cancelling them. Conversely, the agrrement specifically bars SP/Powdr from cancelling any, but says nothing about issuing them. However, the lists of lifetime passholders are specifically mentioned several times in teh docs.

The best PR move would have been for ASC to cancel the passes, and SP/Powdr to reinstate them. If that is, in fact, their plan, then they've done a piss-poor job executing.


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## jerryg (May 16, 2007)

madskier6 said:


> I disagree.  Why do you think that ASC made the decision for SP/Powdr?  Without a contractual obligation to honor the passes, SP/Powdr would have no duty to honor the passes.  It's not like the rights under lifetime passes run with the land or the Killington facilities.  It's a contractual obligation only.
> 
> From what I've heard the letter came from ASC or Killington management (that part doesn't matter) and stated that "when the sale closes" you will not have any more rights under the lifetime pass.  By sending the letter, ASC was positioning themselves to limit any claims from passholders once SP/Powdr refuses to honor the passes.



I put it on quotes because I was being sarcastic and making read as though Dave Hirasawa was saying it. I firmly beleive that this was not an attempt for ASC to strip the passholders. This is on the hands of the new owners. You can sure ASC all you want, but a.) you aren't gonna get anything out of them and b.) there laywers can easily defend this. It's in the fine print for any one to understand that IF, and it's a big IF, there is any part to be held liable for honoring the passes, it is not ASC and if SP/Powdr went and signed a contract that in effect said that they were going to allow ASC to cancel life passes effective the day before the sale, well then SP/Powdr would look pretty negligiable.

Hate ASC or not - this is not the intent of ASC and people are going a litte far in their ASC hatred to try and put the blame on them. Hell, I ski at a resort that is still owned by them and I'm nt bitching. Furthermore, for ASC to come out and comment on this without Powdr doing so, is not even rational. If due dilligence is needed, it will come to fruition in court and the new Vermont skiing PR nightmare will ensue.


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## madskier6 (May 16, 2007)

jerryg said:


> I put it on quotes because I was being sarcastic and making read as though Dave Hirasawa was saying it. I firmly beleive that this was not an attempt for ASC to strip the passholders. This is on the hands of the new owners. You can sure ASC all you want, but a.) you aren't gonna get anything out of them and b.) there laywers can easily defend this. It's in the fine print for any one to understand that IF, and it's a big IF, there is any part to be held liable for honoring the passes, it is not ASC and if SP/Powdr went and signed a contract that in effect said that they were going to allow ASC to cancel life passes effective the day before the sale, well then SP/Powdr would look pretty negligiable.
> 
> Hate ASC or not - this is not the intent of ASC and people are going a litte far in their ASC hatred to try and put the blame on them. Hell, I ski at a resort that is still owned by them and I'm nt bitching. Furthermore, for ASC to come out and comment on this without Powdr doing so, is not even rational. If due dilligence is needed, it will come to fruition in court and the new Vermont skiing PR nightmare will ensue.



I agree with this.  I didn't pick-up the sarcasm in your post.  My bad.

I'm not saying that ASC has any ultimate liability here.  Based on what I've heard about the terms of the lifetime passes, they don't have any obligation to ensure that these passholders retain their rights under the new ownership structure.  The fact that they negotiated a covenant in the Purchase Agreement obligating SP/Powdr to honor those passes evidences their good faith.   They had no obligation to take care of these passholders but they nevertheless attempted to preserve their rights.

My point about writing to ASC was to find out what happened to the Section 8.23 covenant.  That may be the only way one will find out what happened.

My point about the liability being ASC's was that as between the Buyer & Seller, the Seller (ASC) is the one that owes these passholders whatever they're entitled to, which isn't much.  The fact that ASC sent the letter was an attempt to limit their exposure since as between ASC and SP/Powdr, ASC is the one that is somewhat responsible to the passholders.  SP/Powdr is not.

The million dollar question is what the hell happened to Section 8.23 and is SP/Powdr really breaching the contract right at/after the closing?


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## jerryg (May 16, 2007)

madskier6 said:


> The million dollar question is what the hell happened to Section 8.23 and is SP/Powdr really breaching the contract right at/after the closing?



They screwed up and it's gonna show up in any forthcoming SR or SL deal! :idea:


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## thetrailboss (May 16, 2007)

I certainly understand the situation and empathize...empathize because I am in a similar situation right now.  A mountain that I have been very loyal to has made some major changes in pricing that really impact me and they don't seem to understand my POV.  It really is tough trying to handle it....


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## Lostone (May 16, 2007)

Hard to see where starting the ownership of a new area and immediately generating bad will, with what would be a relative handful of loyal customers, will pay off.

Yes, you are possibly turning non-ticket paying customers into paying customers, but most likely you are turning them into commercials for other areas. :flame: 

And having ASC make the announcement is negligible.  Nobody is going to think ASC did it without pressure from the new guys.  :roll:


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## Newpylong (May 16, 2007)

The American Ski Company had an initial filing regarding the sale from February which REQUIRED that any sale would contain a clause honoring all past and present lifelong passes. Most likely this was removed from the final paperwork. So no, this isn't just typical ASC bashing... if you want to blame anyone it's them for doing this on the way out. Why blame SP for getting a better deal?


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## jerryg (May 17, 2007)

Newpylong said:


> The American Ski Company had an initial filing regarding the sale from February which REQUIRED that any sale would contain a clause honoring all past and present lifelong passes. Most likely this was removed from the final paperwork. So no, this isn't just typical ASC bashing... if you want to blame anyone it's them for doing this on the way out. Why blame SP for getting a better deal?



Obviously conjecture on your part, but if you are correct it can't just be removed. The filing with the SEC is ASC's current report and not a 14c filing. If the agreement was changed, it should be reflected in the aforementioned filing when that is made public. It would need to be an amendment agreed upon by both parties to be legal upon closing, especially if it means that ASC gained mored than $1,000,000 as result of said amendment. The only adjustments in the current report reflect additional taxes and closing cost made payable to the Seller. Persumably, it was either taken out legally by both parties or perhaps SP made their intentions known that they found a particular loophole in regard to the Shelburne Corp. running the lifts. If ASC would not gain financially for having this removed, it would make no sense to put it in as covenent and then remove it as they will not be burdened by the future cost of these passes. It is possible that SP said they would pay more money if ASC agreed to have it removed. If that is the case, it will have to be reported as part of the definitive closing. Furthermore, it is possible that it wasn't removed and SP didn't think it would be a big deal to do so. Like others have said, maybe they wanted to get the bad news out of the way first. 

Or someone could write, call, or email ASC:
David Hirasawa
American Skiing Company
P.O. Box 4552, 136 Heber Avenue
Suite 303 
Park City, UT 84060 
Telephone: (435) 615-0340. or (435) 615-0396
Email: investinfo@ascresorts.com


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## Vortex (May 17, 2007)

Alot of negitive vibes this year with passes.  Loon, Burke,ASc Pwdr. Interesteing, but not comfortable.


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## Terry (May 17, 2007)

Whether they can do it legally or not I don't know but it is going to cost them in the end from negative comments, and lost customers. I don't know how many have lifetime passes, but if they all are pissed and give lots of negative advertising about Killington it will lose a lot more money in lost ticket sales than it would ever gain by making these people buy passes!


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## ski_resort_observer (May 17, 2007)

As predicted the below market pass(A41) was a financial disaster for ASC. Powdr/SP has to turn that around. The lifetime pass thing effects such a small part of their market it doesn't even deserve it's own thread.


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## thetrailboss (May 17, 2007)

ski_resort_observer said:


> As predicted the below market pass(A41) was a financial disaster for ASC. Powdr/SP has to turn that around. The lifetime pass thing effects such a small part of their market it doesn't even deserve it's own thread.



Good point about small market.  My thoughts are this:  sure POWDR/SP Lands may be able to legally do what they want to do.  Sure it may be the best thing for the bottom line.  And I understand if this is a small group of folks.  But what is legal, what is good for the bottom line is not always the "smartest" or "best" thing to do for public relations and marketing.  This week we have seen all this bad publicity which has come as a result of this decision.  Resorts spend thousands, if not hundreds of thousands, of dollars to create an image which is impacted by a decision like this, which may save what, a few dollars?  It makes no sense.  

Another hypo is this: I can certainly act rude to people all day long.  There is "no rule" against that.  But it is not in my interest to do so.  Therefore, I don't.  This is a similar case.  Sure they might *legally* and perhaps *ethically* be able to do this, but it harms them in other ways and is not good business to piss off loyal customers, who are your core. 

As I have hinted, there is a resort/mountain [to remain unnamed at this time] that has almost tripled the amount of money for a season pass for me.  I have expressed my concern as a loyal customer and one who has done a lot of PR for them as a gesture of support.  It is a mountain where I spend more than just a season pass.  They have said that the change in policy is due to other people "abusing" the program.  So in essence they are punishing a loyal customer for the harm caused by others.  Does this make business sense?  No.    

