Judge approves bankruptcy for Conneaut Lake, park will continue to operate

Posted | Contributed by slithernoggin

A U.S. Bankruptcy Court judge on Tuesday approved a reorganization plan that will allow the amusement park to continue operating while it pays nearly $3.5 million in debts. The plan will allow the park to sell property and make quarterly payments from operating revenues to pay debts.

Read more from The Erie Times-News.

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3.5 million! Yikes!
In a strict business sense it probably isn't a lot. In a Conneaut Lake sense it's a butt-load. Think what they could do with that money otherwise.

Jeff's avatar

Doesn't seem like a good deal for the creditors. They'll never get that money back with some minor land sales and net income of $150k a year.

Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

Article isn't well researched/written. Says court approved sale of real estate for $260,000 which will be used to pay back taxes and possibly other debt. But back taxes are $1.3 million. Another article I found indicated that there are 5 parcels of land worth $260k each. That would be $1.3 million total which makes more sense. Still a lot of debt to repay though.

What options did the creditors have? Liquidate the park now? How much value would that yield? Presumably the park can be liquidated later if this plan fails. The creditors are also working against what the debtor wants to do (keep the park open) and the bankruptcy court which tends to have the same bias (as a court of equity).

More meaningful than net income is how much cash flow the park generates per year. EBITDA would be more helpful.

rollergator's avatar

The creditors (other than government entities) in all likelihood asked for high rates of interest since they presumably knew in advance they were taking on a risky borrower. Not saying they don't deserve to be paid, but I'm having a hard time imagining CLP coming up with that kind of money while paying their new bills, paying employees, and maintaining the rides...

You still have Zoidberg.... You ALL have Zoidberg! (V) (;,,;) (V)

August Mueller's avatar

CLP is part carnival, part railway park, part residential, and completely abominable. I would love to see this place become successful and prosperous.. It's just that I can't ever see that happening despite how many decades this drags on. The other operational Traver-bug and a Vettel-out and back are hardly a lure. Gotta love the never-give-up philosophy ...good luck with that.

rollergator's avatar

If I'd told you 20 years ago that CLP would outlast Geauga Lake, you'd have had me straitjacketed....

Not saying I shouldn't be, but wow....

You still have Zoidberg.... You ALL have Zoidberg! (V) (;,,;) (V)

Lord Gonchar's avatar

rollergator said:

If I'd told you 20 years ago that CLP would outlast Geauga Lake, you'd have had me straitjacketed....


rollergator's avatar

Should have known...

(P.S. Now you have an alphabet's worth for that one). ;~P

You still have Zoidberg.... You ALL have Zoidberg! (V) (;,,;) (V)

Lord Gonchar's avatar

Great minds....blah blah blah.

Park is expecting $150,000 of net income for 2016. That would be after paying new bills, employees, maintaining rides, etc. Depending on non-cash expenses, the park should have $150,000+ in cash flow. Bankruptcy plan requires payments to be made over 11 years. At $150,000/year, that is $1.65 million in the aggregate. With sales of the non-core real estate (for $1.3 million), there would be $2.2 million in existing debt. 75% dividend to creditors is pretty good for a bankruptcy case. And there may be more than $150k per year in cash flow.

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