exv10w1



 





Exhibit 10.1




August 6, 2007




Mr. Robert A. Katz

Chief Executive Officer

Vail Resorts, Inc.

390 Interlocken Crescent

Suite 1000

Broomfield, CO 80021



Dear Mr. Katz:




     I am writing in response to your letter to me dated July 27, 2007. The letter contained a
number of inaccurate assertions; we believe it is important to bring these to your attention and to
correct the record.



     We wrote to you on July 16, 2007, to advise you of our termination of discussions with Vail
Resorts, Inc. concerning a possible acquisition of The Canyons ski resort. (I am enclosing a copy
of our prior letter for your reference). Your letter to me and Vail’s public filings suggest that
there was an agreement between Vail Resorts and American Skiing Company regarding a sale of The
Canyons. We clearly had not reached even oral agreement. There remained substantive and material
open issues between the parties. One agreement between Vail Resorts and ASC does exist and that is
a Confidentiality Agreement dated June 7, 2007. That agreement unambiguously states, “unless and
until a definitive agreement between the Company and you with respect to any Transaction has been
executed and delivered...the Company will not be under any legal obligation of any kind whatsoever
with respect to such Transaction by virtue of ...any written or oral expression with respect to such
Transaction.” You should be aware that we view Vail’s broad release of the July 27 letter to the
media as a clear breach of our binding Confidentiality Agreement. We were disappointed to learn
that this was not the first, nor only breach of Vail’s confidentiality obligations. Vail’s legal
complaint against Peninsula Advisors and others outlines additional breaches as the Vail management
team engaged in discussions regarding a possible transaction with third parties.



     Vail’s conduct in connection with our discussions has raised serious concerns. Your legal
filings assert that there was a written agreement with third parties regarding a potential purchase
of The Canyons. Vail did not disclose this agreement to American Skiing and Vail was prepared to
represent that no such agreement existed. When we were informed of the existence of the agreement
by third parties, a Vail senior officer categorically denied its existence.



 









 





			
	 
	 	August 6, 2007

Letter to Robert A. Katz

Page 2






     We were also disturbed to learn from your filings that Vail demanded a third party not contact
American Skiing when Vail was in discussions with them about The Canyons. We were completely
unaware of these negotiations, which were in violation of our confidentiality agreement. As we
previously advised you in our letter of July 16, American Skiing Company reserves all of its rights
against Vail, including to the extent that Vail’s conduct resulted in damage to the selling price
of The Canyons.



     Finally, your letter falsely suggests that the directors of American Skiing Company may have
breached their obligations because they did not engage in discussions with Vail Resorts to reach a
more favorable transaction. On the contrary, we were informed by Vail on more than one occasion
that its $95 million offer with limited indemnity provisions was as far as you would go. In the
course of these discussions, Vail reneged on its previously communicated willingness to purchase
The Canyons for $110 million. We view your response of submitting an offer two weeks after we
publicly announced our binding agreement for The Canyons resort with another party as disingenuous.



     I am disappointed by both Vail’s conduct during the negotiation period and the actions it has
taken since we announced the definitive sale agreement for The Canyons. We believe that Vail’s
decision to pursue litigation is ill-advised and unjustifiable.



	 	 	 	 	 
	 	Sincerely,

 	 
	 	/s/ Steven B. Gruber
 	 
	 	Steven B. Gruber 	 
	 	Chairman of the Board of Directors

American Skiing Company 	 
	 


Enclosure: Letter from American Skiing Company to Vail Resorts, Inc. dated July 16, 2007



cc: Vail Resorts, Inc. Board of Directors


 









 








July 16, 2007

Vail Resorts, Inc.

390 Interlocken Crescent

Suite 1000

Broomfield, CO 80021

Attention: Jeffrey Jones



Dear Sirs:




          American Skiing Company (the “Company”) hereby advises Vail Resorts, Inc. (“Vail Resorts”)
that it has terminated all discussions concerning a possible acquisition of the ski resort known as
The Canyons (the “Transaction”). Pursuant to paragraph 9 of the Confidentiality Agreement, dated
June 7, 2007, between Vail Resorts and the Company (the “Confidentiality Agreement”), the Company
has no legal obligation of any kind whatsoever with respect to the Transaction because the parties
have not entered into a definitive written agreement with respect to any Transaction. Moreover, the
parties were not able to agree upon the material terms of a transaction, including indemnification
provisions, third party consents and closing conditions. Thus, not only was there a failure to
reach definitive documentation generally, there was also a failure on material terms.




          In addition, as previously communicated, the Company has been informed by third parties that
Vail made arrangements with another potential bidder regarding the assets in question that were not
disclosed to the Company. The Company reserves all rights in connection therewith, including
without limitation, to the extent that such arrangements may have damaged the selling price for the
asset in question. Vail should cease involvement with, or interference in, any Company matter or
any Company transaction, unless the express written consent of the Company is provided.




          In accordance with paragraph 11 of the Confidentially Agreement, the Company hereby requests
that Vail Resorts return the Evaluation Material (as defined in the Confidentiality Agreement) in
its possession or the possession of its representatives to the Company.




	 	 	 	 	 
	 	Very truly yours,



AMERICAN SKIING COMPANY

 	 
	 	By:  	/s/ Foster A. Stewart, Jr.
 	 
	 	 	Name:  	Foster A. Stewart, Jr.     	 
	 	 	Title:  	Senior Vice President and General Counsel 	 
	 



	 	 	 
	cc:

	 	Steven B. Gruber

BJ Fair

Fiona Arnold, Esq.