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Canyons memo discussed

Patrick Parkinson, Of the Record staff

With The Canyons poised to operate for the rest of the season, the resort’s landlord, Wolf Mountain Resorts chief Kenny Griswold, is pushing to terminate his lease with American Skiing Company.

But American Skiing Co., the parent company to The Canyons that is headquartered in Park City, has been able to fend off Wolf Mountain’s attempts to end the lease, which could allow Griswold to rent or sell more than 3,000 acres he owns at the Snyderville Basin resort to a different operator.

Griswold says he began leasing his land and property and subleasing land he rents from the Osguthorpe family to American Skiing Company when The Canyons formed in the late 1990s.

But American Skiing officials violated the lease when they discussed amending the contract with the Osguthorpes without Wolf Mountain’s authorization, attorneys for Wolf Mountain claim.

"There is a very significant issue of intent," Jesse Trentadue, an attorney for Wolf Mountain told Third District Court Judge Bruce Lubeck during a court hearing Monday. "You cannot modify anything without our permission."

American Skiing Company attorneys countered that rather than subleasing the Osguthorpe property from Griswold, the resort’s arrangement on the land constitutes an assignment of Wolf’s interests in the property, meaning American Skiing hasn’t violated its ground lease with Griswold.

"We were replacing Wolf as the prime tenant, so to speak," said John Lund, an attorney who represents American Skiing Company. "It isn’t as though we were just there for the summer, subletting."

In the past, however, including in documents the publicly traded company filed with the Securities and Exchange Commission, American Skiing Company called the contract a sublease, argued Trentadue.

"Nowhere prior to this time has anyone ever used the word ‘assignment’ This is in fact a sublease,’" he said, adding that Griswold has grounds to terminate American Skiing Company’s lease at The Canyons.

Information obtained from present and former American Skiing Company executives and an internal company memo obtained by Wolf Mountain will show resort officials committed fraud when they attempted to amend the lease, Trentadue said.

"There has been no discovery in this case," Trentadue told Lubeck. "We believe that this evidence is out there, that it is in possession of third parties."

Lund, however, who has asked for summary judgment on the Osguthorpe issue, wants Lubeck to prevent Wolf Mountain from presenting as evidence the ASC memo he claims includes privileged information.

"It’s not clear-cut, it’s very much a dispute of fact that needs witnesses, testimony and evidence," Trentadue said in an interview Monday.

Lubeck expects to rule this week on how discovery in the case could proceed.

"When all interests that Wolf had in the Osguthorpe parcel were conveyed lock, stock and barrel to us it amounts to an assignment," Lund said.

Wolf Mountain’s accusations that resort officials committed fraud are "insulting," Lund said in an interview following Monday’s hearing.

"They have a theory about us tricking them a lot," Lund said. "The common parlance — everything seems to be obtained through fraud and, of course, our factual position there is that the folks at Wolf, Kenny Griswold, continued to work with us for the first couple of years after the (Osguthorpe) transaction took place."

Lund blasted Griswold for not responding to a lawsuit filed against Wolf Mountain by American Skiing last summer after Griswold attempted to terminate the lease.

"It’s a basic thing to answer the complaint," Lund said.

Trentadue insists Wolf Mountain could likely respond to the lawsuit and file counter claims by Friday.

But he couldn’t respond when Lubeck asked whom Wolf Mountain would depose in the case.


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