The long-running battle between family members over the future of Seven Springs Resort may be nearing an end, as the Pennsylvania Supreme Court issued a ruling clearing the way for a possible merger. However, no merger plans have been announced.
In August, 1998, ski resort conglomerate Booth Creek Ski Holdings offered nearly $100 million to purchase Seven Springs Mountain Resort from 27 shareholders. The shareholders of the privately held resort consisted mostly of descendants of Seven Springs founders Adolph and Helen Dupre. Booth Creek, owner of 7 resorts nationwide, was anxious to acquire the Pennsylvania resort, which receives over 400,000 skier and snowboarder visits per year.
However, not all shareholders approved of the deal, resulting in a contentious rift between family members. Objecting family members tried to legally block the sale, pointing to a 1969 agreement that required approval of any sale from 75% of the shareholders.
A Pennsylvania Common Pleas Judge intervened in November, 1998, arguing that the 1969 agreement was not relevant, since the acquisition of Seven Springs by Booth Creek was technically considered a merger.
However, this did not end the legal battle, and by late June, 1999, Booth Creek grew tired of the extended court battle and backed out of the deal.
The debate continued, and ultimately landed in the Pennsylvania Supreme Court in September, 2001. A divided Court issued its ruling on July 16, 2002, arguing that a cash-for-stock merger does not trigger the right of first refusal in a closely-held corporation’s buy-sell agreement. In other words, the Court considered a cash-for-stock merger, as Booth Creek had proposed, to be a corporate act, and not a shareholder act - such that a merger could proceed even without approval from 75% of the shareholders.
The Court decided this by a 4-to-1 margin. One Justice presented a dissenting opinion, believing the corporation was expressly bound by the prior Agreement’s transfer restrictions.
This ruling appears to clear the legal hurdles that prevented the acquisition of Seven Springs by Booth Creek Ski Holdings. However, as of this writing, no plans have been announced for Booth Creek or any other entity to purchase the Pennsylvania resort.
M. Scott Smith is the founder and Editor of DCSki. Scott loves outdoor activities such as camping, hiking, kayaking, skiing, and mountain biking. He is an avid photographer and writer.
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