Aspen Mountain Lodge flap now over receivership

on Friday, October 11, 2019. (Kelsey Brunner/The Aspen Times)
Kelsey Brunner/The Aspen Times

While key players in the standoff at Aspen Mountain Lodge are at odds over putting its funds into receivership, Alpine Bank is taking measures to remove itself from the dispute.

“Alpine, as a locally serving bank, does not wish to be embroiled in a civil war between this homeowners’ association,” said attorney Chris Bryan earlier this week.

Bryan, of the Aspen firm Garfield & Hecht PC, has represented Alpine Bank in the matter, and in an Oct. 21 court brief, he indicated that “Alpine, in a separate filing, will seek to be dismissed from this civil action and to be discharged of any liability.”

Alpine Bank instigated court action Sept. 19 after learning about the fallout among some of the condominium-hotel’s unit owners over control of its homeowners’ association and funds. Called a “complaint in interpleader,” the bank’s filing in Pitkin County District Court wants a judge’s clarification on whom should be able to access the operation’s money so long as the funds are in dispute.

In the meantime, Alpine froze the accounts, which had been managed by the Aspen Homeowners’ Association, before depositing $175,473 of those funds into the court registry Oct. 21. Judge Anne Norrdin, who is presiding over the matter, also allowed Alpine Bank to transfer approximately $94,000 to an association account to be used for operating expenses, according to court documents.

The crux of the issue concerns who is rightfully entitled to hold a seat on the Aspen Homeowners’ Association and manage its bank accounts.

Brothers Aaron and Michael Brown, who own Hotel Aspen and the Molly Gibson Lodge, have argued through their attorney, Maria Morrow of the firm OKGKM PC, that they have control of the board and its money. That’s because, they argued, Michael and Aaron Brown successfully ran for president and vice president of the HOA, respectively, at its May 31 meeting, voting themselves into the seats by virtue of their ownership of 20 of the Main Street lodges’ 38 units.

Members of the previous board, however, claim the Browns weren’t properly elected and they should be the authorized signers on the Alpine accounts.

A hearing is scheduled Dec. 3 in Garfield County District Court in Glenwood Springs, where Norrdin will hear arguments about whether the funds should be managed by a receiver.

That’s what attorneys for Josh Nordan, William Sheehan Jr. and Scott Sinta — the three individuals claiming the Browns wrongfully elected themselves — is seeking. That same trio was on the former board, and they’re seeking a receiver to manage the funds rather than have it managed by the court.

Under their proposal, brought to the court Oct. 18 by Lucas Van Arsdale of Balcomb & Green PC, Aspen accountant Susan Spaulding would manage the association’s funds, at a rate of $150 and hour, while working directly with the lodge’s general manager, Bob Morris, and its registered agent, Marianne Neiley.

“A receiver is necessary because if the Association’s operating account remains deposited in the court’s registry it will put the association out of business and its employees out of work,” Lucas wrote. “The association primarily operates as a hotel and maintains the employees and services typical of a hotel operation. This requires frequent payment of checks for payroll, outside services and supplies, and utilities and insurance.”

Van Arsdale’s motion goes on to say that using a court registry for the association’s funds isn’t feasible for the lodge’s business operations, because a court order is required each time the account needs be accessed. A receiver would remove that inconvenience, Van Arsdale argued.

Morrow, however, countered in a filing Nov. 8 that there is no need for a receiver because it will further muddy the legal waters in the dispute.

“In summary, appointing a receiver as proposed … makes what is already an unnecessarily messy situation even messier,” Morrow’s filing said, adding that a receiver would create “more opportunities for disputes, more uncertainties as to who is in charge, uncertainty as to who is in charge, uncertainty as to who is ultimately responsible, and confusion to what standard of care applies. … There is no reason to overcomplicate the situation to keep the lights on at the Aspen Mountain Lodge.”

Also pending before the court is civil action brought Oct. 11 by the Brown brothers and their business associate Harris Berlinsky, who are behind the three limited liability companies that currently own 20 units at the lodge, following some maneuvering with the units’ deeds. The three are seeking a judge’s court-ordered special meeting of the HOA because they have been unable to get the statutorily required unit owners’ attendance, known as a quorum, to hold one themselves, their petition contends.

Van Arsdale wants to consolidate that case with the one originated by Alpine, but Morrow also is challenging that effort.