American Skiing fails to redeem preferred stock; stockholders could appoint directors to board

Chicago, March 7 - Preferred stockholders of American Skiing Co. are demanding payment and could be entitled to appoint directors, the company said in a filing with the Securities and Exchange Commission Friday.

American Skiing did not redeem the preferreds when due Nov. 12, 2002, saying it couldn't assure that the liquidity was available for redemption.

The company is now required by terms of the preferreds to redeem them as funds become available, but is prohibited by doing so under terms of its credit facility amendment.

American Skiing said if it is required to redeem all or any portion of the preferred stock, it could have an adverse effect on business, results of operations and financial condition.

The certificate of designation for the preferred stock provides that holders are entitled to elect two additional members of the company's board of directors upon failure to redeem.

The Park City, Utah company said stockholders have not advised whether they intend to exercise their right to elect two directors at or prior to the next annual shareholders meeting, or whether they intend to take any other action, including legal action. If the holders take legal action to press American Skiing to redeem the stock, the company said it would vigorously contest it.

The company has 36,626 shares of series A preferred stock outstanding, with an accreted value of approximately $61.6 million as of Oct. 27, 2002. The series A preferred stock was redeemable on Nov. 12, 2002 at an aggregate redemption price of approximately $62 million.

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