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July 8, 2007
By BRUCE EDWARDS Staff Writer
Nearly 10 years ago, a jubilant Leslie B. Otten rang the bell at the New York Stock Exchange to celebrate the launch of American Skiing Co. as a publicly traded company. The stock debuted at $18 a share on that day in November 1997. From there, like an Olympic skier, the stock went downhill with a vengeance.
Fast forward to June 6 of this year when the board of directors of American Skiing Co. filed notice with the Securities and Exchange Commission that it was dissolving the company. The action came two days after the company announced the sale of its Sunday River and Sugarloaf/USA resorts in Maine. The closing on the sale of the Maine resorts is expected at the end of July
Mired in high-interest debt from its inception, ASC last year began setting the stage for its own end — selling off its resorts: Steamboat in Colorado, Mount Snow, Killington and Pico in Vermont, Attitash in New Hampshire and finally Sunday River and Sugarloaf in Maine. The company had previously sold its Haystack and Sugarbush resorts in Vermont and the Heavenly resort that straddles the California and Nevada border.
The only resort left is The Canyons, its flagship resort in Park City, Utah, which is tied up in litigation. Wolf Mountain, the former owner and current landlord, alleges that American Skiing Co. defaulted on certain lease payments. Once the largest ski resort operator in the country, the dissolution of American Skiing Co. is expected to take place over a two to three year period, company spokesman David Hirasawa said.
He said the stock will cease trading later this month on the Over the Counter Bulletin Board.
Hirasawa said dissolution of the holding company won't affect The Canyons, which will continue to operate as a standalone company. Down the road, he said The Canyons could be sold with the proceeds paid to Oak Hill Capital Partners, the controlling stockholder. Another option, he said would involve simply turning over stock in the ski resort to Oak Hill.
Proceeds from the recent sale of its resorts enabled the company to pay off its bank loans and bonds. One debt that remains, however, is the $404.3 million owed Oak Hill Capital Partners, the Series C preferred stockholder. ASC is required to redeem the Series C shares on July 31, according to the company's recent filing with the Securities and Exchange Commission.
But the SEC document also makes clear that the "remaining cash and the value of its remaining assets will not be sufficient to pay in full … all of the outstanding Series C preferred stock … ."
"We do expect to be able make some partial distribution to the preferred stock but not in full," Hirasawa said.
The filing also noted in bold print that both the common stockholders and the Class A common stockholders "are not expected to receive any payment" after the company pays its remaining creditors and the preferred stockholders.
As the Series C preferred stockholder, Oak Hill and its related entities hold 66.6 percent of the voting shares.
It was Oak Hill, a Texas-based private equity firm, that company founder Otten turned to several years ago when his heavily leveraged company ran into a financial bottleneck. In return, Otten gave up control of the company but remained on the board of directors until this year.
The Maine entrepreneur, who started with the struggling Sunday River ski area in Maine in 1979, owns 14.8 million shares of Class A common stock. Like the rest of the common stockholders, Otten won't see a penny once the company is dissolved and its remaining assets liquidated.
By BRUCE EDWARDS Staff Writer
Nearly 10 years ago, a jubilant Leslie B. Otten rang the bell at the New York Stock Exchange to celebrate the launch of American Skiing Co. as a publicly traded company. The stock debuted at $18 a share on that day in November 1997. From there, like an Olympic skier, the stock went downhill with a vengeance.
Fast forward to June 6 of this year when the board of directors of American Skiing Co. filed notice with the Securities and Exchange Commission that it was dissolving the company. The action came two days after the company announced the sale of its Sunday River and Sugarloaf/USA resorts in Maine. The closing on the sale of the Maine resorts is expected at the end of July
Mired in high-interest debt from its inception, ASC last year began setting the stage for its own end — selling off its resorts: Steamboat in Colorado, Mount Snow, Killington and Pico in Vermont, Attitash in New Hampshire and finally Sunday River and Sugarloaf in Maine. The company had previously sold its Haystack and Sugarbush resorts in Vermont and the Heavenly resort that straddles the California and Nevada border.
The only resort left is The Canyons, its flagship resort in Park City, Utah, which is tied up in litigation. Wolf Mountain, the former owner and current landlord, alleges that American Skiing Co. defaulted on certain lease payments. Once the largest ski resort operator in the country, the dissolution of American Skiing Co. is expected to take place over a two to three year period, company spokesman David Hirasawa said.
He said the stock will cease trading later this month on the Over the Counter Bulletin Board.
Hirasawa said dissolution of the holding company won't affect The Canyons, which will continue to operate as a standalone company. Down the road, he said The Canyons could be sold with the proceeds paid to Oak Hill Capital Partners, the controlling stockholder. Another option, he said would involve simply turning over stock in the ski resort to Oak Hill.
Proceeds from the recent sale of its resorts enabled the company to pay off its bank loans and bonds. One debt that remains, however, is the $404.3 million owed Oak Hill Capital Partners, the Series C preferred stockholder. ASC is required to redeem the Series C shares on July 31, according to the company's recent filing with the Securities and Exchange Commission.
But the SEC document also makes clear that the "remaining cash and the value of its remaining assets will not be sufficient to pay in full … all of the outstanding Series C preferred stock … ."
"We do expect to be able make some partial distribution to the preferred stock but not in full," Hirasawa said.
The filing also noted in bold print that both the common stockholders and the Class A common stockholders "are not expected to receive any payment" after the company pays its remaining creditors and the preferred stockholders.
As the Series C preferred stockholder, Oak Hill and its related entities hold 66.6 percent of the voting shares.
It was Oak Hill, a Texas-based private equity firm, that company founder Otten turned to several years ago when his heavily leveraged company ran into a financial bottleneck. In return, Otten gave up control of the company but remained on the board of directors until this year.
The Maine entrepreneur, who started with the struggling Sunday River ski area in Maine in 1979, owns 14.8 million shares of Class A common stock. Like the rest of the common stockholders, Otten won't see a penny once the company is dissolved and its remaining assets liquidated.
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