In both these instances, the few dollars saved are not worth this debacle.


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## Vortex (May 17, 2007)

My take is if you bought a lifetime pass you probably had some real estate involvement.  ie a 2nd home or a local.  My guess is not many day skiers invested that much money to make day trips.

  Those folks I would think will stay(property owners), casue the choices are move and sell or tolerate it with frustration.  Terry is Correct in the negitive publicity may be the biggest issue for the resort.

I don't want to comment too much, cause I'm not involved and neither is my money.

When Loons passes were messed with I moved and I am selling my place near Loon. 

 I diagree with Ski Resort Observer this topic does deserve some consideration.  This is all about the new regime and the old customer base.


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## SkiDork (May 17, 2007)

I'm trying to compile a list of bondholders.  If anyone owns one can you post here.


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## ctenidae (May 17, 2007)

I still want to see a copy of the letter and of the pass.


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## SkiDork (May 17, 2007)

ctenidae said:


> I still want to see a copy of the letter and of the pass.



yup - I'm going to go to the bank today to get it from the vault


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## jerryg (May 17, 2007)

SkiDork said:


> I'm trying to compile a list of bondholders.  If anyone owns one can you post here.



SkiDork, you are obviously one of people who has been adversly effected by this and although it does not impact me financially, it does imapct me as a lover of the sport and the industry. That is obviously of little consolation to you, but while you compile your list, perhaps it would be good to get a head start. Contact the dude at ASC and ask his take on this. Maybe he would be helpful, maybe not, but it would not hurt to try.

Just another .25 cents.

Jerry


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## SkiDork (May 17, 2007)

jerryg said:


> SkiDork, you are obviously one of people who has been adversly effected by this and although it does not impact me financially, it does imapct me as a lover of the sport and the industry. That is obviously of little consolation to you, but while you compile your list, perhaps it would be good to get a head start. Contact the dude at ASC and ask his take on this. Maybe he would be helpful, maybe not, but it would not hurt to try.
> 
> Just another .25 cents.
> 
> Jerry



I just placed a call to Rick at Basin ski shop -  I want to get his take on things, he's pretty much in the loop when it comes to stuff like this.


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## MikeTrainor (May 17, 2007)

This does not impact me financially either, however it pisses me off. I ski Pico from time to time and I'll tell you I won't anymore. If they want to take this attitude, I will not give them any of my money.


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## Phildozer (May 17, 2007)

JimG. said:


> 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.




I agree.

You paid less but were taking a greater risk for a season pass.  Sorry to hear you lost but that's what happens.  If you want a sure thing, bet against being alive 100 years from now.


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## SkiDork (May 17, 2007)

Phildozer said:


> I agree.
> 
> You paid less but were taking a greater risk for a season pass.  Sorry to hear you lost but that's what happens.  If you want a sure thing, bet against being alive 100 years from now.



No argument here.  BUT, we certainly have the right not to take it lying down and pursue all avenues to try to resolve it.


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## jerryg (May 17, 2007)

Phildozer said:


> I agree.
> 
> You paid less but were taking a greater risk for a season pass.  Sorry to hear you lost but that's what happens.  If you want a sure thing, bet against being alive 100 years from now.



I don't disagree with this in it's entirety, but if the new owners signed an agreement, which gave cause for them to legally honor these passes, then yes, I would raise holy hell - with the understanding that there was indeed risk involved in the initial bond purchase. It never hurts to fight for what you believe to be yours.

I can only say that if I were a new owner, this would not be a move I would make unless I was really strapped for cash and had a legal loophole. Even still, I wouldn't want to come into a new arena in such a manner, but apparently others think it's not bad for them. I think you can surely blame them more than you can admire them. You can do what some have, and blame ASC for the passes being revoked. It's all opinion until the fact are out on paper.


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## tree_skier (May 17, 2007)

Bob R said:


> When Loons passes were messed with I moved and I am selling my place near Loon.
> 
> .




Where did you move to Bob?  A great move would be over to sneaux


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## JPTracker (May 17, 2007)

thetrailboss said:


> This week we have seen all this bad publicity which has come as a result of this decision.  Resorts spend thousands, if not hundreds of thousands, of dollars to create an image which is impacted by a decision like this, which may save what, a few dollars?



Besides the message boards where else have you seen this mentioned.  The number of people that read these boards compared to the number that visit Killington in a year is pretty small. So unless this hits one of the major news sources I doubt it will do much damage to their image.


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## JimG. (May 17, 2007)

JPTracker said:


> Besides the message boards where else have you seen this mentioned.  The number of people that read these boards compared to the number that visit Killington in a year is pretty small. So unless this hits one of the major news sources I doubt it will do much damage to their image.



Word...talk about making a mountain out of a molehill.

Again, I sympathize with the people who lost out on this deal.

But these are the realities of investing in corporations, and make no mistake, this was at least a benefit attached to an investment. It got cashed out because the company who offered it sold out.

And all you K regulars, exactly how will you all benefit by suing your home mountain?


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## thetrailboss (May 17, 2007)

JPTracker said:


> Besides the message boards where else have you seen this mentioned.  The number of people that read these boards compared to the number that visit Killington in a year is pretty small. So unless this hits one of the major news sources I doubt it will do much damage to their image.



I don't think that you can minimize the number of folks who read these boards.  If this place is  not visited by many, then why do resorts spend money advertising here?  Why do industry insiders from Sugarbush and other resorts come here?  I am surprised that you and Jim G downplay the significance of this site.  Is it the NY Times?  No.  Of course not.  

You also need to know that the type of person who reads this is a serious skier/rider.  Word spreads.  The folks who come here are the most committed members of the market.  They ski/ride the most.  Spend the most $$$ on it, etc.      

So is this going to lead to a news article from AZ alone?  No.  So far almost 1,800 people have come to this thread alone.  You may not think that is much, but in my book any bad PR is not good.  Especially for new ownership.


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## SkiDork (May 17, 2007)

I got my passes from the vault.  This is the wording:

=======================================

Killington Ltd.

SHERBURNE VERMONT

PASS

This certifies that SkiDork is the owner of record of Pass Number XXXX, entitling the holder to the free use of all ski lifts operated by Killington Ltd. at Killington Ski Are so long as the corporation shall operate in that area under an agreement with the State Of Vermont.

The Ownership of the pass may be transferred not more than once during the life of the pass.  The transfer must be made upon the books of the corporation in person or by attorney, by surrender of this certificate properly endorsed.

Signed by Allen Wilson


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## ski_resort_observer (May 17, 2007)

TB..I agree with everything you have said except in this case I don't think they are punishing anyone nor are they acting unethically. The company that sold these bonds does not exist anymore. This is what happened at several similar situations in the past. 

I seem to remember when Crotched Mt reopened a few years ago they too did not honor "lifetime passes". Anyone remember that?

If they are sued and the new owners lose then they are dumber than ASC. All the kmart loyalists are waiting with baited breath regarding the new season pass prices. This is the major PR situation coming up.


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## thetrailboss (May 17, 2007)

And for the record another *"Ski Chat Room" * has almost 5,000 hits on this very same thread alone.  I think that is pretty significant.


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## Tin Woodsman (May 17, 2007)

thetrailboss said:


> And for the record another *"Ski Chat Room" * has almost 5,000 hits on this very same thread alone.  I think that is pretty significant.




Yawn.  How many unique viewers?


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## millerm277 (May 17, 2007)

Tin Woodsman said:


> Yawn.  How many unique viewers?



I would guess, from the three forums I know this to be posted on. (Here, SJ, and K-Zone), 1000+ would not be out of the question.


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## MikeTrainor (May 17, 2007)

SkiDork said:


> I got my passes from the vault.  This is the wording:
> 
> =======================================
> 
> ...



Well it looks like in the letter sent out [Sherburne] in parentheses was added as their interpretation.


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## MikeTrainor (May 17, 2007)

Tin Woodsman said:


> Yawn.  How many unique viewers?



You would be surprised how many people read these forums and don't post. I have talked to a number of people that browse this website.


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## snoseek (May 17, 2007)

MikeTrainor said:


> You would be surprised how many people read these forums and don't post. I have talked to a number of people that browse this website.



i hear what your saying. plus people that read and post in these forums are apt to discuss this with other skiers that don't. this all adds up i'm sure.


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## jerryg (May 17, 2007)

snoseek said:


> i hear what your saying. plus people that read and post in these forums are apt to discuss this with other skiers that don't. this all adds up i'm sure.



Exactly. It's like customer service; if you have a good experience, you may or may not tell someone. If you have a bad customer service experience, you tell an average of 5 different people.


