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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest reported) May 20, 2002
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American Skiing Company
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(Exact name of Registrant as specified in its charter)
Delaware I-13057 04-3373730
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
P.O. Box 450, Bethel, Maine 04217
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including are code (207) 824-8100
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Item 5. Other Events
As of May 20, 2002, the Company's real estate development subsidiary,
American Skiing Company Resort Properties, Inc., ("ASCRP") was in payment
default under its senior secured credit facility with Fleet National Bank
("Fleet") and certain other lenders (the "Real Estate Credit Facility") due to
the failure to make certain required payments of principal and interest under
that facility, and all cure periods with respect to such payment default had
expired. On May 21, 2002, attorneys representing the lenders under the Real
Estate Credit Facility orally notified ASCRP that the lenders would be
accelerating the entire remaining principal and accrued interest in the amount
of approximately $63.4 million under the Real Estate Credit Facility. Management
continues to negotiate the terms of modifications to the Real Estate Credit
Facility with Fleet and the other lenders, and is hopeful that a mutually
acceptable revision to the terms of the Real Estate Credit Facility can be
attained prior to the exercise by the lenders of the remedies available to them
under the Real Estate Credit Facility. However, no assurance can be given that
an acceptable revision to the Real Estate Credit Facility will be reached, and
attorneys representing the lenders have indicated to the Company that the
lenders will simultaneously be pursuing their secured creditor remedies under
the Real Estate Credit Facility while such discussions continue. The remedies
available to the lenders include, but are not limited to, setoff of cash
collateral accounts in ASCRP's name held at Fleet in the amount of approximately
$0.8 million, foreclosure of real and personal property owned by ASCRP and
pledged to the lenders (including all of the capital stock of the Company's
hotel development subsidiary, Grand Summit Resort Properties, Inc. ("GSRP")),
and other customary secured creditor remedies. A substantial portion of the
Company's developable real estate, including all of the developable real estate
at The Canyons resort in Park City, Utah and certain key development parcels at
Killington, Vermont and Steamboat, Colorado, is pledged to Fleet and the lenders
under the Real Estate Credit Facility. The commercial core units at the Sundial
Lodge at The Canyons and the Mount Snow Grand Summit Hotel in Vermont are each
also pledged to Fleet and the lenders under the Real Estate Credit Facility.
In addition, as of May 20, 2002, GSRP was in payment default under its
construction loan facility with Textron Financial Corporation ("Textron") and
certain other lenders (the "Textron Facility"), due to the failure to make
certain required payments of principal and interest under that facility, and all
cure periods with respect to such payment default had expired. On May 17, 2002,
attorneys representing Textron orally notified the Company that Textron had
tentatively approved revisions to the Textron Facility which management of the
Company expects would be sufficient to cure the outstanding payment defaults and
meet the short-term cash flow needs of GSRP. However, the remaining lenders
under the Textron Facility have not yet approved such revisions, and the
revisions have not yet been reduced to mutually agreed upon written
documentation. No assurance can be given that GSRP will be able to reach a
mutually acceptable agreement with Textron and the lenders under the Textron
Facility. All of the Company's remaining unsold quartershare hotel inventory at
the Grand Summit Hotels at The Canyons and Steamboat, together with the
commercial core units at the Grand Summit Hotels at The Canyons, Steamboat and
Attitash, New Hampshire, is pledged to Textron and the other lenders as security
for the Textron Facility.
Management does not believe that the payment defaults under either the
Real Estate Credit Facility or the Textron Facility will create defaults under
the Company's senior secured resort facility with Fleet National Bank and
certain other lenders or the Indenture governing the Company's $120 million
Senior Secured Notes due 2006. The payment defaults and the exercise of secured
creditor remedies by the lenders under the Real Estate Credit Facility and the
Textron Facility are similarly not expected to substantially adversely affect
current operations at any of the Company's resorts, although no assurance can be
given that the loss of developable real estate at the Company's resorts will not
adversely affect future resort operating results by reducing future growth of
resort bedbase.
THIS CURRENT REPORT ON FORM 8-K CONTAINS OR INCORPORATES BY REFERENCE
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THESE
STATEMENTS MAY DIFFER MATERIALLY FROM ACTUAL FUTURE EVENTS OR RESULTS. READERS
ARE REFERRED TO ALL DOCUMENTS FILED BY AMERICAN SKIING COMPANY WITH THE
SECURITIES AND EXCHANGE COMMISSION, WHICH IDENTIFY IMPORTANT RISK FACTORS THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER FROM THOSE CONTAINED IN ANY FORWARD-LOOKING
STATEMENTS.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN SKIING COMPANY
Date: May 22, 2002 /s/ William J. Fair
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Name: William J. Fair
Title: President and Chief Executive
Officer
Date: May 22, 2002 /s/ Mark J. Miller
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Name: Mark J. Miller
Title: Senior Vice President
Chief Financial Officer