Posted Monday, November 29, 2010 11:44 AM | Contributed by Jeff
Randal H. Drew, CEO of PARC Management, denies that his company ever defaulted on any of its obligations to CNL Lifestyles Properties Inc., the owner of Darien Lake Theme Park Resort. CNL last week terminated its leases with PARC Management on 18 attractions, including Darien Lake. In a Nov. 17 filing with the U.S. Securities and Exchange Commission, CNL claimed that PARC Management defaulted in October on lease and loan obligations.
Read more from The Daily News.
Am I the only one scratching his head over this whole thing? The article sums up how we got here--
PARC, through its affiliated PARC 7F-Operations Corp., purchased Darien Lake and six other theme or water parks from Six Flags Inc. in a $312 million deal. PARC simultaneously sold the properties to CNL Income Properties Inc., later renamed CNL Lifestyles Properties, in a deal that included $290 million in cash and a note receivable of $22 million. CNL then leased the properties back to PARC Management through a long-term, 52-year triple-net lease. The leases required PARC to pay the properties' operating expenses and make monthly rent payments to CNL.
Back when that happened, I figured that this was one of those liability-limitation deals where the company splits itself into a bunch of related companies, so that one company owns the parks while another is responsible for operating them. It's not an uncommon arrangement; it is also a method by which a public company can do business as its own private subsidiary. But usually when that happens, it's all one big happy family. What we are seeing here is decidedly not what looks to be one big happy family; in fact it looks like CNL is actively trying to force PARC out of the picture entirely.
Bottom line is, I'm confused and surprised. :)
--Dave Althoff, Jr.
The fact that your confused and surprised, confuses and surprises me.
If Dave doesn't understand, what hope do the rest of us have. :)
I'm throwing in the towel right now. ;)
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