Historic Pennsylvania Amusement Park May File for Bankruptcy to Prevent Sale
Carnivals have existed since the days of medieval kings and queens, but the amusement park as we know it today is a fairly recent invention. The first modern American amusement parks opened at the turn of the century, making the 122-year-old Conneaut Lake Park one of the oldest in the country. Today, Conneaut is beset by financial struggles — but if there’s any truth to a rumored Chapter 11 filing in the works, the park will be protected from sale, and may even be able to expand and become profitable once again. Could filing for bankruptcy breathe new life into the old park?
Economic Progress Director: “I Think that Bankruptcy Could Be Overwhelmingly Positive”
When Conneaut Lake Park first opened its doors to the public in the late nineteenth century, it was a smash hit with the public. The park began with a single modest carousel, and gradually expanded to include a midway, additional rides, and even a ballroom. Despite setbacks from multiple fires, time and time again Conneaut was rebuilt, and continued to draw a healthy body of visitors thanks to numerous attractions and an appealing lakefront location.
But roughly a century after its creation, the park began to slide into neglect and disrepair. Guest attendance tapered off during the 1980s and 1990s, and despite the addition of new rides and updated management systems, the park seemed doomed to fade into oblivion. One after another, rides were auctioned off, and Conneaut was passed from one owner to the next. While the 2000s seemed promising, with new financial support flowing in from Pepsi, a series of several fires ate into the park’s already badly dwindling reserves.
Today, ownership is in the hands of court-appointed trustees, as the preceding owner, Gary Harris, was charged with criminal tax evasion and lost the property in 2001. But despite Conneaut’s classification as a historic site by preservation group American Coaster Enthusiasts, Crawford County commissioners recently voted to sell the languishing park in an attempt to recoup an estimated $910,000 in back taxes.
Even so, there may be hope for the park yet. If the rumors about Conneaut’s future come true, trustees will file for Chapter 11 bankruptcy in order to freeze the sale and protect the park’s assets. So far, there has been no absolute confirmation of that plan — but Mark Turner, executive director of the Economic Progress Alliance of Crawford County, has affirmed that the park’s trustees are at least taking that route into consideration.
Turner himself certainly seems enthusiastic about that plan, stating, “I think that bankruptcy could be overwhelmingly positive, especially in freezing park debt and putting existing debt, including unsecured claims and expired judgments, through the wringer, subject to determination of the bankruptcy court.”
How Bankruptcy’s Automatic Stay Feature Can Give Conneaut Lake Park (and You) a Fresh Start
When Turner talks about freezing debts, he is referring to a principle of bankruptcy known as the automatic stay. While Chapter 11 filings (or at least, hypothetical Chapter 11 filings) like Conneaut’s are extremely uncommon among consumers, who typically file under either Chapter 7 or Chapter 13, all three of these forms share the automatic stay feature, meaning Conneaut can teach consumer filers about what to expect in their own cases.
So what is the automatic stay?
Technically speaking, it’s an injunction (or in other words, a court order). Its purpose is to give debtors a temporary break from the constant demands of their obligations to creditors — you can think of it as extra “breathing room” while the bankruptcy is in effect. It’s a chance to rest, regroup, and move forward with a new plan.
The stay grants this rest period by placing a suspension, or “stay,” on all collection actions while the bankruptcy is in effect. This freeze normally ends when the case is closed or when the filer receives a discharge, though in some cases creditors may be able to convince the judge to prematurely grant a lift on the stay, effectively undoing its protections for the debtor. Provided creditors do not have the stay lifted, it will continue to act as a wall against collection actions, including sales, while in effect.
Needless to say, this can be tremendously beneficial for debtors, regardless of the chapter involved, and is precisely what Turner would like to see for Conneaut. The idea is that the creditor-free rest period afforded by the stay would give the park a rare opportunity to restructure and possibly increase its revenue.
Conneaut’s story may be about a company under Chapter 11, but its basic ideas still apply to individuals under Chapter 13 and Chapter 7. To set up a free and confidential legal consultation with an experienced bankruptcy lawyer, or if you’d simply like to learn more about how our firm may be able to help, call the law offices of Young, Marr & Associates today at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania.