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Wednesday, 08 April 2009 16:04

Ghost Town partners establish own credit line

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Owners of Ghost Town in the Sky hope to funnel up to $500,000 into the amusement park in order to get it open by summer.

A recently created limited liability corporation called Resurrection Partners has emerged as a vehicle to provide the beleaguered theme park much needed cash. The line of credit would be provided at least in part by Ghost Town partners themselves, according to Ghost Town CEO Steve Shiver. By funneling the cash through a separate entity, the investors have a shot at recouping their money should the park go under.

The park needs “emergency and immediate approval of financing,” without which “the park will not be able to open and operate for the 2009 year,” according to bankruptcy filings. The line of credit would provide money for payroll and “expenses commensurate with the opening preparations.”

Resurrection Partners, LLC, was created in early March. Lynn Sylvester, a Waynesville accountant who serves as Ghost Town’s CPA, is listed as the registered agent for Resurrection. Sylvester is also an equity member in Ghost Town. He is also listed among the creditors in the bankruptcy filing, with a claim of $74,000 for accounting services and fees.

The other players in Resurrection Partners are not known, but Shiver has previously said the owners of the park will be putting up money to get the park reopened.

“You should all be thanking us because we are putting our money where our mouth is to make something work that benefits all of Haywood County,” Shiver said.

However, those putting up money through Resurrection would only do so if they could be granted super-priority status, according to the filings. That means they will be among the first in line to get paid back if the park doesn’t pull through a reorganization and is liquidated.

Resurrection is second in line behind a $6.5 million bond held by BB&T for the property’s purchase. They are ahead of more than 200 other creditors owed money by Ghost Town. They are even in front of a $3 million loan by BB&T for property upgrades.

Ghost Town owners originally asked the court to approve a $100,000 line of credit through Resurrection. After it was approved, they returned to the court and asked for it to be increased to $500,000. They claimed the initial request for $100,000 was an “error in communication,” according to bankruptcy filings, and that they had always intended for it to be $500,000.

But in a phone interview two weeks ago, Ghost Town CEO Steve Shiver said the initial request for $100,000 was a “place holder.” Shiver said they needed the bankruptcy court to approve the concept of a line of credit from Resurrection first, and would then ask for it to be increased.

The larger the line of credit gets, the further back in line the other creditors are pushed.

The bankruptcy court will track how much is actually passed to the park through the line of credit, with the ability to ask for bank statements and cashed checks. This ensures Resurrection only stands to get back the amount it puts in.

The court will also track how it is used. The court will want to see the money used to help the park remain solvent rather than salaries for the park’s owners, for example. The court would not allow Resurrection to be a vehicle for funneling money to the owners while other creditors on the list remain unpaid.

Shiver said Ghost Town plans to fight a liquidation.

“That is not in the best interest of the creditors and the Maggie Valley businesses we owe money to, our bond holder and our investors,” Shiver said.

The park has a trail of unpaid bills with more than 215 companies totaling $2.5 million. That’s on top of a $6.5 million bond to purchase the park and a $3 million loan for upgrades to the property. The park owes another $200,000 in back sales tax and property tax. The bankruptcy filing doesn’t reflect the numerous private investors who put up money over the past two years in exchange for an equity stake in the company but may never see a return.

Comments from Shiver in this article were made a week and a half ago. Shiver would not return phone calls and emails seeking comment this week. Sylvester did not return phone messages seeking comment, nor did Ghost Town’s bankruptcy attorney David Gray.

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