Judge says Wolf can’t terminate lease
Skiers not sure their season passes for The Canyons would be valid on opening day should pray for powder after a decision handed down Thursday in Snyderville by Third District Court Judge Bruce Lubeck.
In granting The Canyons a temporary restraining order, Lubeck has likely quelled until 2008 attempts by the resort’s landowner to terminate The Canyons’ land lease in western Summit County.
With options to extend the lease 200 years, attorneys for The Canyons took Wolf Mountain Resorts managing partner Kenny Griswold to court this summer after Griswold notified the resort of his intentions to end a business arrangement that began when he leased property to American Skiing Co., parent company to The Canyons, in the 1990s.
"The court does not intend to halt [Wolf Mountain] from protecting its rights, but those rights will be determined in this litigation," Lubeck’s 32-page ruling and order states.
The court was asked by The Canyons to intervene in the dispute when Griswold claimed the lease was violated.
"There’s an expectation all around that people are going to act in good faith," said John Lund, an attorney for The Canyons. "Wolf has not acted that way."
Chip Carey, a spokesman for the resort, rejects Griswold’s allegations that The Canyons broke the lease.
"We’re very pleased with the court’s ruling," Carey said. "We’re very bullish on The Canyons and proud of what we’re doing there."
The judge’s order helps define the "timeframe" and "ground rules" for a courtroom bout that could extend for two years, according to Lund.
"We’re going to get a quality decision now on all the issues," Lund said.
Meanwhile, attorneys for Wolf Mountain, during a court hearing Thursday, continued to urge Lubeck to allow Griswold to lease his land to a different resort operator.
"[The Canyons] is a holdover tenant and we’re concerned about that," Wolf Mountain attorney Michael Homer argued while insisting the judge "allow Wolf to file a notice of termination." "What is the irreparable harm? The skiing facility has changed hands in the past."
American Skiing Co. doesn’t have enough money to operate the resort, Griswold said.
"They’re bleeding The Canyons," Griswold claimed.
American Skiing Company’s stock price has plummeted and revenue generated at The Canyons is being used to keep the company’s other North American ski resorts alive, he added.
"I don’t own Killington, I don’t own Sunday River, I just own land at The Canyons," Griswold said.
Lund countered, "The Canyons has been putting their money where their mouth is."
Millions has been invested in the mountain in anticipation of the upcoming ski season, Carey said.
At issue this week was whether three leasehold mortgages, totaling about $225 million and taken out by American Skiing Co., were grounds for Griswold to terminate the lease.
"Who is being irreparably harmed in this case by such activities?" Homer asked Lubeck, adding that Wolf’s arrangement with The Canyons prohibits the leasehold mortgages.
With a lawsuit that seeks to terminate the lease filed against The Canyons by Wolf Mountain pending, Lund says resort officials are moving forward with a separate case against Griswold to prevent further legal attacks.
"[Lubeck] is requiring [Wolf] to now answer the case," Lund said, adding that Wolf’s attempt to dismiss the case was denied. "They need to raise in their answer whatever problems they have with us. What defaults do they think there are and put them out there."
Griswold countered, "[The Canyons] violated the lease several times and all we’re trying to do is stop them."
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