RUTLAND – A federal judge has dismissed a class action lawsuit against Killington Resort over so-called "lifetime" ski passes. Judge Christina Reiss found that the resort owner was under no legal obligation to honor the investor season passes when it purchased Killington Resort in 2007. The passes were issued in the early years of the ski area as an incentive to attract investors. Over the years, the season passes were sold for thousands of dollars with subsequent owners of the resort honoring the passes. However, that practice stopped when SP Land Co. and Powdr Corp. purchased the resort's assets from American Skiing Company in May 2007 for $83.5 million. In November 2007, four investor pass holders sued to have the passes reinstated. Named as defendants were SP Land Co. and the resort's operating company, Killington/Pico Ski Resort Partners. Also named as defendants were former owners of the resort. Powdr Corp. was not named in the lawsuit. The plaintiffs have appealed Reiss' May 17 decision to the 2nd U.S. Circuit Court of Appeals. "We're very, very disappointed," Killington resident Martin Post said Monday. "Our attorneys feel that there were a number of issues which are appealable and consequently we have made the decision, along with our attorneys, to go to the 2nd Circuit Court and appeal Judge Reiss' decision." The lawsuit argues that based on the wording of the investor passes, owners of the resort are bound to honor the passes which entitled the holder "to the free use of all ski lifts operated by (Sherburne) Killington Ltd. at (Killington Basin) Killington Ski Area so long as the corporation shall operate in that area under an agreement with the state of Vermont." Two types of investor passes were issued. Between 1956 and 1961, an investor received a season pass for each $1,000 invested. The so-called AT pass could be transferred or sold once a year. Investments made between 1961 and 1968, entitled the investor/pass holder to transfer what was known as a P pass only once while the pass remained in effect. The litigation includes 1,243 pass holders – 342 yearly transferable passes and 901 passes that could be transferred a single time. Lawyers for the plaintiffs argued that the "corporation" refers to any subsequent operator of the ski area. Sherburne Corp. and its successor, Killington Ltd., continued to operate as entities under S-K-I Ltd. and later American Skiing Company. But when SP Land Co. and Powdr Corp. teamed up to buy the resort's assets from American Skiing Co., Killington Ltd. ceased to exist. In granting defendants' motion for summary judgment, Reiss found that the language contained in the investor pass certificates "is clear and unambiguous." "The only reasonable interpretation of that language is that it requires Killington Ltd. to provide the designated passholder free use of all ski lifts operated by Killington Ltd. at the Killington Ski Area so long as it operates in that area … ," Reiss wrote in her 31-page decision. Reiss continued that the term corporation "clearly refers to the named corporations, Sherburne and Killington Ltd." and that the deal was structured as an asset sale and not a transfer of stock. "The plain language of the AT and P passes reveals no intention to bind Killington Ltd's successors … To the contrary, Killington Ltd.'s obligations under the passes clearly terminate with its cessation of operations in the area." She also noted that in its purchase agreement with American Skiing Co., SP Land agreed to honor 37 'lifetime' passes, which did not include the names of the plaintiffs or the names of any class members. (A number of those lifetime passes were issued over the years to former employees). Reiss went on to say that in an asset sale, "the buyer does not ordinarily assume responsibility for the debts of the seller." Karen McAndrew, who represents Killington/Pico Ski Resort Partners, said the summary judgment in the resort's favor did not come as a surprise. "We thought she analyzed the legal issues very carefully and we thought she reached the right result," said McAndrew, a partner in the Burlington law firm of Dinse, Knapp & McAndrew. She said the investor pass certificates stated very clearly that the passes were valid "so long as the Sherburne Corp., and that became Killington Ltd., continued to operate the lifts there" and that neither corporation exists today. Post and his wife, Jill, paid approximately $3,500 each for their passes 20 years ago. Post said their case may have been hurt when it was transferred from Judge William Sessions to Reiss, who took her seat on the federal bench in January. Post said that Sessions was more familiar with the case. The Posts and the other plaintiffs are represented by the Middlebury law firm of Langrock Sperry & Wool. bruce.edwards@rutland herald.com.

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