This is an archived article that was published on sltrib.com in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
The Canyons ski resort wants to deduct its $3 million annual fee to lease ski terrain from the $60 million that Wolf Mountain LLC owes it because of a jury award.
Since the April trial, however, Wolf Mountain has declared bankruptcy and its principal, Kenny Griswold, has sold his interest in the company.
In a filing in Judge Bruce Lubeck's 3rd District Court, attorneys for The Canyons argue it shouldn't have to pay the annual fee on Summit County land it leases, because Wolf Mountain owes $54 million in damages stemming from a 2006 lawsuit. Including attorney fees and court costs, Wolf Mountain owes The Canyons about $60 million.
The $3 million lease fee, which covers all terrain within the resort, is due Thursday.
The 2006 dispute centered on real estate development and a golf course. The Canyons claimed Wolf Mountain interfered with development by withholding land it had previously pledged.
Two weeks after the jury award, Griswold filed for Chapter 11 bankruptcy protection in California on behalf of Wolf Mountain. That reorganization is ongoing, said Park City-based attorney Joseph Wrona, who represents Wolf Mountain.
Griswold and partner Michael Baker no longer own Wolf Mountain, Wrona added. Their majority interest in the company has been purchased by Kenneth Abdalla, a Park City resident with California ties.
Wrona said Thursday that if The Canyons were 00allowed to withhold the $3 million lease payment "it would harm the [Wolf Mountain] reorganization effort."
And withholding such payments is forbidden under the lease, Wrona said.
But according to Salt Lake City-based attorney John Lund, who represents The Canyons, the resort is legally entitled to withhold the payment.
"It would be grossly inequitable for Wolf Mountain to enjoy the benefits of the ground lease transaction ... while at the same time being indebted in the amount of $54 million [plus $6 million in other costs] to The Canyons for not having met its obligations under that very same contract," the court filing states.
Beyond that, The Canyons accuses Griswold of attempting to disperse Wolf Mountain assets after the jury verdict.
"Mr. Griswold, acting on behalf of Wolf Mountain, executed and recorded a deed fraudulently conveying several valuable parcels of land to insiders comprised of Wolf Mountain's other primary members, Michael Baker and Wasatch Capital."
But Griswold denied the allegations Thursday in a telephone interview from his California home.
"There is no truth to it being fraudulently transferred," he said. "That all happened six years ago, before the lawsuit."
Griswold confirmed the sale of his Wolf Mountain shares, saying, "I think it turned out well for everybody."