Concerned Unit Owners of the Inn of the Seventh Mountain (Central Oregon)

Ball Janik LLP represented several prominent unit owners in a derivative action against the Inn of the Seventh Mountain Association of Unit Owners (AUO) and in connection with direct claims of minority shareholder oppression and breach of fiduciary duty, among others, against certain AUO directors. The claims stem from a hastily passed $17.7 million special assessment to pay for certain repairs and improvements at the Inn. The special assessment was passed in order to secure a $6.2 million credit against the special assessment on behalf of a corporate owner at the Inn, who controls over 47% of the ownership and voting rights within the AUO. We also represented many of these same owners in separate but related litigation brought by the AUO for a declaratory judgment that efforts to remove the AUO board had been unsuccessful.

At the end of August, 2008, the cases were settled, with the parties agreeing to a mechanism for reducing the cost of the repairs and improvements (with a corresponding decrease in the amount of special assessment), a dispute plan for addressing the legitimate amount of the credit requested, and meaningful reforms to the AUO’s bylaws and declaration.

Bruce H. Cahn (litigation partner) handled the case for the unit owners.