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Killington Bond (lifetime) Pass holders: Class Action Lawsuit over cancellation - Page 3

post #61 of 76
This clause in the Schedule 14C filed with the SEC in February may be responsible for the letters going out:

Survival and Indemnification
Article IX of the Killington Purchase Agreement provides that the representations and warranties identified in Articles III and IV of the Killington Purchase Agreement and the covenants and agreements of the parties contained in the Killington Purchase Agreement to be performed on or prior to the closing shall terminate on June 30, 2008, except that (i) the representations and warranties relating to environmental matters will terminate at closing; (ii) the representations and warranties with respect to employee benefit plans, tax matters and the indemnification obligation of Buyer shall continue in full force and effect until 30 days after the expiration of the applicable statute of limitations; (iii) claims asserted in writing on or prior to June 30, 2008 shall survive until the earlier of (a) resolution by the parties or by a court of competent jurisdiction or (b) if no action is brought before a court of competent jurisdiction, the expiration of the applicable statute of limitations; and (iv) the covenant relating to honoring lifetime passes will survive indefinitely.

This still refers only to "lifetime passes". Bonds are not referenced anywhere in the document filed with the SEC.
post #62 of 76
Quote:
The new company is honoring 'Lifetime Passes' as defined in the Purchase Agreement. These 'Lifetime Passes' are not the same as the passes granted to original stock and bond investors in Killington. Those investor passes were valid only so long as Killington Ltd. (formerly Sherburne Corporation) operated the ski area. Upon completeion of the asset sale, the entity Killington Ltd. ceased to operate the resort and the passes expired as per their own original terms. As a measure of goodwill, however, the new owner has offered to issue the owners of bond and stock holder passes season passes for the 07/08 season, and season passes in 08-09 with some restrictions," the release stated.
I've been informed a distinction has been made between "lifetime passes".

The above from an industry newsletter referring to a discussion with SP/Powdr representatives. Second hand to me - I don't know the origin of the document.
post #63 of 76
What is a better deal for the new owner? Create a huge amount of ill will (too late) and shell out $8.5M or just let these 1200 passholders ski and spend money on the mountain? :
post #64 of 76

Utah bound?

Quote:
Originally Posted by Lonnie View Post
HS,

All of this is just one more reason you need to relocate a couple thousand miles west of your curent domicle.


Yeah, but I'm kinda locked into Killington, lifetime passes... oh, wait a minute!
post #65 of 76
Quote:
Originally Posted by Philpug View Post
What is a better deal for the new owner? Create a huge amount of ill will (too late) and shell out $8.5M or just let these 1200 passholders ski and spend money on the mountain? :
The real way to look at it, is for those 1200 odd folks, how much potential new revenue would they generate for the new owners?

- Since they're presumably longstanding K consumers, one could make a fair assumption that they have their K-housing arrangements intact, and a very large majority of them wouldn't be purchasing any of the proposed new base area housing

- Since they're once again longstanding, loyal K consumers with once again likely housing already owned in the K area, how likely would a majority of them be to have to put their properties on the market in this slightly soft real estate market, when the K real estate market has alot of potential upside in the next few years if S&P + Powdr can accomplish the "rennaissance" of K in the coming years

- Would a majority of these passholders really not purchase a K pass in 2 years and give up the convienance of having K close to their ski homes/permanent homes and drive the extra distance to get to another hill anytime they need a ski fix?

- How much revenue do these 1200 or so folks really bring into K on a yearly basis verses the larger group of non bond holder/lifetime passholders and the almighty huge economic group that the day-tripper/ski-week/long weekend K consumer is?? I bet if you actually polled that last group of the day tripper/ski-week/long weekend crowd about how the propsed actions and the elimination of the lifetime pass and if it would affect their scheduling a K vacation/ski day the overwhelming answer would be "no"

Bottom line, this is a pure and simple business descision made by new owners that have a new view of operations, and sometimes while not popular business descisions need to be made
post #66 of 76
Quote:
Originally Posted by Philpug View Post
What is a better deal for the new owner? Create a huge amount of ill will (too late) and shell out $8.5M or just let these 1200 passholders ski and spend money on the mountain? :
Nailed it. Grandmother would have called it "Penny wise and pound foolish...."
post #67 of 76
Quote:
Originally Posted by jasdmd0 View Post

Bottom line, this is a pure and simple business descision made by new owners that have a new view of operations, and sometimes while not popular business descisions need to be made
Your argument could just as easily be used to justify mugging the guy on the corner for the $1000 in his wallet.

