American Skiing Company has agreed to pay a cash settlement to Tim and Diane Mueller of Triple Peaks LLC to make the lawsuit over the abandoned sale of the Steamboat Ski Area go away.
Neither side would discuss the amount of the settlement Monday, however it was expected to be revealed today when ASC files a statement with the Securities and Exchange Commission. Previous filings with the SEC indicate ASC has set aside $5 million as a contingency fund to cover a possible settlement of the lawsuit. That isn't necessarily the amount of the settlement.
"The settlement really speaks to what a tremendously important asset Steamboat is to American Skiing Company," spokesman David Hirasawa said Monday. "When you consider the effort, time and expense that went into the settlement to keep Steamboat in the ASC family, it speaks to that."
The lawsuit was waiting for a hearing before the Colorado Supreme Court at the time the settlement was announced. The matter dates to April 2002 when the Muellers filed suit to enforce the contract that would have allowed them to purchase the Steamboat Ski Area for $91.4 million. Tim Mueller was literally sitting at the closing table in a Manhattan office building in March 2002 when ASC officials decided that instead of selling Steamboat to Triple Peaks, they would instead sell Heavenly Resort in California to Vail Resorts.
Triple Peaks has agreed to a dismissal of all claims relating to the sale of the Steamboat Ski Area. The Muellers closed on the purchase of the Crested Butte Ski Area this spring, and Tim Mueller said Monday that he would work with Steamboat management to improve the environment for skiing and snowboarding in Western Colorado.
"We are glad this issue is behind us so that we can focus all our efforts on our Crested Butte, Okemo (Vermont) and Mount Sunapee (New Hampshire) resorts," Mueller said. "Saying goodbye to the Steamboat community was difficult, but we wish them the best of luck as they move forward. I got to know the management people at Steamboat. I imagine there are some things we can work together on."
Mueller said his plate is full working to improve Crested Butte, and he's glad to move beyond the uncertainty prolonged by the lawsuit.
"Overall, it would have taken a lot of time to get it all the way through the court, and there were a lot of unknowns we certainly didn't control," he said.
Mueller said the original investors in Triple Peaks, which included a number of Steamboat residents, would share in a small portion of the financial settlement. He said he would use the funds to improve his three resorts.
The Muellers remain partners in Catamount Ranch & Club real estate development in Routt County.
The amount of the settlement will not be charged to Steamboat's balance sheet, Hirasawa said. He added that it wouldn't make sense to devote so many resources to keeping Steamboat and then constrain its growth by saddling it with the amount of the settlement.
ASC marketing executive Andy Wirth said ASC already has agreed to fund a $1.3 million replacement for the Burgess Creek chairlift, and he expects additional capital expenditures to be announced soon.
The lawsuit took several twists and turns during the past 26 months. Now-retired District Judge Richard Doucette issued a ruling Dec. 31, 2002, dismissing the suit. However, the Colorado Court of Appeals ruled Jan. 22 that Doucette was wrong in taking the action he did. Without ruling on the merits of the suit, the appeals court sent the case back to the local court, renewing the possibility of a jury trial in Steamboat.
ASC then petitioned the Colorado Supreme Court to rule on the point of law that was the bone of contention in the case.
The suit centered on the two parties' differing interpretation of a clause in the sale contract that would have invoked a $500,000 payment to Triple Peaks in the case that the contract were "breached." Triple Peaks interpreted the contract to say that only Triple Peaks could terminate the sale. ASC contended that the opportunity to terminate the contract was mutual.
In the end, that dispute does not appear to have been settled.
Hirasawa said the $500,000 has since been paid to Triple Peaks, but the ongoing suit was about additional damages being sought by the Muellers.
Wirth said the settlement of the suit removes a minor distraction for ski area employees and the community. He said he would prefer to focus on Steamboat's rise to No. 3 in Colorado in skier visits behind Vail and Breckenridge, and fourth in the country behind Vail, Breckenridge and Mammoth, Calif.
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