Investor seeks to prevent Vail’s acquisition of Peak Resorts, including Mount Snow
Weeks before shareholders voted on Vail’s $ 436.6 million acquisition of Peak Resorts, one of Peak’s investors filed a federal lawsuit against the company.
The lawsuit, filed by investor John Field in Missouri Eastern District court on Aug. 29, alleges Peak violated federal securities laws for providing shareholders with a “false and misleading” proxy statement. The lawsuit says the complex omitted or misrepresented financial information and did not disclose potential conflicts of interest of company insiders.
Field’s lawsuit demands that the shareholders’ meeting, scheduled for Sept. 20 in Missouri, be banned until more information is released.
“In short, unless remedied, the public shareholders of Peak Resorts will be forced to make a voting or evaluation decision on the proposed transaction without full disclosure of all material information,” the lawsuit said.
Peak operates 17 stations in the United States, including Mount Snow in Dover.
The lawsuit says Peak insiders were involved in negotiating, reviewing and approving the deal with Vail Resorts – a violation of the Securities Exchange Act. The Plaintiff also stated that Peak’s nine directors would reap “substantial benefits” from the sale, totaling $ 2.5 million of outstanding RSUs converted. The insiders, who negotiated their benefits, will be “the primary beneficiaries of the proposed transaction, not the company’s public shareholders,” according to the lawsuit.
The merger must be approved by at least two-thirds of shareholders who own outstanding common shares and Series A preferred shares. If approved, shareholders will receive $ 11 for each common share, according to a Securities document. and Exchange Commission.
Most of the voting rights are in a company called Cap 1.
Cap 1 is owned by a trust of which members of the Sackler family are beneficiaries. The Sacklers and their company, Purdue Pharma, face numerous lawsuits for making the painkiller Oxycontin and starting the drug epidemic.
In 2018, Cap 1 loaned Peak Resorts $ 50 million to acquire three resorts in Pennsylvania, making Cap 1 the largest outstanding shareholder in the company. Cap 1 currently owns 54% of Peak’s common stock, according to the lawsuit.
The lawsuit also alleges that the 40,000 outstanding shares of the company’s Series A preferred shares are owned by Rory Held, a member of the board of directors of Peak Resort, who is also executive vice president and portfolio manager. of Summer Road LLC, an investment management firm that provides services to Cap 1, according to SEC documents.
Under an agreement between Held and Summer Road, all of Held’s indemnities resulting from the sale will be paid directly to Summer Road as the employer, according to SEC documents.
Peak announced the merger with Vail in July, after announcing in June that the company had had a “record year.” Peak CEO Timothy Boyd said part of the success was in part due to the acquisition of the Pennsylvania resorts, according to the lawsuit.
A financial document prepared by Moelis & Company LLC in July concluded that the merger was “fair” from a financial point of view for shareholders, but the lawsuit says the proxy statement does not explain the numbers used to make this decision. decision.
The lawsuit also alleges that Peak did not explain how Peak’s management team and board members will move forward with the company after the merger.
Peak has yet to file a response to the lawsuit.
Peak Resorts’ communications director Jamie Storrs said Peak’s in-house legal team is working on the case, but declined to comment further.
Attempts to contact Field’s attorney, Matthew Dameron, of Williams Dirks Dameron LLC in Missouri, were unsuccessful.
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