It ignores the hidden costs of such actions like judicial enforcement against them and the community costs. Who wants to do business with muggers?

Of course there is an direct economic reason for these folks to pursue voiding the bond passes. Us passholders hope that they have inaccurately figured the hidden costs and if they are made aware of them will change their position. Clearly they did give them some value - they offered 2 years as a sweetner. That's not in line with your analysis - they should have just cut us off cold from a "simple business" standpoint.

There's still plenty of time to kiss and make up.
post #68 of 76
Quote:
Originally Posted by curtis123 View Post
Your argument could just as easily be used to justify mugging the guy on the corner for the $1000 in his wallet.

It ignores the hidden costs of such actions like judicial enforcement against them and the community costs. Who wants to do business with muggers?

Of course there is an direct economic reason for these folks to pursue voiding the bond passes. Us passholders hope that they have inaccurately figured the hidden costs and if they are made aware of them will change their position. Clearly they did give them some value - they offered 2 years as a sweetner. That's not in line with your analysis - they should have just cut us off cold from a "simple business" standpoint.

There's still plenty of time to kiss and make up.
To argue counterpoint, right now if you have one of the passes, your yearly expedentiture to get lift access to K is $0 since that bond/lifetime pass was paid in full when your acquired it.

To take this to court, you'll be hiring an attorney at an out of pocket cost to you, or if an attorney is a bond holder and gets involved with it, they'll be giving up substantial quantity of billable hours to file the paperwork and then presumably negotiate with the corporate lawyers of S&P and Powdr and then potentially look at a court hearing. It's this factor, where you'll be spending more out of pocket dollars and/or giving up potential income for an uncertain outcome that may deter some of the bond holders from pursuing things. Plus, it would be interesting to see if an outside attorney (non lifetime passholder/bond holder) would want to get involved with it, since its really not a monetary payout that you'd be looking for as much as it's just a continuation of passes being issued each year. Ultimately, I'd bet that a majority of the bond holders would rather see a settlement in their favor where the yearly passes keep coming their way like the status quo has been, as opposed to a monetary settlement out of that escrow account that apparently was set up during the sale. It begs then to ask, would the potential plaintiff's attorney's looking for lift tixs as compensation or $$
post #69 of 76

To quote VISA commercials

Cost to post internet chat - zero.
Cost to complain to the Vermont AG - zero
Cost to complain to the SEC - zero

Getting your lifetime pass honored - priceless

Saying anymore would be negotiating in a public forum which is stupid - so there you have it.
post #70 of 76
Quote:
Originally Posted by jasdmd0 View Post
- Since they're presumably longstanding K consumers, one could make a fair assumption that they have their K-housing arrangements intact, and a very large majority of them wouldn't be purchasing any of the proposed new base area housing

- Since they're once again longstanding, loyal K consumers with once again likely housing already owned in the K area, how likely would a majority of them be to have to put their properties on the market in this slightly soft real estate market, when the K real estate market has alot of potential upside in the next few years if S&P + Powdr can accomplish the "rennaissance" of K in the coming years
Depending on what property the pass holders have (if any), they may be a very valuable asset to the new owners. Probably not Powdr, since it appears Powdr will only be connected with ski operations. However, SP Land should be interested if they picked up the property management side of ASC's operations.

There is gold in the reoccuring management/maintenance contracts with the condo complexes and Grand Hotel owners who used ASC for property management. Plus a 40% cut of all the rental dollars taken in by those units if they signed with ASC for rental contracts. ASC requires exclusive rental agreements - the whole complex rents through ASC if they are picked as the rental agent and no private rentals by owners are allowed. Property management is where the "easy money" is - owners pay every day, all year long - winter, spring, summer and fall.

