Muellers go to court to force sale
Steamboat Springs — Tim and Diane Mueller haven’t given up on their bid to purchase the Steamboat Ski Area, going to court in an effort to force American Skiing Co. to honor the sale contract.
The Muellers and Triple Peaks LLC filed a lawsuit Friday against ASC and the Steamboat Ski & Resort Corp. in U.S. District Court in Denver. The suit alleges ASC unlawfully breached the sale contract and asks the court to enforce the contract as well as awarding two types of monetary damages. The suit does not specify the amount of damages sought. If it goes to trial, the suit will be heard by a judge, who will rule on its merits. There will not be a jury trial.
Tim Mueller said Friday the suit is about more than money.
“We’re still interested in acquiring the ski area. That’s the main point of the suit to force the sale rather than just looking for damages,” he said.
The suit was filed shortly before 5 p.m. MST. Efforts to reach American Skiing CEO B.J. Fair or other representatives of the Maine-based company for response to the suit were unsuccessful.
The Muellers are the leaders of a group of investors called Triple Peaks that agreed to purchase the ski area for $91.4 million from financially beleaguered ASC. Triple Peaks would have owned Steamboat along with the Muellers’ other ski areas, Okemo Mountain Resort in Vermont and Mount Sunapee Resort in New Hampshire.
The Steamboat contract was signed Jan. 24, but the suit says the closing date was postponed three times. Finally, on March 26, with the Triple Peaks team in a conference room of a New York law firm ready to begin the closing process, ASC backed out of the deal. The general counsel for ASC and a member of its board of directors informed Mueller by telephone that they no longer intended to consummate the Steamboat sale. Instead, they planned to sell another of their ski areas, Heavenly Ski Resort in California, to Vail Resorts for $102 million.
In the complaint, Triple Peaks and its attorney Craig Welling of the Denver law firm Rothgerber, Johnson and Lyons point out that the contract contains language that allows either seller or buyer to terminate for a separation fee of $500,000, but only if they meet certain requirements. They allege that ASC did not meet those criteria.
On that basis, they are asking the court to require ASC to live up to the contract. They also seek two kinds of unspecified monetary damages. The first monetary claim is based on the plaintiff’s assertion that ASC is in breach of contract.
The complaint asserts “Triple Peaks suffered and continues to suffer damages in an amount to be determined at trial.”
Second, the suit asks the court to reach a declaratory judgment, asserting “Triple Peaks is entitled to recover from the defendants the actual and consequential damages it suffered as a result of defendants’ breach.”
One section of the complaint deals with the pending deal between ASC and Vail for Heavenly.
Documents on file with the Securities and Exchange Commission show an agreement of confidentiality between ASC and Vail was signed in October 2001. Mueller said Friday he was kept in the dark about that deal, and had he known of it, the terms of the contract he signed for the purchase of Steamboat might have been different.
Mueller wondered aloud about the possibility that ASC had been less than straightforward with him and his investors from the beginning.
“Maybe they didn’t ever intend to close with us,” Mueller said.
The complaint points out ASC represented to Triple Peaks that it intended to go forward with closing, “while at the same time, negotiating the Heavenly Valley transaction with Vail Resorts.”
“Upon information and belief, but for the Heavenly Valley transaction, defendants would have closed the agreement with Triple Peaks,” the complaint states.
“Upon information and belief, persons or entities currently unknown to Triple Peaks may have tortiously interfered with the agreement and proximately caused severe loss of prospective business advantages and other damages to Triple Peaks.”
Mueller declined to expand on that portion of the complaint. But the term “tortiously interfered” refers to an area of common law that holds that third parties who are aware of a contract between two other parties have a legal duty not to interfere. And, in the event they do interfere, they can be held liable for damages.
Mueller said he has no indication of how soon the lawsuit could go to court, but he’s optimistic it won’t be a long, drawn-out affair. He said he and his wife signed their contract with the faith that if they met its requirements, they would succeed in purchasing the Steamboat Ski Area.
“We felt Steamboat would be a good match with our other ski areas, and the employees at the ski areas would have been a good match. We felt the towns were a good match.”
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