American Skiing Company to dissolve |

American Skiing Company to dissolve

Common stockholders won't see a penny from shares when business goes away

— There’s still time to cash out your shares in American Skiing Company for pocket change.

Or, if you’re former ASC director Les Otten, you can cash your shares out for $463,216 – assuming there’s a buyer for Otten’s 15.4 million common shares as of Monday.

Shares of common stock in the company that is the former owner of the Steamboat Ski & Resort Corp. still were trading for 3 cents a share Monday afternoon. That, in spite of the fact that ASC officials have made it plain they don’t expect owners of common stock to see any money as they work toward the dissolution of the company. There are 31.6 million outstanding common shares of the company.

A stock analyst in Maine, who has tracked the publicly traded company for a decade, doesn’t believe the company’s board of directors took the steps necessary to build value for shareholders.

“These guys have never been about making money for the public,” Brad McCurtain of Maine Securities Corp. said. “They’ve been about making money for themselves. They’ve been calling all of the shots for a long time.”

Even though the common stock is virtually worthless, 127,000 shares of the ASC stock changed hands on the OTC Bulletin Board exchange Monday. McCurtain suggested there may be some securities traders who are picking up the shares to hold for clients who need to show a tax loss.

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However, for people who invested in the company beginning with the initial public offering in 1997, the days when they could look forward to a return on the investment are long gone.

Steamboat Ski & Resort Corp. President Chris Diamond, who no longer works for ASC, said Monday that to his knowledge, the stock fallout from the dissolution won’t hit hard in Steamboat. “I’m not aware of any large impacts to local shareholders,” Diamond said.

ASC spokesman Dave Hirasawa said Otten’s 680,000 shares of common stock and 14.76 million shares of Class A common stock amount to just less than half of the common shares.

The position of most individual shareholders is “hopeless,” McCurtain said.

Oak Hill Capital partners, a private equity firm, loaned many millions of dollars to the struggling operator of eight ski areas at its peak. Oak Hill acquired the first half of ASC for $150 million, and then picked up the second half of its assets in 2000 for a fraction of that amount, McCurtain said. At that time, McCurtain’s company, which had tracked ASC since it was headquartered in a small town in Maine, strongly suggested the company’s assets would never be sufficient for it to overcome its obligation to Oak Hill and provide common shareholders with a return on their investment.

ASC announced its intent to dissolve in late June and formally filed with the Securities and Exchange Commission to do just that Monday.

Hirasawa said now that ASC owns just one ski area, it no longer makes sense to maintain a corporate structure. The remaining assets fall to Oak Hill as the primary creditor and The Canyons – the ski resort in Park City, Utah that ASC has not sold – will continue to run as it has this coming winter.

“We’ll still continue to invest in the Canyons,” Hirasawa said.

ASC announced the sale of Steamboat to Intrawest ULC for $265 million on March 1 and followed with the announced sale of the Sugar Loaf and Sunday River ski areas in Maine for $77 million in cash and $2 million in debt.

The timing of the dissolution coincides closely with the due date of redemption of the preferred stock shares in the company, all of which are controlled by Oak Hill.

The sales of Steamboat and the Maine resorts didn’t raise sufficient funds to pay off Oak Hill and other creditors, thus the company informed the SEC there would be nothing left for common shareholders.

Even after selling off all but one of its ski areas, ASC still owed Oak Hill $404 million.

“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,” the company reported to the SEC.

“Don’t feel sorry for (Oak Hill),” McCurtain said. “If they don’t come out of it whole, they’ll come awfully close.”

McCurtain said Oak Hill has been able to name the terms of its loans to ASC and the interest rates it collects on them. Members of the company’s board of directors also collect fees from ASC.

Tell us about your shares in ASC

Did you buy shares in American Skiing Company shortly after the initial public offering in 1997?

We’d like to hear about your experience. Go to http://www.steamboatpilo… and let us know how many shares you have and what you paid for them, and why you were reluctant to unload them years ago.