The countdown to a new owner for Conneaut Lake Park — who will maintain public access to the historic park — is underway.
Calling it "a good plan," U.S. Bankruptcy Court Judge Jeffrey A. Deller on Tuesday gave approval to Trustees of Conneaut Lake Park's motion to auction off the park's assets for at least $1.2 million on March 2. Deller's approval came following a 25-minute hearing held via video conference by U.S. Bankruptcy Court for Western Pennsylvania.
Trustees of Conneaut Lake Park, the nonprofit corporation that oversees amusement park operations, filed for federal Chapter 11 bankruptcy protection in 2014. Bankruptcy court rules require court approval for the sale of any assets.
The upcoming auction will be for the park's assets, which include the amusement park, water park, beach area, Hotel Conneaut and the Camperland campground, as well as active leases on assets.
The successful bidder will be required to allow continued public access to the park’s property. Certain parts of the property have restrictions requiring it to be open for use by the general public.
"We're off-and-running," Jim Becker, executive director of Trustees of Conneaut Lake Park, told the Tribune following Tuesday's video conference.
Under the Trustees’ auction plan, there is a minimum bid of $1.2 million for the assets with Keldon Holdings LLC listed as a qualified stalking-horse bidder.
A stalking-horse bid is an initial bid on the assets of a bankrupt company. The stalking-horse bidder sets the minimum bid. Under the Trustees' plan, Keldon Holdings LLC based in Narbeth, a Philadelphia suburb, is a qualified bidder.
Todd Joseph of Keldon Holdings LLC, as well as attorney Peter Meltzer, who represents Keldon Holdings LLC, attended the video conference. Neither addressed the court during the hearing.
The Trustees' attorney, Jeanne Lofgren of Stonecipher Law Firm, told Deller that Joseph became interested in Conneaut Lake Park in late fall when closing on another real estate transaction in the vicinity of the park. Joseph then expressed an interest in the park's assets to John Swick, a Meadville attorney who serves as special counsel to Trustees of Conneaut Lake Park.
Lofgren said Keldon's intent is to keep the park operating as an amusement park.
On Dec. 17, 2020, Trustees entered into a purchase and sale agreement with Keldon Holdings LLC to buy all the assets for $1.2 million in cash with no financing contingencies. Under the agreement, Keldon will place a total of $500,000 into an escrow account three days prior to the court-set auction date.
Trustees want to move forward with an auction through Bankruptcy Court to offer competitive bidding for the assets and at the same time give financial protections to Keldon, according to Lofgren.
Lofgren said the Pennsylvania Office of Attorney General has indicated it doesn't object to the sale as long as the public access provisions remain.
Guy Fustine, who represents Conneaut Lake Park's secured creditors, told the court that the creditors did not object to the sale plan.
Any objections to the sale must be filed with the court by Feb. 17.
Any bids from other court-approved, qualified bidders must be higher than Keldon’s $1.2 million and be submitted to the court by Feb. 19, according to court documents.
The first bid other than from the stalking-horse bidder must be $100,000 higher, or $1.3 million, with subsequent bidding increments of at least $50,000.
Like Keldon, all other bidders will have to be qualified and place $500,000 into escrow three days prior to the sale.
To be become a qualified bidder, there must be signed a confidentiality agreement with Trustees and as well as documentation that the bidder has the financial ability for a $1.3 million purchase price. That must be in place before Trustees release additional information on the park's assets to the potential bidder.
Becker told the Tribune that Trustees already has received a half-dozen inquiries from other potentially interested parties after the court filing about the auction request made the news last week.
"There are a lot of people out there who have always expressed interest in purchasing Conneaut Lake Park, but having the actual financial wherewithal to do it — it's a much smaller pool of prospective people," he said.
Becker told the Tribune that having a bidding plan that was fair to all potential parties was key in getting the court's approval Tuesday for the proposed auction.
"This is a big step; the judge agrees with our plan, our procedures, it's a uniform process," Becker said. "If there are other bidders, we want them to be treated the same way as our stalking-horse bidder has been treated so there's no true advantage or disadvantage for not only the first bidder, but any subsequent bidders."
Crawford County Commissioner Christopher Soff, who serves as the county's representative on the board of the Economic Progress Alliance of Crawford County (EPACC), called it a positive move.
The EPACC serves as the county's lead economic development agency. Its board members and community members make up the Trustees of Conneaut Lake Park's volunteer board of directors. EPACC staff has served as administrators of the amusement park
"I think it's a positive step for the county and the Economic Progress Alliance," Soff said. "They came in and filled a void when it was needed. The idea never was the EPACC would serve as the owner-manager of Conneaut Lake Park forever. It was always the plan to get that facility back into private hands while maintaining public access."
Keith Gushard can be reached at 724-6370 or by email at email@example.com.