Business Monday: Aspen Skiing Co., others can’t push Liftopia into bankruptcy
A federal judge has thrown out an attempt by Aspen Skiing Co. and a group of other ski-area operators to force a broker of online tickets into bankruptcy.
U.S. Bankruptcy Judge Hannah Blumstiel of the Northern District of California issued a dismissal at the conclusion of an August hearing where she determined a “bona fide dispute” existed between parties over how much is actually owed.
Skico, as managing member of the Mountain Collective pass, tried to put Liftopia into bankruptcy by filing an involuntary petition against the San Francisco-based company June 2. Skico’s claim of $2.38 million was the largest one against Liftopia; the other creditors were Alterra ($63,723), Cypress Bowl Recreations ($395,424) and Araphoe Basin ($175,704).
Blumstiel, however, noted in both a preliminary written order July 29, as well as orally from the virtual bench Aug. 6, that case law is well established that petitioning creditors’ claims must be accurate and not disputed by the debtor being forced into bankruptcy.
Attorneys for Liftopia, while admitting the company owed the creditors for lift tickets it sold on their behalf, said their combined claimed amounts were overblown by $86,000.
Bankruptcy law states for an involuntary bankruptcy case to proceed, there cannot be “a bona fide dispute” between the petitioning creditors and the debtor over the amount owed.
Attorney Joshua Morse, who represented the petitioners, unsuccessfully lobbied the court for permission to amend the bankruptcy petition to correctly reflect the amount Liftopia owes to the ski area operators. Blumstiel, however, said she couldn’t depart from bankruptcy law.
“If you are now conceding there is a bona fide dispute, why on Earth would I permit amending an involuntary petition?” she said at the August hearing.
Liftopia previously argued in a motion to dismiss the case that “a creditor could file an involuntary petition with disputed claim amounts, use the involuntary bankruptcy process as a discovery tool to determine the accurate numbers, agree with those numbers, and then simply amend the petition as if no bona fide dispute ever existed.”
Morse said the petitioners took Liftopia to bankruptcy court to give them leverage they would not have if Liftopia declared its own bankruptcy.
“We commenced this case because out of fear that Liftopia would end up bankrupt with far fewer assets remaining to distribute to unsecured creditors,” he said at the hearing.
Skico, as the managing member of Mountain Collective, sold the pass online through Liftopia since 2012 until it cut ties with the ticket broker because of the dispute over the debt. For the pending 2020-21 season, the Mountain Collective will entitle holders access to 23 resorts. The pass provides access to two days on the slopes of each destination; Aspen-Snowmass counts as one destination.
Liftopia remains in business though it has furloughed some of its employees due to COVID-19, according to its website.
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