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## jerryg (May 17, 2007)

MikeTrainor said:


> Well it looks like in the letter sent out [Sherburne] in parentheses was added as their interpretation.



It would be interesting to see a copy of the exact letter (minus names and addresses) in here somehow. Is it actually on ASC letterhead and signed by someone from ASC or is it frmo Killington and sent out by someone from there. That could make a difference.


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## SkiDork (May 18, 2007)

I'll type it in tomorrow


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## dmc (May 18, 2007)

Tin Woodsman said:


> Yawn.  How many unique viewers?



Exactly...   People crack me up with internet self importance.... this is a great chat board but it's JUST a chat board...

I've setup up programs to inflate post counts before on KChat - I just tested it and I can still do it...  Not here though..
I used to do it on KChat to mess with one of the characters over there..  I've also setup "bots" to post multiple times too to go after one of the moderators that I hate with a passion..  Probably one of the reasons I got put on the "troll" list...  But it was worth it...

Like I said before I feel sorry for a couple of the KChaters...  
But most that are pissed...  Well..  It's karma catching up with their lame asses and I could give a rats ass...
One hand hand bitching about a lifetime pass on the other bragging about owning Corvettes, owning houses up there and blasting others who believe in intitlement just to survive...

I'm actually enjoying this from that respect..


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## dmc (May 18, 2007)

Terry said:


> Whether they can do it legally or not I don't know but it is going to cost them in the end from negative comments, and lost customers. I don't know how many have lifetime passes, but if they all are pissed and give lots of negative advertising about Killington it will lose a lot more money in lost ticket sales than it would ever gain by making these people buy passes!



I don't understand that...

If you love a mountain..  And you dig the terrain...  Why stop going?  BEcause you want to punish some jerk in a suit?  What does that solve?  All it does is punish local businesses...  

This isn't MY fight... It's the fight of a few people that took a risk...  It doesn't concern me except I'm bumbed for Dork and Ty...  I doubt it's going to stop them from going to K either..  They have a lot invested there...

I know this won't stop me from going to K...


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## riverc0il (May 18, 2007)

Bob R said:


> Alot of negitive vibes this year with passes.  Loon, Burke,ASc Pwdr. Interesteing, but not comfortable.


What are the bad vibes with Burke? Prices went up slightly but nothing too big and still within market value based on local competition. Did I miss something?


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## riverc0il (May 18, 2007)

thetrailboss said:


> I don't think that you can minimize the number of folks who read these boards.  If this place is  not visited by many, then why do resorts spend money advertising here?  Why do industry insiders from Sugarbush and other resorts come here?  I am surprised that you and Jim G downplay the significance of this site.  Is it the NY Times?  No.  Of course not.
> 
> You also need to know that the type of person who reads this is a serious skier/rider.  Word spreads.  The folks who come here are the most committed members of the market.  They ski/ride the most.  Spend the most $$$ on it, etc.


The average skier/rider/family that the ski industry counts on probably never visits these types of forums. The few that do probably do not read during the off season and especially not during mid-May when there is boating, golf, home improvement, and kids baseball games to attend. While there certainly are a lot of dedicated skiers on this forum, I don't see that as having much effect on the general population.

How much bashing has Kmart taken in the past? I certainly chuckle a little bit when thinking that a little more Kmart bashing is going to make much different in the big picture. The place already takes a ton of heat. How much ranting and raving on the forums have changed the early/late season at Kmart? Nothing. In a matter of fact, both ends of the season continue to get shorter. Wider trails, less character? Doesn't matter. Bad Customer Service? People were still lining up for the A41. Bumps getting mowed down? Some posters may be hating on the forums, but it hasn't changed anything. In a matter of fact, it is really easy for a casual viewer of a dedicated forum with "hard core" people to dismiss a few hot heads spotting off opinion about an issue that personally effects a few people. How many people does this actually impact? Someone give me a number here. It seems many folks in this thread are jumping on the hating band wagon just because it is so called "bad PR." But as someone else mentioned, whereas are you seeing bad PR? Any where else but a few online forums that a very very small percent of the market follow and even less follow during the off season? This thread may have gotten a lot of hits (as the other ones on other sites), but also as mentioned, probably not a lot of unique visitors. Personally, I have browsed this thread at least once sometimes twice everyday since it was created.

I just don't see this being the issue that it is being played up to be. Sorry for the people that are effected, but as previously stated, the investors rolled the dice on an investment. Hopefully they got their monies worth and some return on their investment, some may have lost out. Most people don't get this worked up when any other investments work out or fail through legitimate and accepted practices. But it seems easier to emphasize with investors loosing out in this case because we are all skiers/riders and share the activity. And as far as the bad PR issue, I say good idea for getting it out of the way with up front. If they wanted to do it, nice to be done with the issue and now they don't have to worry about something in the closet. They can start focusing on some good PR with the ugly stuff done right out of the gate.


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## thetrailboss (May 18, 2007)

riverc0il said:


> What are the bad vibes with Burke? Prices went up slightly but nothing too big and still within market value based on local competition. Did I miss something?



Yes you did.  A 250% increase is not a "slight" increase.  That is how much Burke expects students, College, University, Law, Med, etc. who are over 24 to pay (up from $199-$525).


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## riverc0il (May 18, 2007)

On their web site, I see $525 for a regular pass (very similar to last year, iirc) and $305 for student (up from $200ish last year?). The increase in the student pass is quite large. Interesting they would make such a large jump and leave Jay a huge opening to completely steal the market away with a better product and potentially cheaper price. Last year, Burke was only slightly more expensive than the Jay student pass. Only $199 for the student living in the NEK though.

I think I see... the student pass is only good for those up to age 24. Sorry Boss, I know that stinks for you. Based on BobR's original post, I thought there was a significant increase across the board. How many ski areas offer student discounts to those over 24 going to college?

BTW, Burke's new web site sucks. The fixed vertical pane requires a huge amount of scrolling with a tiny window for reading text and the front page's flash animation covers up the navigation links (on the latest version of FF).


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## bobbutts (May 18, 2007)

riverc0il said:


> ...And as far as the bad PR issue, I say good idea for getting it out of the way with up front. If they wanted to do it, nice to be done with the issue and now they don't have to worry about something in the closet. They can start focusing on some good PR with the ugly stuff done right out of the gate.



I think you are underestimating how sensational this story is.  I expect it to eventually make its way from forums to conventional media.  The headline, "New Killington owners cancel Lifetime Passes" IMO really stings.  My wife who knows nothing of the situation and doesn't care about Killington let out an OMG when I told her about this, which to me is a good indication that the story would be interesting to outsiders.

On another subject, how many resorts have lifetime passes?  Anyone else aware of any others?


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## Greg (May 18, 2007)

bobbutts said:


> I expect it to eventually make its way from forums to conventional media.  The headline, "New Killington owners cancel Lifetime Passes" IMO really stings.



http://www.rutlandherald.com/apps/pbcs.dll/article?AID=/20070518/NEWS04/705180371/1002/NEWS01

Notice the K-zone mention. While ski forums like AZ and K-zone probably only represents a small percentage of actual skier visits, I believe we are a growing and somewhat influential contingent.


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## thetrailboss (May 18, 2007)

riverc0il said:


> On their web site, I see $525 for a regular pass (very similar to last year, iirc) and $305 for student (up from $200ish last year?). The increase in the student pass is quite large. Interesting they would make such a large jump and leave Jay a huge opening to completely steal the market away with a better product and potentially cheaper price. Last year, Burke was only slightly more expensive than the Jay student pass. Only $199 for the student living in the NEK though.



Yep, I have noticed this as well.  Jay and Cannon are going to eat Burke's lunch.  



> I think I see... the student pass is only good for those up to age 24. Sorry Boss, I know that stinks for you. Based on BobR's original post, I thought there was a significant increase across the board. How many ski areas offer student discounts to those over 24 going to college?



Very good question.  Burke is the ONLY major ski area in VT/NH that I have found that has such a low age requirement.  Okemo USED to restrict it to 25 years old.  They have now pushed that limit to 29/30.  So now the only ski areas are Burke and Okemo.  All others simply say that if you have ID and valid verification of enrollment you get the discount.  Ascutney also used to have a low ceiling.  They eliminated that in 2006 in order to get the grad students at Darmouth and VLS.   

For the record to, I might add that Stowe, Sugarbush, MRG, and Killington all actively sell to Vermont Law School students through student agents.  Ascutney, Okemo, Sunapee, and Whaleback have been actively marketing to VLS students as well.  

In 2005 I contacted Burke several times to see if they would like me to sell passes to Dartmouth and VLS students as a student agent.  I never received a response.  They certainly could have made some money...maybe gotten a few students for little effort or money.  I guess they are just not interested.  

Right now Stowe's student pass option (at over $400) is a better value than Burke for me.  That is pretty :blink: and 

I have been in contact with Burke about this.


