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June 20, 2001
Lawsuit puts Mt. Bachelor merger on ice
BEND, Ore. (AP) -- The proposed merger of the Mount Bachelor ski resort with Utah-based Powdr Corp. has been delayed after both companies were sued by Pape Group, whose bid for the resort was rejected.
Pape Group, led by former Mount Bachelor Inc. president Randy Pape, is seeking about $15 million in damages, saying part of the merger agreement is unfair to those who hold multiple shares of stock in Mount Bachelor.
Last month, Powdr Corp. purchased a majority of shares in privately held Mount Bachelor Inc. from individual shareholders for $20,100 per share, plus lifetime skiing privileges.
Shareholders rejected a competing bid from the Eugene-based Pape Group for between $21,100 and $25,000 per share, depending on when during a five-year period the shares were sold.
The lifetime ski privileges given to those who sold shares to Powdr are at the heart of the lawsuit. The privileges apply to Mount Bachelor as well as Powdr's ski areas in Utah and California.
The lawsuit claims the offer is unlawful because any person listed as a shareholder gets one lifetime pass, regardless of whether they own one share or multiple shares. Before Powdr's buyout, Pape Group was Mount Bachelor's largest shareholder, with approximately 23 percent of the ski area's 1,382 shares.
On a motion from Powdr Corp. president John Cumming, shareholders voted to indefinitely shelve the merger agreement while they study the Pape Group lawsuit filed Thursday in Deschutes County Circuit Court.