ASC, Landlord Wrestle for Control at The Canyons

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SAM Magazine-Park City, Utah, July 7, 2006-The American Skiing Co. (ASC) is in a legal tussle with Wolf Mountain Resort, from whom ASC leases much of the terrain that makes up The Canyons, over who will control the resort. Wolf has alleged that ASC defaulted on its lease and that Wolf is therefore entitled to repossess the resort. A judge has issued a preliminary injunction that prevents Wolf Mountain from reclaiming The Canyons, but a final legal resolution could be months off.

While sidestepping the issue of default, the judge declared that his intent was to ensure the uninterrupted operation of the resort, both for the sake of the area itself and the public interest. American Skiing Co. has invested $60 million at The Canyons in the past decade and is in the midst of anther $10 in projects this summer, including the construction of two lifts and a golf course. A default could stop work and put the operation of the area for the 2006-07 season in jeopardy. And that could seriously hamper the health of the local economy, the judge indicated.

The dispute centers on 550 acres at the mid-mountain center of The Canyons, a key portion of the 3,500 acres that comprise the resort. This is one of the many leaseholdings that make up The Canyons, a patchwork that was largely assembled by Wolf Mountain in the 1990s.

Wolf served a "notice of default" Mar. 31 and threatened to evict ASC. Kenny Griswold, a principal in Wolf, claims that ASC founder and former CEO Les Otten had attempted to change the terms of the lease with the Osguthorpe family that owns the disputed acreage. Griswold's lawyer argues that the changes violate the master lease agreement ASC has with Wolf. According to a report in the Boston Globe, ASC vice president Tim Vetter disputes that notion, and the company is asking the courts to rule on it. Vetter said that ASC obtained "additional rights" in negotiations with the Osguthorpe family, owner of the key resort parcel, "as part of fulfilling the master plan and creating a world class resort."

ASC officials believe the court will ultimately rule that the company has cured the defaults, if any, that have occurred, and that ASC will remain in control at The Canyons. A determination is several months away; the court has not scheduled hearings in the case.

For his part, Griswold told the Salt Lake Tribune that he believes there are just two options for settling the dispute: "We buy them out, or they buy us out."



ASC just keeps getting themselves in more trouble....