LTV Hits the Slopes

LTV Corporation is having a devil of a time with its Colorado ski resort, Steamboat Springs, in part because of troubles at a nearby competitor, Vail. For some time LTV has been trying to sell Steamboat Springs, which has run more than $12 million in the red during the last three and one-half years. LTV was quite close to selling the ski resort last spring when two gondola cars fell from their cables at Vail, March 26, killing four persons and injuring eight. Because Steamboat Springs, like Vail, operates a gondola manufactured by Switzerland’s Bell Tramway, Steamboat’s potential buyers became nervous.

The investors were headed by a Baltimore developer, Ware Travelstead, who became interested in running a ski resort after working for Dick Bass at Snowbird. Last fall Travelstead had a deal worked out to buy Steamboat from LTV, in which Twentieth Century Fox would buy 80 percent. But at the last moment Fox said it wanted 100 percent, and the deal fell through.

Within a couple of months Travel-stead had assembled a new group of buyers, including New York Yankees owner George Steinbrenner, and former New York City Mayor John Lindsay, who probably would have joined the investors had the deal gone through.

According to a Travelstead attorney, the contract was signed last April, when the group handed LTV two bank letters of credit for $1.1 million, which LTV never cashed. While the Travelstead group was lining up the remaining financing – $11 million cash – government authorities began investigating what modifications should be made in the gondolas at Vail and also at Steamboat Springs. The more the Colorado Passenger Tramway Safety Board looked into the matter, the more skittish Travelstead’s bankers became, until finally his bank financing dissolved. The deal fell apart in mid-July, with Travelstead’s group claiming LTV had agreed to finance the sale of Steamboat temporarily, until the gondola problems were worked out. (Vail is spending $2.7 million modifying its chair lifts and one remaining gondola. Steamboat is modifying its one gondola at a cost of $140,000.)

Now the Travelstead group has sued LTV for $15 million compensatory damages, claiming LTV backed out of its agreement one day after the agreement was made. The plaintiffs are also asking that if a jury should find LTV liable for some amount of compensatory damages, that double that amount also be awarded in exemplary damages. LTV claims no such agreement existed. The plaintiffs lawyers were in Dallas in mid-October, taking depositions from top LTV officials, including chairman Paul Thayer and president Raymond Hay.