So don't write off owners as having little value. It depends on what they own. You're right though, they probably aren't going to "up and move". At least not easily in this market.
post #71 of 76
Quote:
Saying anymore would be negotiating in a public forum which is stupid - so there you have it.
FWIW (nothing actually)...

I suspect my K-friends won't like the conclusion I've drawn, but I think the "interest payout" on the bonds does end with the dissolution of the whole Killington Ltd, S-K-I, LBO, ASC incestuous mergings.

That said, there are properly struck bonds/stocks underneath the "ski-free" interest. The bond holders should be entitled to the maturity value of those debt instruments since no bankruptcy is involved. One of the companies ASC, SP Land, or Powdr should have taken responsibility for this debt (as was done for all debts) in the transaction. That's what I would be looking to recoup. (In addition to the 2 years of skiing offered.)

Obviously bond holders probably see it differently, and are free to find a legal avenue to pursue a different course of action.

The stock holders are in a different position - those shares may have converted to ASC common, which in my opinion is not worth the paper it's written on. There will be nothing left of the company by the time those shares are eligible for pay out.
post #72 of 76
Hind site is 20/20, but if I was the new owners, I would have welcomed then 1200 to all meetings and offered them some honorary something and try to figure a way to get more money out of them by offering a value somewhere.
post #73 of 76
Thread Starter 
Quote:
Originally Posted by Cirquerider View Post
"The Corporation" would be a defined term in any bond or legal document. Whether it encumbers heirs, successors, agents etc is a valid question that can only be answered by reviewing the original contract.

Watch your blood pressure HS.
I recommend risers rather than a soapbox.
Yep.......people are looking for copies of the original contract:

http://www.killingtonzone.com/forums...sc&sta rt=315

Turns out, many of the older bond issues have "Shurburne" in the bond wording.
post #74 of 76
Thread Starter 
A few more posts from the K-zone thread, from long time Killington bond pass holders and residents.....(new to K-Zone and there to post on this topic)

Quote:
Originally Posted by curtis123
So - if I may test your patience with a few more thoughts...

SP Land obviously used their bargaining position to extract a discounted deal from ASC. So they are sitting on a profit now.
They can probably use powdr's expertise to make the place pretty for the flip.

The real prize they've got to have their eyes on is what kind of development plan they can extract out of the town. They've got to have been thinking that the town was a bit hungry for SOMETHING/ANYTHING after the ASC drought of the past few years.

And judging by some of the posts here and the Mountain Times toady many in town would give them a gift expecting to receive a return in future years.

What these people should consider is that these people are not likely to stay. Give them a gift and they will sell it for it's full value to the next lot. And agreements and good will don't necessarily transfer across the next deal. The passes are the prime example of that here. Agreements and goodwill nurtured over years can be lost when the money changes hands.

Pres and Joe and company were business men first, but they had skier's and Vermont hearts. It's big money now, we're unlikely to see that breed in charge again. Don't get taken!
Quote:
Originally Posted by curtis123
"my personal customer experience" at Killington has been pretty good for many years. Not sure what to change to improve it. It's all about the skiing for me - I don't need a marble toilet to be happy. You say you want them to groom more? Bite your tongue NOW.

Oh, sure, I do think it's bad business practice to keep wages as low as they do. I'm sure lots of good people leave and the ones that stay are less motivated.

And I'd like to see the connection between K and P.

Not sure about the village development. Am I going to have to drive down to rt. 4 to park in a parking lot somewhere and get bused to the mountain? Not cool with that. If it were up to me I'd put the village on the golf course rather than the parking lot. Run a lift right down the front 9 to the Wobbly. The whole place would be ski-in ski-out. This continual attempt to make it a four season resort is doomed. How many people can go out 4 at a time every 12.5 minutes on the golf course? (answer 154 per day) And how many people upload on 32 lifts every 12.5 minutes in the winter? (answer: a LOT more) It's a lost cause.

