Aspen Skiing Co., Alterra Mountain Co., Arapahoe Basin and Canada’s Cypress Bowl are asking a federal bankruptcy judge to force online lift ticket seller Liftopia into bankruptcy, saying the California-based company owes the resorts more than $2 million.
Liftopia, one of the first companies in the world to sell lift tickets online, is fighting the involuntary-bankruptcy petition filed by the resort companies in early June, arguing the operators are off in their calculations of what they are owed.
The legal wrangling, filed in the Northern District of California’s U.S. Bankruptcy Court, is yet another glimpse into the cascading financial blows that followed the sudden shuttering of ski areas across the country in mid-March.
About a month after the resort industry — and really the world — ground to a halt in March, Liftopia boss Evan Reece sent a note to his more than 100 ski resort partners, warning them of a delay in payments the company owed resorts for selling their lift tickets. Reece said he needed time to “secure a capital position” to pay back those partners and warned that revenue from season passes his company sold for the 2020-21 ski season was locked away by a third-party payment processor “until they gain confidence in resorts’ operations next winter.” (The company received a Paycheck Protection Program loan between $350,000 and $1 million, according to a federal database.)
Matt Jones, the chief financial officer of Aspen Skiing Co., which heads the 23-resort Mountain Collective pass, sent Reece an email on April 20 asking how much Liftopia owed for tickets sold to Mountain Collective partners. Reece told him it was “about $2m.”
When can we expect those payments to start, Jones asked.
“The timeline is imprecise for now,” Reece answered.
Reece explained that he was working with debt and equity partners, but they were “waiting to see if there will be a light at the end of the tunnel.”
“I anticipate pain for my existing cap table, but that partners get paid,” Reece wrote.
Six minutes later Jones asked for clarity, somewhat incredulously, that repayment of the resort operators’ lift tickets already sold relied on Liftopia finding an investor.
“So you have spent our money on other things, like rent and payroll and therefore it’s gone?” Jones wrote. “Trying to understand what happened to our revenues, which to be clear, were never yours to begin with.” (The arrangement has Liftopia collecting a fee for selling lift tickets and season passes for resorts.)
On April 23, Jones sent a letter to Reece asking for roughly $2.1 million. On June 2, Aspen Skiing Co., acting on behalf of the Mountain Collective, joined Arapahoe Basin, Alterra Mountain Co. and Cypress Bowl in the involuntary petition seeking $2.38 million.
In his motion to dismiss the petition filed earlier this month, Reece argues that the ski areas were off in their claims by $86,000. If there is a dispute to any amount, the claims can be disqualified, the Liftopia attorneys argued. The resort operators countered, arguing the motion to dismiss was “spurious” and an attempt to buy time “rather than taking responsibility for its financial missteps when faced with the reckoning of the involuntary petition.”