Power struggle at Aspen Mountain Lodge
A power struggle at an Aspen lodge has prompted a bank to freeze its financial accounts and seek a judge’s clarification on whom should be able to access the operation’s money.
In the meantime, checks have bounced to employees and vendors of Aspen Mountain Lodge, a 38-room condominium-hotel on the 300 block of West Main Street that remains open despite an ongoing squabble among its unit owners over control of its homeowners association and funds, according to individuals knowledgeable of the situation.
On Thursday, Alpine Bank filed what’s called a “complaint in interpleader” in Pitkin County District Court, which asks a judge to determine who is allowed to use the disputed funds that have been managed by The Aspen Homeowners’ Association, which is run by the lodge’s unit owners. The HOA also handles financial affairs for the lodge.
At the heart of the dustup are brothers Aaron and Michael Brown, who own Hotel Aspen and the Molly Gibson Lodge, also on West Main Street, and Bob Morris, who manages Aspen Mountain Lodge.
The Browns own 20 of the lodges’ units. By virtue of that ownership — which amounts to 52.6% of the hotel’s rooms — Aaron and Michael Brown believe they had legal footing and voting clout to take the two top director positions at the lodge earlier this year.
Alpine Bank’s complaint says the recently elected board made Michael Brown the sole signatory for the three accounts that are now frozen, while removing Morris from having access to the funds.
The previous board, however, countered by asking Alpine to make no changes on the accounts, which consists of $252,819, according to the bank’s complaint. The unclear situation prompted the bank to take the matter to court.
“The old board asserts that the New Board was not properly elected at the May 2019 meeting of the members of the association and therefore has no right or authority to take action on behalf of the association,” says the complaint, which was filed by Chris Bryan of the Aspen firm Garfield & Hecht PC. “The new board claims the opposite. Members of the old board and the new board have given Alpine conflicting direction regarding who is an authorized signer on the association’s accounts and whether or not to allow use of the line of credit loan extended by Alpine to the association in 2014.”
The HOA received a $150,000 line of credit from Alpine Bank in June 2014. Alpine extended that credit to $200,000 in July 2018. Questions have risen whether Morris had proper authority to receive those lines of credit; Morris contends it was done properly.
Aaron and Michael Brown, in a statement given to The Aspen Times on Sunday, said: “Even though we have owned units at The Aspen Mountain Lodge for seven years, we’ve never held a board seat. Because of our major investment, we decided to get more actively involved. Since our ownership of 20 units allows us to have a majority on the board, we decided to run for two of the three seats and were duly elected by a majority of the 38 homeowners.
“We are seriously concerned about the lack of appropriate reserves to cover normal building maintenance and upkeep needs and strongly believe that the association must follow sound financial principals and state laws to assure sufficient money to fund the reserves. We are deeply sorry that the staff has been impacted by this association dispute and are working hard to address it.”
Morris said the Browns have “handcuffed” his ability to run the lodge.
“I have employees that live check to check,” he said. “They’re being harmed; their families are being harmed. They can’t pay rent; they can’t pay for food.”
Morris accused the Browns of violating their fiduciary duties at the expense of the lodge’s operations. The Browns maintain they are simply guarding the bottom line and being fiscally responsible.
Public records show the Browns, through Mountain House Lodge LLC, began buying units at the lodge in 2012 in the neighborhood of $100,000 each; the bulk of their purchases came last year when they acquired units ranging from $165,000 to $200,000.
The Brown brothers also hold entitlements to build Lift One Lodge on the western base of Aspen Lodge. The Browns and their investors, however, are no longer part of the Lift One Corridor Project they jointly and successfully campaigned for with the Gorsuch Haus group, through the passage of an Aspen vote in March. In July, the Browns said they were going out on their own because of concerns about the financial stability of Gorsuch.
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Natalie Tsevdos, who is in charge of inspecting roughly 116 food establishments located in the city of Aspen, said violations typically are corrected on-site.