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## SkiDork (May 18, 2007)

Here's the letter:

=====================================

May 10, 2007

Dear Pass Owner:

You are receiving this letter because our records indicate you currently hold the right to a season pass ("Pass") for the use of the Killington ski lifts as operated by Killington Ltd. (formerly known as the Sherburne Corporation).  As you may already know, we are currently in the process of selling the Killington and Pico Ski Resorts, and contemplate that the consummation of such sale will occur shortly.

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, at 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.

Notwithstanding that your pass benefits will expire upon the sale as noted above, we have been informed by the new owners that they have decided to offer you the following benefits for the next two ski seasons:

1) 2007/2008 ski season: You can obtain a complimentary season pass
1) 2008/2009 ski season: You can obtain a complimentary season pass subject to certain blackout dates as to be determined by the new owners prior to the 2008/2009 season
3) These passes will not be valid for summer or foliage lift access.

We have been informed that the new passes remain subject to the resort's existing policies and procedures.  To obtain your new pass, we have been told that you must present your original certificate and photo identification to the season pass office at Killington on or before October 8, 2007.  Additionally, we understand restrictions on transferability will be as follows:

A. New passes issued to holders of certificates that permitted a single transfer during the lifetime of the Pass holder will remain with the present holder and may not be transferred.

B. New passes issued to holders of certificates that permitted a transfer each year to a new holder may be transferred, however, the Pass holder must select one individual who will be the recipient of that pass for the next two seasons (the 2007/2008 and the 2008/2009 season).  This election must be made in writing to the season pass office at the Killington Resort on or before October 8, 2007, otherwise that pass may not be transferred.

The Bank of New York will not be the transfer agent for the issuance and distribution of new passes.

We appreciate the many years of support that you have provided us and are confident that the new owners will continue to make the Killington and Pico Ski Resorts a premier ski destination on the East Coast.  Any questions about the new owner's program should be addressed to the Killington Season Pass office at (802) 422-6868 (Option #7).

Pleas note: the Killington Season Pass office will be closed until August 6, 2007

Sincerely,

Allen W. Wilson
President


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## ski_resort_observer (May 18, 2007)

This is what I have been able to find out so far about the history of the "lifetime passes" at kmart.

The original lifetime passes issued with the early stock offering in 1957 at $250 a share had a sale inducement of a lifetime pass for each of four shares bought. These original stocks and the accompanying "lifetime" passes are the most coveted as they can be resold every year, most were tied up by the original investors in Killington about 75 investors on record of November 1957.

There is a second type of "lifetime passes" that can only be re-sold once, these  were issued during stock offerings in 1961, 1965 and 1967.

I think Powdr is between a rock and a hard place here. They know that the A41 passes were a financial disaster in that the skier visits dropped nearly 20% from last season(05/06) vs the previous season. No other resort in Vermont except Mt Snow saw such a dramatic drop. Okemo reported a nice increase during the same time period to go past Mt Snow with skier visits topping 600,000 and become the 2nd busiest resort in Vermont. Kmart went with the Walmart business model and it did not work. Alot of longtime kmart skiers who are not so price sensitive went elsewhere.

They have to turn that around and increase the revenue per skier visit to succeed. I guess dropping the lifetime passes is part of that. Obviously the inclusion in the P&A that they continue to honor the LT passes is a sticky wicket that has to be resolved. 

It's pretty easy from where we sit to conclude that allowing the LT passes to continue to be honored is an easy positive PR thing to due but in such a competitive business every dollar counts as evidenced by the hassle we now all have to endure by having our passes scanned everytime we get on a lower lift in the hopes of catching a few people who misuse the system. 

I suspect that the large amount of views is more from people seeking info about season passes than lifetime passes. I also feel that Powdr will not raise season passes to market value next season but try to seek a more common ground approach by pricing them  somewhere between the two prices but after capital improvements are online they will have no choice to go with market value which is around $900 with blackouts and $1200 without.


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## JimG. (May 18, 2007)

thetrailboss said:


> I am surprised that you and Jim G downplay the significance of this site.  Is it the NY Times?  No.  Of course not.



I'm not underestimating the significance of this site...I don't even think about that. 

I downplay the siginificance of this particular event, and I downplay the reaction to it that many of you feel will be extensive.

Plus I'm a moderator and I want to stimulate posting on the topic. Thanks everyone!


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## Greg (May 18, 2007)

I didn't read through this whole thread, but does anyone have any indication how many lifetime passes were issued? The number must be significant for Powdr to risk such ill will, no? I mean is just honoring the passes really going to affect the bottom line all that much?


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## JimG. (May 18, 2007)

Greg said:


> I didn't read through this whole thread, but does anyone have any indication how many lifetime passes were issued? The number must be significant for Powdr to risk such ill will, no? I mean is just honoring the passes really going to affect the bottom line all that much?



Sorry in advance to those who are affected by this, but where is this outpouring of ill will coming from? Like dmc said before, there are many folks who could care less about people who own fancy ski condos and who drive big BMW SUV's north every weekend to ski with the beautiful people losing a lifetime pass.

Come on, let's get real here.


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## skiadikt (May 18, 2007)

ski_resort_observer said:


> This is what I have been able to find out so far about the history of the "lifetime passes" at kmart.
> 
> The original lifetime passes issued with the early stock offering in 1957 at $250 a share had a sale inducement of a lifetime pass for each of four shares bought. These original stocks and the accompanying "lifetime" passes are the most coveted as they can be resold every year, most were tied up by the original investors in Killington about 75 investors on record of November 1957.
> 
> There is a second type of "lifetime passes" that can only be re-sold once, these  were issued during stock offerings in 1961, 1965 and 1967.



... 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.


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## Greg (May 18, 2007)

JimG. said:


> Sorry in advance to those who are affected by this, but where is this outpouring of ill will coming from? Like dmc said before, there are many folks who could care less about people who own fancy ski condos and who drive big BMW SUV's north every weekend to ski with the beautiful people losing a lifetime pass.
> 
> Come on, let's get real here.



Whether it's justified or not, there is ill will, at least online...  But now we have the Rutland Herald article so it's made its way into the mainstream media. Perhaps Powdr didn't anticipate such fall-out?


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## JimG. (May 18, 2007)

Greg said:


> But now we have the Rutland Herald article so it's made its way into the mainstream media. Perhaps Powdr didn't anticipate such fall-out?



I'm sure they did and appreciate that we all continue to rack up the post count. Who knows, maybe the NY Times next?

Brilliant!


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## Greg (May 18, 2007)

JimG. said:


> I'm sure they did and appreciate that we all continue to rack up the post count. Who knows, maybe the NY Times next?
> 
> Brilliant!



Any publicity is good publicity?


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## ctenidae (May 18, 2007)

Greg said:


> Any publicity is good publicity?




I was going to say that, in this case, that may not be true. 

I'm really only interested because of the insight this gives into the minds of the new owners, SEC filing regulations, and that sort of thing. It's also a good look at "going private" transactions, and some of the problems they entail.


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## JimG. (May 18, 2007)

Greg said:


> Any publicity is good publicity?



It's bad publicity only if alot of folks really care about the issue...those folks are probably concentrated here more than most places since it is a ski forum. The "outcry" here seems pretty small to me...the discussion is mostly about legal issues.

But out in the real world? There aren't enough skiers who really care about this to make it bad publicity.


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## thetrailboss (May 18, 2007)

Greg said:


> I didn't read through this whole thread, but does anyone have any indication how many lifetime passes were issued? The number must be significant for Powdr to risk such ill will, no? I mean is just honoring the passes really going to affect the bottom line all that much?




To answer your question approximately 250.  Many are folks from KZone and many are local business people on the Access Road who have some clout and some say.


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## ctenidae (May 18, 2007)

thetrailboss said:


> To answer your question approximately 250.  Many are folks from KZone and many are local business people on the Access Road who have some clout and some say.



...who _HAD_ some clout and some say, you mean.


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## SkiDork (May 18, 2007)

thetrailboss said:


> To answer your question approximately 250.  Many are folks from KZone and many are local business people on the Access Road who have some clout and some say.




I'm not so sure that number is correct.  That may be the number of _original multi-transferrable_ bonds, but there were subsequent single transfer bonds issued which are also in this same situation, if you add those the number is probably significantly higher.


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## Greg (May 18, 2007)

Looks like the AP got it:

http://news.google.com/news?hl=en&ned=us&ie=UTF-8&q=killington+lifetime+passes&btnG=Search


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## threecy (May 18, 2007)

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!


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## SkiDork (May 18, 2007)

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.


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## JimG. (May 18, 2007)

threecy said:


> 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.


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## thetrailboss (May 18, 2007)

threecy said:


> 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.


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## ski_resort_observer (May 18, 2007)

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?


