ST. LOUIS, Mo. — An investor in Mount Snow's parent company, Peak Resorts, wants to stop a vote on whether it will merge with Vail Resorts unless more information is disclosed.
John Field's lawsuit accuses Peak Resorts executives and its board of directors of violating disclosure rules of the United States Securities Exchange Act of 1934 and a Securities Exchange Commission rule regarding statements required by firms when soliciting shareholder votes. It seeks to stop a vote on the proposed $463.6 million transaction, which is anticipated to close this fall.
Field's attorney Matthew L. Dameron of Williams Dirks Dameron LLC said a statement filed by Peak Resorts with the U.S. Securities Exchange Commission in August recommending shareholders vote in favor of the transaction "omits or misrepresents material information concerning, among other things: the valuation analyses prepared by the company's financial advisor Moelis & Company LLC in connection with the rendering of its fairness opinion; and company insiders' potential conflicts of interest."
Peak Resorts' statement does not "disclose whether any of Vail Resorts' prior proposals or indications of interest mentioned management retention or equity participation in the combined company," Dameron wrote in a complaint. "Communications regarding post-transaction employment and merger-related benefits during the negotiation of the underlying transaction must be disclosed to stockholders.
This information is necessary for stockholders to understand potential conflicts of interest of management and the board, as that information provides illumination concerning motivations that would prevent fiduciaries from acting solely in the best interests of the company's stockholders."
In July, Peak Resorts announced it entered a merger agreement with Vail Resorts. Each Peak Resorts stockholder would receive $11 for each common stock share they own and investors with Series A Cumulative Convertible Preferred Stock would get about $1,749 for each share, according to the complaint.
Rory Held, director of Cap 1 LLC, owns all 40,000 shares of the preferred stock, according to the complaint. The company had committed to loaning $50 million to Peak Resorts last year so it could acquire ski resorts in Pennsylvania.
Members of the Sackler family are beneficiaries to a trust that runs Cap 1. The Sacklers are known for their ownership of Purdue Pharma, and recent lawsuits blame the company's marketing for contributing to the opioid epidemic.
The suit against Peak Resorts was filed Thursday in federal court in Missouri, where Peak Resorts has executive offices in Wildwood. The company runs 17 ski resorts in the country and has not yet filed a response in court.
A judge has disqualified herself from the case "to avoid any potential appearance of impropriety." Judge John M. Bodenhausen has taken it over.
Jamie Storrs, spokesman for Mount Snow, declined to comment.
Reach staff writer Chris Mays at firstname.lastname@example.org, at @CMaysBR on Twitter and 802-254-2311, ext. 273.