Testimony begins in Keystone season pass trial
September 22, 2009
BRECKENRIDGE – Early Keystone investors said Tuesday in Summit County District Court that their lifetime season passes were issued without any restrictions.
They also showed a series of letters and memos from Keystone International referring to two different types of passes, including the “lifetime transferable and negotiable passes” at issue in a jury trial scheduled to last two weeks.
The pass holders are suing Vail Resorts to regain the right to rent out the transferable lifetime passes issued in the early days of Keystone’s existence. Those early stockholders received five of the transferable passes for every $25,000 they invested in the company.
Vail Resorts stopped honoring the transferable passes in 2006, 10 years after the resort company bought Keystone from Ralston Purina. Vail Resorts won’t comment on the litigation, but resort spokesperson Kelly Ladyga said previously that the company would defend its rights in the face of ski pass privilege abuse.
Koert Vorhees, one of the original members of Keystone International’s board of directors, took the stand to describe how he and fellow investors faced complex rules regarding use of the passes from the start.
Vorhees said his family began using the transferable passes as a way to give added value to the rental of a Dillon condo.
“We told the building manager, if you can rent our unit, throw in the passes with the rental,” explaining how the passes worked as an incentive for rentals. At the same time, Vorhees said his family permitted the building manager to use the passes themselves, or to share them with others as a reward for good service, for example.
Later, they used a local agent to rent the passes to other skiers. Attorneys for Vorhees and the other plaintiffs showed letters from agents indicating that they earned between $700 and $1,500 per month by renting the passes.
The plaintiffs were trying to show how widespread and common the transfer of those passes was up until Vail Resorts imposed new restrictions in 2006. They claim that Vail Resorts changed the rules and breached its contract with the pass holders.
In his testimony, Vorhees said the passes were rented openly and the income was documented because all of the pass owners believed there were no restrictions on renting them.
At one point, Vorhees said he even considered donating some of the passes to the local Rotary Club.
Vorhees said the revenue from the pass rentals is an important part of his family’s retirement income.