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## thetrailboss (May 18, 2007)

ski_resort_observer said:


> 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.


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## madskier6 (May 18, 2007)

SkiDork said:


> 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).


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## thetrailboss (May 18, 2007)

madskier6 said:


> 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.


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## jerryg (May 18, 2007)

JimG. said:


> 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.


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## JimG. (May 18, 2007)

skiadikt said:


> ... 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...


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## jerryg (May 18, 2007)

JimG. said:


> 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!


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## JimG. (May 18, 2007)

jerryg said:


> 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?


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## ski_resort_observer (May 18, 2007)

> 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.


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## SkiDork (May 18, 2007)

ski_resort_observer said:


> 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


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## thebigo (May 18, 2007)

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


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## madskier6 (May 18, 2007)

thetrailboss said:


> 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.


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## andyzee (May 18, 2007)

thetrailboss said:


> 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.


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## threecy (May 18, 2007)

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"


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## MikeTrainor (May 18, 2007)

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


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## jerryg (May 18, 2007)

threecy said:


> 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:


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## JimG. (May 18, 2007)

MikeTrainor said:


> 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.


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## jerryg (May 18, 2007)

JimG. said:


> 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.



We reached that threshold with Anna Nicole Smith stories or Tomcat, but yes, you are correct.


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## thetrailboss (May 18, 2007)

JimG. said:


> 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.



Some of that bad PR that IIRC you said was never going to leave the chatrooms. :wink:  Rutland Herald, AP, and now Boston Globe.  Only upside for POWDR/SP is that it is Friday afternoon and most folks know that the "bad news" comes out now because nobody is paying attention.


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## JimG. (May 18, 2007)

thetrailboss said:


> Some of that bad PR that IIRC you said was never going to leave the chatrooms. :wink:  Rutland Herald, AP, and now Boston Globe.  Only upside for POWDR/SP is that it is Friday afternoon and most folks know that the "bad news" comes out now because nobody is paying attention.



trailboss, I never said that either...I said nobody would care and because nobody would care that it would not seriously effect Killington skier visits. It's not bad press unless there is a significant group of individuals who agree it's really bad.

So far, I've seen no uprising of more than usual anti-Killington sentiment; in fact, POWDR/SP did figure one thing out...nobody is bitching about Killington not staying open until June like we usually hear endlessly right about now.

So give them some credit!


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## riverc0il (May 18, 2007)

I will concede to Mr. bobbutts that the in print media has picked up the story. I still doubt there is going to be much fall out regarding the general skiing population... especially if someone researches the issue and finds out what is really going on. Let's keep in mind that the season pass was a "benefit" as part of an investment. Also of note is that Powdr is allowing stake holders to have two more seasons of free passes. I would be surprised if many people are not breaking even if not having made back a good deal of their investment based on the season pass alone.


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## Breeze (May 18, 2007)

late to the table but have been listening,and don't have a dog in the fight. 

Playing Devils advocate here, so take that into your consideration from whatever avenue you approach.  Client/consumer relations should never be a dead end for any business, if you need to give bad news, be prepared to suck it up down the road. 

Why would the new Owners of K stand still for  discounted season passes being sold up and down the access road ( off premise and out of K's control)?  Does K get  ANY bucks for maintaining their database, collecting the signatures for liability release and disclosure of terms?   It is the resort that has to stay on top of paperwork, not the seller of the transferrable pass.   Where is the "agency" if the pass is transferred in a private sale?  Is the seller going to get a  liability waiver from the buyer?? or will that devolve to the Resort?  

It is not just free skiing at the heart of the matter. 

I'm sympathetic to both sides of this issue.  I Hope it works out amicably,  K probably has some wiggle room but are testing their limits. 

Keep on  keeeping on, If you are negatively affected, don't give up the ship. Present your case. 

Breeze


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## Lostone (May 18, 2007)

K-Mart will not make a penny off canceling the lifetime passes unless some of the people that own those passes buy tickets or passes there.

If those people take their business elsewhere, the only thing that K-mart would have gained is the PR.

I agree that they are known as a resort that is known for bad customer service, but I would think someone buying the resort would want that not to be the case, for their reign.


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## MikeTrainor (May 18, 2007)

thetrailboss said:


> Some of that bad PR that IIRC you said was never going to leave the chatrooms. :wink:  Rutland Herald, AP, and now Boston Globe.  Only upside for POWDR/SP is that it is Friday afternoon and most folks know that the "bad news" comes out now because nobody is paying attention.



It is now the 3rd most emailed story, so I guess it is of interest to the general population. I guess it is to their advantage to get it out now since most people will not likely remember it or care come November.


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## threecy (May 18, 2007)

jerryg said:


> 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:



From the post of the passholder agreement earlier in this thread, I read that as lifetime of the corporation.  If I were a passholder, I'd try to read it as my lifetime...but even that doesn't matter, if you're able to transfer it!  Keep the pass till you're 70, then transfer it to your 4 year old grandchild!

The buyer should not have to pay the consequences of a poor business decision by a corporation that has been dissolved.

Again, this was NOT a stock transfer!  ASC owned the corporation and was paid cash for the assets.  As a result, they assume certain liabilities for their time in charge.  If I were a passholder, I would be going after them, not Powdr, for not ensuring my pass would continue.


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## bill2ski (May 18, 2007)

Q ;

" How do you know when the property next door has been bought by someone from away?

A ;

They build a fence


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## jerryg (May 18, 2007)

threecy said:


> From the post of the passholder agreement earlier in this thread, I read that as lifetime of the corporation.  If I were a passholder, I'd try to read it as my lifetime...but even that doesn't matter, if you're able to transfer it!  Keep the pass till you're 70, then transfer it to your 4 year old grandchild!
> 
> The buyer should not have to pay the consequences of a poor business decision by a corporation that has been dissolved.
> 
> Again, this was NOT a stock transfer!  ASC owned the corporation and was paid cash for the assets.  As a result, they assume certain liabilities for their time in charge.  If I were a passholder, I would be going after them, not Powdr, for not ensuring my pass would continue.



Except they were not paid cash for this particular asset. In the initial 14c, it outlines every asset and how much was being paid for it. The only difference in the cost from that statement (Where it noted that the Buyer had to honor the passes) was $2.9 million for taxes and closing costs.


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## threecy (May 18, 2007)

jerryg said:


> Except they were not paid cash for this particular asset. In the initial 14c, it outlines every asset and how much was being paid for it. The only difference in the cost from that statement (Where it noted that the Buyer had to honor the passes) was $2.9 million for taxes and closing costs.



I'm referring to the overall transaction, which is "the sale of the Killington and Pico ski areas to SP Land Company, LLC for cash consideration of $83.5 million"

It amazes me how people still seem to be mad at Powdr and not ASC.  Remember, up until the paperwork is signed, it is the duty of ASC to do what's in the best interest of their shareholders.  Thus, not ensuring certain provisions of lifetime passholders (some of whom are shareholders apparently), is ASC's problem, NOT Powdr's.


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## jerryg (May 18, 2007)

threecy said:


> I'm referring to the overall transaction, which is "the sale of the Killington and Pico ski areas to SP Land Company, LLC for cash consideration of $83.5 million"
> 
> It amazes me how people still seem to be mad at Powdr and not ASC.  Remember, up until the paperwork is signed, it is the duty of ASC to do what's in the best interest of their shareholders.  Thus, not ensuring certain provisions of lifetime passholders (some of whom are shareholders apparently), is ASC's problem, NOT Powdr's.



So then why would they put into the contract that the lifetime passes were to be honored? That has to be amended after it is filed with the SEC. If it is amended, it is by BOTH parties. We don't know what the final paperwork says, but SP/Powdr may just have decided to do this. Who's to say ASC even knew? You don't know that. The final paperwork may have been signed by them or SP prior to the 10th. The legal date is the 11, which was also the SEC filing date, but such minor thing (Financiall, between the Buyer and Seller) could have easily been overlooked if someone wanted to play dirty. 
And since when would it matter if it was up to ASC to do what's in the best interest of shareholders? I doubt they really care outside of the preferred shareholders, who are on the board.
All that being said, if this was done to benefit ASC, then two things would not have been included in the same contract. 
1.) the sale price of $83.5 
and 
2.) the covenant that says the Buyer is to honor the lifetime passes.   
If ASC planned to disolve the agreement themselves, there would have been further cash consideration, which there was not. In NO WAY has this been beneficial to ASC.

You're right, it may very well not be Powdr who is to blame, it may be SP or it may even be Killington Mgt. (A. Smith) without the consideration of any other party.

Who knows? Maybe some laws were even broken! Wow!


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## threecy (May 19, 2007)

It's still hard to exactly what happened here, but a) ASC must have had some knowledge the passes wouldn't be honored anymore since they sent the letter and b) Powdr must have some legal standing to be willing to do this.

