Thursday’s hearing so Vail lawyers could argue for a preliminary injunction to stop the Talisker sale was postponed after ASC officials agreed with Talisker to delay closing the sale of The Canyons until Oct. 1, or after the case is decided by a judge.
But a motion filed by the defendants to disqualify Denver District Court Judge Michael A. Martinez from hearing the case threatens to further stall the litigation.
Wednesday, Martinez was recused from the Colorado lawsuit after attorneys for the defendants argued that any decision from the judge would be tainted because Martinez’s wife, Meghan M. Martinez, is employed by the corporate law firm, Brownstein, Hyatt, Farber, Schreck, which represents Vail Resorts, the plaintiff in the case.
“Brownstein and its shareholders stand to gain if Vail is successful in this case,” court papers filed by ASC, Talisker and Peninsula state. Martinez could not preside over the case without creating the “insurmountable appearance of impropriety,” lawyers for ASC, Talisker and Peninsula Advisors claimed in a motion to disqualify the judge.
“Brownstein was intimately involved in the events leading up to this litigation,” the defendants’ lawyers claimed.
A new hearing had not been scheduled in Denver as of Thursday afternoon.
Additional court filings in Denver show that ASC and Talisker are concerned about how delaying the sale beyond Oct. 1 could affect the coming ski season.
“[The] court’s ruling on plaintiff’s motion for preliminary injunction will likely be delayed past Oct. 1, imposing significant uncertainty as to The Canyons’ operations this winter,” the motion to disqualify Martinez states.
The motion also says,”However, because of the procedural posture of this case, it seems likely that a closing at such a juncture would be beset by uncertainty, creating concern among the businesses and employees in the Park City area, as well as potential winter season guests of The mCanyons, who could choose to take their vacation business elsewhere.”
Officials at American Skiing Co., parent company to The Canyons, recently surprised the ski industry with an announcement that the firm planned to sell The Canyons to Toronto-based Talisker Corp. for $100 million.
That triggered a bidding war with the publicly traded Vail Resorts upping what it says was a prior offer, by offering embattled ASC, which is in the process of dissolution, more than $110 million for The Canyons.
But the offer from Vail came too late, said an ASC official, who added that the company had already made the deal with Talisker.
In response, Vail Resorts Inc. sued ASC, Talisker and the investment firm Peninsula Advisors, claiming the defendants conspired against Vail to scuttle the company’s attempt to purchase The Canyons.
As Utah’s largest ski resort, The Canyons is seen as offering investors lucrative development opportunities at one of the few remaining mountain resort villages in North America.