Conneaut Lake Park is in its second bankruptcy proceeding in two decades. In the mid-90s, Conneaut Lake Park exited its bankruptcy case with a sale of substantially all of its assets in exchange for gold bullion. That’s right: gold bullion.
Since the mid-1990’s, the assets comprising Conneaut Lake Park and its surrounding real estate have been put into a charitable trust for the benefit of the public, providing free access to the beach and the lake, with the ability to walk around the vintage amusement park admission-free. Unfortunately, just placing the assets into charitable trust does not remove the assets automatically from the tax rolls. Accordingly, since 1997, the Trustees of Conneaut Lake Park had been accruing significant real property tax liabilities to the local taxing authorities that went unpaid. Woe for the Park continued in the form of well-intentioned, but not so business savvy volunteers controlling Park operations. Thus, in addition to mounting, unpaid tax liabilities, the Park was operating at deficits while deferring much needed maintenance.
Fast forward to 2013, the Attorney General for the Commonwealth of Pennsylvania steps in and petitions the Orphans Court to oust the then Board of Trustees. The Board is replaced and the new Trustees enter into a management agreement with the Economic Progress Alliance of Crawford County (EPACC) for the Park. EPACC embarks on an ambitious master plan to make Conneaut Lake Park a year-round destination.
The attempt to revamp the Park, however, is met with significant opposition. After 14 years of accrued and unpaid real estate taxes, the local taxing authorities take action to sell the property at tax sale. An attempt to intervene and postpone the sale by the Attorney General’s office is unsuccessful and, on December 4, 2014, the Trustees of Conneaut Lake Park, Inc. found itself it in its current chapter 11 bankruptcy case pending in the Western District of Pennsylvania.
At this point, the debtor’s exclusive time period for filing a plan has passed. The Debtor’s plan of reorganization and a competing liquidating plan proposed by the taxing authorities are in the disclosure statement phase. The Debtor, the taxing authorities, and the main creditor constituencies are currently engaged in mediation to determine whether or not one unified plan may emerge. Stay tuned.