A corporation must do what's best for all of its shareholders, not just preferred shareholders.

Again, based upon what I've seen, I don't think the new owners should be blamed.  I think, of the two parties, ASC holds more responsibility in this issue.

That said, the blame should be put on the industry in general.  Due in part to the seasonality of the business, the northeast ski industry doesn't think too far ahead - it gives away way too many vouchers, too many coupons, and too many poorly thought out passes.


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## jerryg (May 19, 2007)

threecy said:


> It's still hard to exactly what happened here, but a) ASC must have had some knowledge the passes wouldn't be honored anymore since they sent the letter and b) Powdr must have some legal standing to be willing to do this.
> 
> A corporation must do what's best for all of its shareholders, not just preferred shareholders.
> 
> ...



I fully understand where you are coming from, I just disagree, which I suppose is part of the reason topics are discusses. As for who is behind this, Powdr has said they are the ones who terminated the passes. ASC cannot be blamed for that. All the articles are the same, with the guy from Powdr defending their position.


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## BeanoNYC (May 19, 2007)

Sounds like a pyramid scheme that collapsed...not that it is, but some innocent people are left holding the bag.


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## kbroderick (May 20, 2007)

Lostone said:


> K-Mart will not make a penny off canceling the lifetime passes unless some of the people that own those passes buy tickets or passes there.



...which probably will happen, assuming that there is a large number of folks buying the yearly-transferable passes from access road business owners and the like.  Given what we've heard on this thread so far, the passholders seem to be:
a) people who invested in the company a long time ago and were issued passes as a benefit of that investment (also a while back), many of whom sell the transferable benefit for profit each year (at a price below Killington's early-season price)
b) people who invested but have kept the pass benefit for themselves or their family
c) people who have more recently purchased the pass benefit for long-term personal use

I'd guess that groups (b) and (c) are the ones most likely to be annoyed (particularly group c), as group a should have already made plenty of profit and be looking at this from a business perspective.  I'd have to guess that Powdr would've considered honoring the passes if it was just the latter groups.  However, group a is operating in direct competition with Powdr except that they have virtually no overhead; if the numbers theorized elsewhere in this thread are at all accurate, then the money brought in by group a--money that most likely _will_ go to Powdr in the form of pass or ticket sales once those lifetime passes cannot be resold--is significant and probably outweighs the annoyance caused to groups b and c.


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## lifetimeskier (May 22, 2007)

*Killington Lifetime passes*

I would like to know if JimG, "the moderator" works for or is in any way compensated by Killington.  
    This (SP Land/Powdr and ASC) is reminding me of a company that makes a product they know will hurt people.  Their analysis shows them they will earn $20 million in profits and only have to pay out $2 million in lawsuits, so they go ahead and make/sell the harmful product.  Is that ethical behaviour, that should be justified as good business?
    It was SP Land Co/Powdr's choice to not honor the lifetime passes (ones which the holders certainly seem to have been led to believe went with their lifetime and not the lifetime of Sherburne Corp which hasn't really existed in a long time).  It was certainly no secret that the passes exist.  Killington ski area may never have gotten off the ground without such passes.  Maybe SP Land/Powdr should have paid ASC less $ for Killington and behaved in a responsible/good faith manner as their first step, if they felt the passes were a costly liablity.  Maybe SP Land/Powdr should go after the $3 million held in escrow and honor their obligation to the passholders.  Maybe if the language in the SEC filed Purchase agreement had not stated that the lifetime passes would be honored, many of us would have asked more questions earlier and gotten involved in the transfer of the land lease with the State of Vermont.
    How insulting to these loyal Killington people to drop this bomb, then say in the letter, if you have any questions call the season pass office which isn't open until August.  I have tried to call Killington, but I can't get anyone (they are on vacation for a month), except in sales and reservations.  Even though I did leave a message for Chris Nyberg (who is physically present in Killington), he has not returned my phone call.
    The ski community is very linked around the country, if not the world, and SP Land/Powdr seems to have underestimated the passion many of us have for the sport.  Of course word would spread of SP Land/Powdr's bad faith.  Here in VT there are several other decent ski areas ~ an hour's drive from Killington.  Many of us will ski at the other areas, as will the family and friends who used to come here and buy tickets or passes because we skied at Killington.


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## BeanoNYC (May 22, 2007)

lifetimeskier said:


> I would like to know if JimG, "the moderator" works for or is in any way compensated by Killington.



LMAO.  If Jim has skied KMart 2 times this season, thats a lot.  He's a Hunter faithful.  Don't mistake his candidness for bias.


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## thetrailboss (May 22, 2007)

lifetimeskier said:


> The ski community is very linked around the country, if not the world, and SP Land/Powdr seems to have underestimated the passion many of us have for the sport.  Of course word would spread of SP Land/Powdr's bad faith.  Here in VT there are several other decent ski areas ~ an hour's drive from Killington.  Many of us will ski at the other areas, as will the family and friends who used to come here and buy tickets or passes because we skied at Killington.



This is similar to my POV as well.  Why do you punish loyal customers?  Without customers, or $$$, there is no company.


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## threecy (May 22, 2007)

lifetimeskier said:


> I would like to know if JimG, "the moderator" works for or is in any way compensated by Killington.
> This (SP Land/Powdr and ASC) is reminding me of a company that makes a product they know will hurt people.  Their analysis shows them they will earn $20 million in profits and only have to pay out $2 million in lawsuits, so they go ahead and make/sell the harmful product.  Is that ethical behaviour, that should be justified as good business?
> It was SP Land Co/Powdr's choice to not honor the lifetime passes (ones which the holders certainly seem to have been led to believe went with their lifetime and not the lifetime of Sherburne Corp which hasn't really existed in a long time).  It was certainly no secret that the passes exist.  Killington ski area may never have gotten off the ground without such passes.  Maybe SP Land/Powdr should have paid ASC less $ for Killington and behaved in a responsible/good faith manner as their first step, if they felt the passes were a costly liablity.  Maybe SP Land/Powdr should go after the $3 million held in escrow and honor their obligation to the passholders.  Maybe if the language in the SEC filed Purchase agreement had not stated that the lifetime passes would be honored, many of us would have asked more questions earlier and gotten involved in the transfer of the land lease with the State of Vermont.
> How insulting to these loyal Killington people to drop this bomb, then say in the letter, if you have any questions call the season pass office which isn't open until August.  I have tried to call Killington, but I can't get anyone (they are on vacation for a month), except in sales and reservations.  Even though I did leave a message for Chris Nyberg (who is physically present in Killington), he has not returned my phone call.
> The ski community is very linked around the country, if not the world, and SP Land/Powdr seems to have underestimated the passion many of us have for the sport.  Of course word would spread of SP Land/Powdr's bad faith.  Here in VT there are several other decent ski areas ~ an hour's drive from Killington.  Many of us will ski at the other areas, as will the family and friends who used to come here and buy tickets or passes because we skied at Killington.



Just so its out in the open, I have never worked (nor currently work) for Killington, ASC, or SP/Powdr.  Quite frankly, Killington is one of my least favorite ski areas.

Yes, it's a rotten situation.  However, it appears there is language in the contracts/agreements that allow SP/Powdr to make a conclusion that they are not under an obligation to honor these passes.  In addition, the language is strong enough to allow ASC to confirm this in the form of the letter they sent out.

Let's assume SP/Powdr cannot be legally forced to honor or refund these passes.

Which ethics are more important - honor passholders passes that SP/Powdr never sold or collected compensation from or honor shareholders who would otherwise be forfeiting millions of dollars worth of services.

If SP/Powdr honors these passes (again, previous assumption in place), the value of skiing at Killington drops.  Some paying passholders will be unhappy that others are getting free or heavily (if that bit about people reselling their lifetime passes every year is true) discounted passes.  Shareholders will be unhappy that they are giving away millions of dollars of skiing for nothing.  Those who have the lifetime passes and are mad at SP/Powdr will still be mad at SP/Powdr and will still badmouth them.

If SP/Powdr doesn't honor those passes, many who wouldn't be paying SP/Powdr for season passes still won't and will ski elsewhere.  Others will buy a normal priced pass after the free period expires.  Paying passholders will not feel that their getting as bad of a deal in comparison to 'freebies.'  Shareholders will be happy that they are getting compensated for the product they sell.  Those who have the lifetime passes and are mad at SP/Powdr will still be mad at SP/Powdr and will still badmouth them.

If I were SP/Powdr, I'd go with option 2.


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## SkiDork (May 22, 2007)

threecy said:


> Just so its out in the open, I have never worked (nor currently work) for Killington, ASC, or SP/Powdr.  Quite frankly, Killington is one of my least favorite ski areas.
> 
> Yes, it's a rotten situation.  However, it appears there is language in the contracts/agreements that allow SP/Powdr to make a conclusion that they are not under an obligation to honor these passes.  In addition, the language is strong enough to allow ASC to confirm this in the form of the letter they sent out.
> 
> ...




ummmm - this has been going on for many years.  Why would "normal" season pass buyers suddenly take exception to it?


