ASC To Dissolve Following Sale of Maine Resorts
SAM Magazine-Park City, Utah, June 21, 2007-American Skiing Company (ASC) plans to dissolve itself now that it has agreed to sell Sunday River and Sugarloaf, Me., to Boyne USA. As a result of the move to dissolve the corporation, ownership of the remaining ASC resort, The Canyons, will pass to Oak Hill Capital Partners, currently the majority stockholder of ASC.
The decision will have little impact on The Canyons in the near term, as the process of dissolution could take up to three years. While Wolf Mountain, the former owner of the resort, has sued to reaquire it, claiming ASC was delinquent on certain payments and thereby nullified its lease agreements with Wolf, that suit is not scheduled to be heard until May 2008.
The ASC board of directors adopted the plan of dissolution June 20 following the recent sales which, in the aggregate, constituted substantially all of its assets, and the repayment of substantially all of its indebtedness, under the terms of Delaware law, where ASC is incorporated.
Under the terms of ASC's Series C Preferred Stock, the company had a liquidation preference of approximately $404.3 million as of May 31, 2007 and which the company is required to redeem on July 31, 2007, to the extent that it has legally available funds. ASC will not have the cash for this, and as such, its remaining assets will transfer to its majority shareholder, Oak Hill.
Following dissolution, ASC subsidiaries will continue their corporate existence and will continue to operate their assets. "We will continue to actively prosecute and defend all material litigation matters affecting the Company and its subsidiaries," ASC said in a letter to shareholders.
At the same time, ASC informed shareholders that "Holders of our Common Stock and Class A Common Stock are not expected to receive any payment or distribution with respect to their shares pursuant to our plan of dissolution after we make payments to our creditors and the holders of our Series C Preferred Stock." \