ERIE — A U.S. Bankruptcy Court has given Conneaut Lake Park a week to explain how it will finance its operations this year or face a court-ordered sale and liquidation.
At a hearing Tuesday in U.S. District Court, Chief U.S. Bankruptcy Judge Jeffrey Deller told the amusement park’s lawyer to present details next week about how the park would finance this season’s operations.
The judge said that only after receiving that information at a hearing next Tuesday at 10 a.m. will he decide if the amusement park will be allowed more time to file its bankruptcy plan.
Lawyers for Conneaut Lake Park and its creditors were in federal courtrooms in Erie and Pittsburgh Tuesday via teleconference to argue whether Trustees of Conneaut Lake Park should be given until June 30 to file a Chapter 11 bankruptcy reorganization plan for the amusement park.
Trustees of Conneaut Lake Park is the nonprofit corporation that oversees the amusement park’s operation. The corporation filed for federal bankruptcy protection in December 2014.
George Snyder, the park’s bankruptcy attorney, has filed a motion seeking an extension until June 30 to file the debt reorganization plan. The Trustees’ Chapter 11 reorganization plan was due by April 3.
Before issuing a ruling on the extension request, Deller said he wants details of how the park will finance its 2015 operating season.
Snyder explained Con-neaut Lake Park is attempting to line up $300,000 in working capital for the season, including a $150,000 loan from the Economic Progress Alliance of Crawford County, Crawford County’s lead economic development agency.
At last week’s board meeting of Trustees, officials said the other $150,000 needed may come from a loan from the Northwest Regional Planning and Development Commission, a regional economic development agency. The commission is not expected to act on the Trustees’ loan application request until the commission’s May 7 meeting.
Trustees didn’t have commitment letters for the financing to present to the judge as yet, Snyder said at Tuesday’s court hearing.
“It’s not a commitment until it’s committed,” Deller said of the financing.
Deller also asked why there were no representatives from Trustees of Conneaut Lake Park at Tuesday’s hearing, which the judge said indicated Trustees weren’t supporting the project.
Snyder apologized to the court and said he did not ask for any representatives of the Trustees to accompany him to Tuesday’s court hearing.
Contacted by the Tribune following Tuesday’s hearing, Mark Turner, executive director of Trustees, said he will be prepared to outline the financing options to bankruptcy court next week.
The park’s creditors are prepared to file a Chapter 11 reorganization plan for Conneaut Lake Park calling for the sale of the amusement park to pay off its debts, according to Larry Bolla, the attorney representing the park’s four Crawford County taxing bodies.
“I just don’t see how this debtor, no matter how well intended, can open its doors,” Bolla told the court. “The park’s time has come and gone.”
Bolla represents the Conneaut School District and the governments of Crawford County and Sadsbury and Summit townships, which are owed more than $927,000 back real estate taxes, interest and penalties.
The four taxing bodies filed suit against the park last September in Crawford County Court of Common Pleas trying to foreclose on the amusement park and force a sheriff’s sale for the overdue property taxes. The amusement park then filed for bankruptcy protection in early December, staying a proposed sheriff’s sale. Conneaut Lake Park’s total debts are about $3.8 million, according to bankruptcy court records.
Determining who should get a $611,000 insurance settlement from a fire at Conneaut Lake Park still isn’t resolved, Snyder and Bolla said.
A federally appointed mediator met April 15 with all parties involved in a dispute over who gets the insurance settlement for the August 2013 fire that destroyed the Beach Club night club.
There are three groups wrangling over the money — the Trustees; Park Restoration LLC, which operated and insured the Beach Club through a management agreement with Trustees; and the four taxing bodies that filed suit against the park.
The parties are still in negotiations to resolve the insurance issue, Snyder and Bolla said.
The back real estate taxes and penalties on the Beach Club properties amounts to approximately $515,000, Bolla said. Any remaining balance of the $611,000 in insurance money would be left for Trustees and Park Restoration, he said.
Keith Gushard can be reached at 724-6370 or by email at firstname.lastname@example.org.