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## ski_resort_observer (May 22, 2007)

The last time kmart had "normal" season pass prices was about 200,000+ skier days ago. While it is true that most season pass holders probably did not know much about LT passes until this issue came up I cannot think of any logical reason why they would care from a big picture perspective. 

Conversly, if they do end up raising the season pass prices sharply, say $1000, and the LT passes would continue to honored, I am sure some season pass holders who care about every dollar that  might leave their wallet might have a problem with that scenerio.

If Powdr decided to only raise the season passes to $600 perhaps the howling by the LT pass folks would be drowned out or at least greatly softened by the loud praise bestowed upon the new owners. Hmmmm...maybe this issue will end up helping kmart's loyal pass holders. They need a big positive PR boost. Then again...maybe not. :lol:


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## JimG. (May 23, 2007)

lifetimeskier said:


> I would like to know if JimG, "the moderator" works for or is in any way compensated by Killington.
> This (SP Land/Powdr and ASC) is reminding me of a company that makes a product they know will hurt people.  Their analysis shows them they will earn $20 million in profits and only have to pay out $2 million in lawsuits, so they go ahead and make/sell the harmful product.  Is that ethical behaviour, that should be justified as good business?
> It was SP Land Co/Powdr's choice to not honor the lifetime passes (ones which the holders certainly seem to have been led to believe went with their lifetime and not the lifetime of Sherburne Corp which hasn't really existed in a long time).  It was certainly no secret that the passes exist.  Killington ski area may never have gotten off the ground without such passes.  Maybe SP Land/Powdr should have paid ASC less $ for Killington and behaved in a responsible/good faith manner as their first step, if they felt the passes were a costly liablity.  Maybe SP Land/Powdr should go after the $3 million held in escrow and honor their obligation to the passholders.  Maybe if the language in the SEC filed Purchase agreement had not stated that the lifetime passes would be honored, many of us would have asked more questions earlier and gotten involved in the transfer of the land lease with the State of Vermont.
> How insulting to these loyal Killington people to drop this bomb, then say in the letter, if you have any questions call the season pass office which isn't open until August.  I have tried to call Killington, but I can't get anyone (they are on vacation for a month), except in sales and reservations.  Even though I did leave a message for Chris Nyberg (who is physically present in Killington), he has not returned my phone call.
> The ski community is very linked around the country, if not the world, and SP Land/Powdr seems to have underestimated the passion many of us have for the sport.  Of course word would spread of SP Land/Powdr's bad faith.  Here in VT there are several other decent ski areas ~ an hour's drive from Killington.  Many of us will ski at the other areas, as will the family and friends who used to come here and buy tickets or passes because we skied at Killington.



No, I am not affiliated with Killington in any way. Just stating my opinions.

But it sounds like you have a vested interest...and I have already apologized in advance for your hardship.

And I would do the same if I was in your position...vote with my dollars and ski elsewhere.

Maybe all of your friends will stop skiing at Killington...but I still doubt the total number of such defections will seriously impact Killington financially. 

JMHO.


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## JimG. (May 23, 2007)

BeanoNYC said:


> LMAO.  If Jim has skied KMart 2 times this season, thats a lot.  He's a Hunter faithful.  Don't mistake his candidness for bias.



Actually, it was once...on 4/29.

But I drive by it sometimes on my way to MRG, Sugarbush and points further north.


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## bobbutts (May 23, 2007)

threecy said:


> giving away millions of dollars of skiing for nothing
> 
> ....honor passholders passes that SP/Powdr never sold or collected compensation from or honor shareholders who would otherwise be forfeiting millions of dollars worth of services.



Here is your flawed logic.
1.  No money is being given to anyone.
2.  The obligation is not "For Nothing", it is clearly compensation for getting the mountain off the ground.  This is like saying that my parents have 'nothing' to do with me.  rubbish
3.  "Honoring" the share holders may or may not be best achieved by allowing the passes to remain valid.  This however is not an ethical decision, it's pure business.  The (un)ethical decision was choosing to work around the wording of the lifetime contract.


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## threecy (May 23, 2007)

bobbutts said:


> Here is your flawed logic.
> 1.  No money is being given to anyone.
> 2.  The obligation is not "For Nothing", it is clearly compensation for getting the mountain off the ground.  This is like saying that my parents have 'nothing' to do with me.  rubbish
> 3.  "Honoring" the share holders may or may not be best achieved by allowing the passes to remain valid.  This however is not an ethical decision, it's pure business.  The (un)ethical decision was choosing to work around the wording of the lifetime contract.



1 - Not really.  ASC recieved money from the sale.  Powdr/SP recieved no money from these passholders AND paid fair market value for the resort, without these debts worked into it, as far as I have seen anyways.  It makes little sense to me why they should take the blow and the criticism.  Allowing a person to ski costs the ski area money.

2 - Right, but in this case, the parents have died (old corps) and the legal guardians who took over (ASC) sold the family house to SP/Powdr.  Should the child be allowed to sleep in that house still?  It's your childhood house that the parents built.

3 - Just because a decision is made for the best interest of the business doesn't mean its not ethical.  Right now, it seems there are two parties who will lose money/good/services - the lifetime passholders from a previous corporation and the shareholders of the current corporation.  If the new corporation is doing everything by the book (legally), why should its shareholders have to take the blow?  Let the passholders deal with the people holding their cash (which seems to be ASC).


Maybe SP/Powdr should honor the passes - and let the lifetime passholders ride the lifts that were built or in place when they received their passes and ski the trails that were open when they received their passes.

The whole situation stinks and I do have some sympathy for the passholders - but it seems rediculous that so many people are yelling at SP/Powdr and not ASC, who was paid cash for what these passholders' investments went toward.


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## tree_skier (May 23, 2007)

It's time to stop crying and get over it.  For the the original pass holders it was a great deal, 46 years of skiing for $1000 or x many years plus whatever they sold it for.  For someone who bought one last month not so good a deal.  But we heard alot of "I wish ASC would sell killington" from the same people who are now complaining about the results.  If it is legal I think it is a good decision and they are being very generous with the offer for 2 years.


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## JimG. (May 23, 2007)

tree_skier said:


> It's time to stop crying and get over it.  For the the original pass holders it was a great deal, 46 years of skiing for $1000 or x many years plus whatever they sold it for.  For someone who bought one last month not so good a deal.  But we heard alot of "I wish ASC would sell killington" from the same people who are now complaining about the results.  If it is legal I think it is a good decision and they are being very generous with the offer for 2 years.



You must represent Killington!

Just kidding and I agree with you.

As for the thought that these lifetime passholders are powerful people on the Killington town board and who own businesses on the access road, so what? Are they going to be able to keep their businesses afloat if they drive POWDR/SP and Killington under? Do they realize the reason they have power and business is because the ski area exists? Are they going to kill the goose that laid their golden egg? Will they benefit by rejecting any plans POWDR/SP has out of spite?

I think not. Come October this will be forgotten and we will again hear from many of the same folks about how Killington should open earlier. Maybe POWDR/SP will surprise a few people and try to open earlier than recently and we'll be discussing that.


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## thetrailboss (May 23, 2007)

threecy said:


> 1 - Not really.  ASC recieved money from the sale.  Powdr/SP recieved no money from these passholders AND paid fair market value for the resort, without these debts worked into it, as far as I have seen anyways.



Just to clarify....the deal initially included some debt.  Whether it was the passes is not clear.  I think you were driving at that latter point....


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## Geoff (May 25, 2007)

thebigo said:


> 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



It makes complete sense that the Salt Lake Tribune would pick this up.  The American Skiing Company executives sit in Park City.  The new owners of Killington bought the assets from ASC-owned corporations (Sherburne Corp and Killington, Ltd).  The new owners also got the state of Vermont to transfer the land lease over to them.  The contract for these lifetime passes is between the individual and the Sherburne Corporation.  That makes ASC on the hook for breach of contract.  

If you look at the SEC documents, there is a $3 million escrow account tied to this deal.  If no claims are made by the new owners, the money goes to ASC.  If I held a lifetime pass, I'd be going after a slice of that money and I imagine the Vermont Attorney General's office is taking a hard look at this right now.  It's poetic justice that ASC gets $3 million taken from them as their final kick in the pants out of the state of Vermont.

The other 'fact' here is that the letters to the lifetime passholders were sent by Allen Wilson before the sale.  He worked for ASC, not the new owners and was kicked out the door when the deal was done.  The new owners had nothing to do with this and it was actually pretty good PR to offer those people 2 years of skiing.