Preventative shot here: Before you come after me for not contributing to the cash flow by buying a pass every year: note that the money we gave killington in 1960 put the steel on the hill that makes any cash flow possible. The steel is still there. And taking my pass away is not going to change their skinflint wage policies even when I buy a pass every year. That money is all Texas bound.
Quote:
Originally Posted by ARCEM
Quote:
Originally Posted by Dr. NO
The people that sold my Bond sent me a copy of thier bond. The wording on each is EXACTLY the same.
"...entitling the holder to the free use of all ski lifts operated by the Sherburne Corporation at Killington Basin so long as the coproration 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."

"...operate in the area under an agreement with the State of Vermont" seems to be our only hope.
Dr. No,

Yours reads just like the certificates my wife and I have, which are non- transferable but have Preston Smith's signature on them. (We finallized on mine in April '77 and her's in Jan. '80). I wonder if anyone who knows Pres personally and is still a lifetime pass holder has contacted him to get his opinion on the subject and indeed the original intent. It might be interesting.

Again, as I've stated before on this board, I wonder how ASC was operating on state land in VT. Were they able to just assume the original land use agreement with Sherburne Corp (later K-ltd) or did they renegotiate with the state.

If the answer was that they were using the original land use agreement, what do POWDR/SP Land plan to do? If they want to make use of that K-ltd asset (the original land use agreement), why does the state have to allow it if they are unwilling to live up to the liabilities associated with it, namely the passes? If not and POWDR/SP Land need to renegotiate with VT to operate the ski area which is primarily on state land, let's petition VT to support its residents and out of state property owners who OWN these rights.

To me there is no real reason to let these guys off the hook. If Killington is sucessful (and it actually is as a ski area- it makes money) and the new round of real-estate schemes work, these guy's will make beaucoup $$$. If not, it won't be because of these pass obligations one way or another. It'll be because the real estate ventures didn't pan out yet again. That's where all the risk is. If they don't pan out, SP and POWDR will be long gone with as many $$ as they can take out of VT, but most of the effected residents and out of state property owners (many of whom WERE planning to become local residents upon retirement) will still be here.

If you're a local Killington or VT state politician, would it not be wise to cover your bets by backing the locals in this matter?? There's really not much downside for them. They'll get the big boy's campaign contributions anyway, just to be able to operate the ski areaand smooth out the land permitting process Squeeze these guys some, it doesn't necessarily mean doom and gloom for the local economy because POWDR/SP Land has to run the ski area to make the real estate profitable and are not about to shoot the CASH COW that is Killington Ski Area over the bucks per season that they MIGHT recoup by not HONORING (truly a lost word in business schools today) these passes.

On another note, I do think a compilation of all the effected lifetime pass holders is a very good thing, as the NO's strategy is obviously "to divide and conquer." it's better that we unite and get a reasonable plan of action that encompasses all of the salient points discussed so well on this board.

Terry Unkert
post #75 of 76
Thread Starter 
Another post from the K-zone thread, from a brand new member....using f-word alot too.....FRAUD!!!!!

Quote:
Originally Posted by mogulskier
Call the AG - 802 828 5506.
the reality of the siuation is that if you have any of the "bond" passes you are a debt holder of Killington LTD. Debt comes before equity. this means that you must be satisfied before the assets can be transfered out of the company to the benefit of the equity holder (ASC-- to the tune of 80 odd million).
Either one of three things needs to happen- ASC keeps honoring hte debt in some way, or they need to buy the debt back, as it is a perpetuity, or they must have the acquiring party assume the debt and continue to honor it in perpetuity. If none of these happens, then its a fraudulent transfer of assets.
It seems that they are taking a different path here- they (SP & POWDR in concert with ASC) are trying to, under fraudulent pretexts, acquire the debt. meaning they state publicly that they wont honor it, then say that they'll give 2 years of passes if you turn in your certificate. point being that in giving them the certificate in exchange for the 2 passes, you have sold them the bond
.
post #76 of 76
we have an active lawsuit in progress to protect our killington lifetime passes
email us at lifetimepass@vermontel.net for information
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