48 Straight, a Wood River Valley-based organizer and promoter of ski, snowboard and entertainment events, is suing auto manufacturer Jeep for breach of contract.
Ketchum attorney Miles Stanislaw, representing 48 Straight, said the claim was filed in BlaineCounty on Dec. 26 after Jeep failed to provide an agreed-upon payment at the end of November.
Jeep, an arm of embattled auto company Chrysler, was the title sponsor of 48 Straight and had a contract to provide $7.8 million, most of the event’s funding, through summer 2010. The funding was to come in the form of nearly $2.9 million per year during that time.
However, as stated in the claim, Jeep sent a letter to 48 Straight at the beginning of October to terminate its sponsorship of the event, originally known as the Honda Ski Tour during its inaugural year in 2007.
A call to Jeep was not returned by press time.
Last year, Ski Tour co-founders, Ketchum residents Kipp Nelson and Steve Brown merged the company with Eclipse Television and Sports Marketing, which put on the Jeep King of the Mountain skiing and mountain biking events. The new entity was renamed 48 Straight.
Without a title sponsor, 48 Straight was forced to cancel its events, scheduled to take place this winter in Telluride, Colo., Squaw Valley, Calif., and Sun Valley.
In the claim, Stanislaw writes that Jeep’s letter in October amounted to a wrongful termination of contract, which “destroyed (48 Straight’s) business.”
In November, 48 Straight accepted a $2 million offer from Jeep to buy itself out of the sponsorship agreement. According to Stanislaw, Jeep was required by the agreement to pay 48 Straight $1.5 million by Nov. 30, with the remainder to be paid by Jan. 15. The suit claims that since Jeep did not provide any payment by the November deadline, it breached the settlement agreement.
Stanislaw said that if Jeep doesn't pay the $2 million, then 48 Straight could pursue payment of the entire $7.8 million.
If 48 Straight is awarded the entire amount of the original sponsorship agreement, the owners would look into the possibility of rescheduling the events, Stanislaw said.
“Jeep probably didn’t pay its bills because of its financial problems,” Stanislaw said. “But this, in turn, gives other people financial problems as well. It’s like a homeowner not paying a mortgage. 48 Straight still has a lot of outstanding obligations.”
Stanislaw said Jeep has 20 days to respond after being served notice of the claim.
Kipp Nelson