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## JimG. (May 25, 2007)

Geoff said:


> It makes complete sense that the Salt Lake Tribune would pick this up.  The American Skiing Company executives sit in Park City.  The new owners of Killington bought the assets from ASC-owned corporations (Sherburne Corp and Killington, Ltd).  The new owners also got the state of Vermont to transfer the land lease over to them.  The contract for these lifetime passes is between the individual and the Sherburne Corporation.  That makes ASC on the hook for breach of contract.
> 
> If you look at the SEC documents, there is a $3 million escrow account tied to this deal.  If no claims are made by the new owners, the money goes to ASC.  If I held a lifetime pass, I'd be going after a slice of that money and I imagine the Vermont Attorney General's office is taking a hard look at this right now.  It's poetic justice that ASC gets $3 million taken from them as their final kick in the pants out of the state of Vermont.
> 
> The other 'fact' here is that the letters to the lifetime passholders were sent by Allen Wilson before the sale.  He worked for ASC, not the new owners and was kicked out the door when the deal was done.  The new owners had nothing to do with this and it was actually pretty good PR to offer those people 2 years of skiing.



Great post Geoff. I hope everyone who is crucifying POWDR/SP reads it.

To me, the ultimate injustice would be if the passholders went after POWDR/SP and it totally ruined any efforts they hoped to make to improve Killington. Going after the new owners when again ASC is to blame would be just plain wrong.


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## ski_resort_observer (May 25, 2007)

I agree with you guys...this thing is being blown way out of purportion and due to media hype is taking on a life of it's own. My father-in-law bought 2 back in 1961, he just shrugs his shoulder and says he got alot of skiing for himself and his kids for $2000, enough said.

I believe Powdr was well aware of the flak they would take over this but decided to focus on the skiers that make up the 800,000 skier days rather than the 1200 who if they ski 30 days a season make up 36,000 skier days. They also know they need to recapture the 200,000+ that have gone on to whiter pastures in the past 3 seasons..

I do empathize with the LT pass folks but only to a point which was passed a few days ago from what I have read on some of the other forums.

Too bad about Allen Wilson, he was a great manager having gone to kmart from the Bush in the mid 90's. I am sure he will have no problem finding a place at another resort if he wants to.


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## dmc (May 25, 2007)

BeanoNYC said:


> LMAO.  If Jim has skied KMart 2 times this season, thats a lot.  He's a Hunter faithful.  Don't mistake his candidness for bias.



Jim is just the kinda guy that will tell you what you don't wwant to hear... The truth...


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## tcharron (May 25, 2007)

In the end, if ASC just liquidates itself, all of this will be a moot point, however.

If I'm contractually obligated to provide you with something, and I die..  STBY..

But yes, the holder should, if they feel they are being ripped, simply demand reperations/sue.


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## Geoff (May 26, 2007)

tcharron said:


> In the end, if ASC just liquidates itself, all of this will be a moot point, however.
> 
> If I'm contractually obligated to provide you with something, and I die..  STBY..
> 
> But yes, the holder should, if they feel they are being ripped, simply demand reperations/sue.




Right.  But there is a $3 million escrow account for the sale of Killington.  ASC can't get the money for another 13 months (June 2008 as I recall).  There are still assets in the State of Vermont people can go after.


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## Geoff (May 26, 2007)

ski_resort_observer said:


> Too bad about Allen Wilson, he was a great manager having gone to kmart from the Bush in the mid 90's. I am sure he will have no problem finding a place at another resort if he wants to.



With all the issues with both the town of Killington and Killington employees, Alan Wilson had to go.  It wasn't his fault ASC put Killington on an austerity budget though the ski patrol went union before the real belt tightening happened.  Every rank & file employee I know did nothing but bitch about management and the owners for the last half-dozen years.  It wasn't his fault that $350 Bronze passes made it nearly impossible to retain much of their part time weekend/holiday staff.  It wasn't his fault that SP Land and Killington tried 6 months ago to convince the town to let them build condos without building the village.

However...  There are a lot of things that went seriously bad under his management.  I can accept reduced snowmaking but there is no excuse for their shoddy snowmaking quality control.  I've never seen so many wet guns and never done so many death slides down the face of icy snowmaking whales.  Lift ops was just plain inept and all the fixed grip lifts started and stopped all the time due to poorly trained lift attendants.  It's a ski resort.  Get me up the hill without 15 minutes of delays.  Give me a good skiing surface when there's no natural snow.


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## jerryg (May 27, 2007)

Out of pure curiousity, came someone with an objective opinion explain how this could have been best resolved prior to the finalizing of the sale. I understand that most people are of the mind that it is ASC's fault that the LT passes were discontinued and then there are people who say it is SP's fault that the passes were discontinued.

If there was never any intent for the LT passes to continue to be honored, how would this have been addressed in a more ethical way? (Going on the popular assumption that there was malice involved) Should ASC have received say, $1.5 million less for the sale and then let SP deal with the passes? Should the passes continue to be honored with the former owner paying for them? Should there have been some formal transfer of responsibility of dealing with this issue, prior to the closing?

I can certainly see why folks would blame either party for this, but I have a really hard time blaming one side. SP/Powdr could have easily addressed with with ASC and had wording put into the sale that indicated they had no responsibility for the LT passes? That would have made it impossible for anyone to blame them. Wouldn't that make sense if this wasn't their decision? If ASC was selling K, why would they care if the passes were honored? Once the sale goes through, they have no fiscal ties to the passes unless people are trying to say that the Sherburne Corp was never really dissolved and that whereas Powdr doesn't need to pay for the LT passes, ASC does. That doesn't sound like a business decision that either party would have wanted to make. It doesn't make any sense.

It seems that the real issue here might be that neither party thought this would have been an issue at all. If they did, one would think that the new owner would want it addressed so they don't look like the bad guy. I doubt they would go into this thinking that it wouldn't metter 'cause everyone will just blame ASC.

There is no way that blame can be placed on ASC without placing blame on SP, if not merely for poor planning.


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## Geoff (May 27, 2007)

jerryg said:


> Out of pure curiousity, came someone with an objective opinion explain how this could have been best resolved prior to the finalizing of the sale. I understand that most people are of the mind that it is ASC's fault that the LT passes were discontinued and then there are people who say it is SP's fault that the passes were discontinued.
> 
> If there was never any intent for the LT passes to continue to be honored, how would this have been addressed in a more ethical way? (Going on the popular assumption that there was malice involved) Should ASC have received say, $1.5 million less for the sale and then let SP deal with the passes? Should the passes continue to be honored with the former owner paying for them? Should there have been some formal transfer of responsibility of dealing with this issue, prior to the closing?
> 
> ...



The new owners bought the assets from Sherburne Corp/Killington, Ltd and had the lease transfered over to their corporation.  You would only do that if you were trying to avoid the liabilities created by the previous corporation.  The lifetime passes are the only liability I'm aware of though with 50 years of maintaining diesel-powered machinery, environmental liability due to soil contamination might also have been a motivation.

Alan Wilson of ASC sent out the letters informing people that the lifetime passes were going away.  This was clearly a ploy to make the old owners out to be the bad guy.  The reality is that this is all going to blow over in a few months and the people the new owners care about... full-fare day ticket people from the flatlands and rich people likely to buy their real estate products... won't know about this issue or care about this issue.  Most of the people I know who bought lifetime pass 1-time transfers did it years ago and made their money back tenfold.  The few who bought them recently while ASC owned the resort certainly must have known the risk they were taking.  Everybody has known for years that ASC was on very shakey financial footing and that a bankrupcy wasn't out of the question.

It's the end of May.  Killington closed the earliest I can remember.  People need to complain about something.  This was the easist thing to latch on to.


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## threecy (May 27, 2007)

I have yet to find an industry colleague who has felt SP/Powdr are at fault.  The most common response has been "who was stupid enough to sell lifetime passes?!?"  Due to the nature of the sale, the common feeling has been that it's ASC's financial liability (if there is one) and SP/Powdr's PR problem (since people are blaming them).  I'm not sure if this will ever be portrayed fairly in the press in terms of SP/Powdr's side, due to the "corporations are evil" mentality nowadays.


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## ctenidae (May 29, 2007)

jerryg said:


> Out of pure curiousity, came someone with an objective opinion explain how this could have been best resolved prior to the finalizing of the sale.



It's looking to me like this was resolved prior to the sale. The Agreement says that Powdr can't cancel the lifetime passes. ASC can. So, Powdr had ASC do it prior to the sale closing. Powdr takes the PR hit, but doesn't take the liability and they can always transfer the PR hit to ASC. ASC runs a PR risk, but what do they care? I'd say it was well executed.


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## JimG. (May 29, 2007)

dmc said:


> Jim is just the kinda guy that will tell you what you don't wwant to hear... The truth...



It's a bad habit of mine...gets me into trouble all the time.


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