All of this goes to the question of what the proper theory of damages is. As is noted above, Harris was simply. Alculating the forward looking damages as the basis for the surety (bond) -- past damages (and future damages) will be determined in the upcoming proceeding. Possible theories of damages include restitution (putting the parties in the position they would've been had the trespass not occurred) and disgorgement (expropriation of the gains illegally earned from occupation of the property). There may be other theories as well. Andt hose theories will be supported by the valuation methods (income, market data, etc. ).
The trialling will hash these things out.
The theory that I read in the Utah code was that the appeal bond is designed to guarantee that the damages awarded in the ruling being appealed would be paid if the ruling was upheld. While I personally agree with Talisker's theory that the bond should prevent POWDR from using bankruptcy to escape an unfavorable damages award from what has already been ruled (this is mentioned in the code IIRC), the bottom line here is that the damages have not been decided yet. Harris's napkin approach for estimating future damages and having the bond only cover future damages is a novel solution to this problem. By admitting the napkin approach, he's also letting everyone know that these "future damages" aren't anything more than a hint about what the real damages are going to be. Setting the 2015/16 season bond amount was a nice, albeit futile, touch. That won't scare either side into changing their position. POWDR can easily fund 10% of the bond per season just by delaying capex expenses. Vail has demonstrated that they are patient money. They can afford to wait to collect their winnings.
What I find interesting is that the bond amount appears to be right around a number that should be "annoying" to POWDR. 10% (the typical cost for bond insurance to cover the full amount) of $17M is not "chump change" (like 10% of a $3M bond would be) if you consider that it's pissing money into the wind no matter if you win or lose. $1.7M buys a lot of fresh paint and new carpet. Putting up assets to cover the full $17M should be less costly, but that's probably large enough to be a pain and make their banking business more complicated. A $100M bond would "really hurt". Harris probably thought this would give Vail too much leverage over POWDR and jeopardize the 14/15 season. $17M is a number that seems to be designed to make POWDR say "this is doable, but do we really want to do this?" The answer to that question is really simple. If they think they can squeeze more than $1.7M of value from the mediation by delaying, then why not?