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Ghost Town in the Sky amusement park was behind on its general liability insurance payments in the months leading up to a massive landslide that originated from its property.

Ghost Town has been struggling with bankruptcy for the past year. It was three months behind on payments for its general liability insurance coverage when the slide occurred on Feb. 5, according to paperwork filed as part of bankruptcy proceedings.

Ghost Town had an arrangement with a finance company to make insurance payments on its behalf. In return, Ghost Town was supposed to make regular payments to the finance company, First Financial.

But Ghost Town got so late on payments that the finance company sent a “notice of cancelation” of coverage effective Jan. 28.

“Your insurance coverage referenced above is hereby cancelled as of the cancellation date indicated,” the notice states. The notice states that Ghost Town had “already received the statutory written notice of our intent to cancel and any cure period has expired.”

Another two weeks passed before Ghost Town sent a payment. On Feb. 10 — a few days following the landslide — Ghost Town wired $27,400 to the finance company to cover the past due bill from the last quarter of 2009 and the current quarter of 2010.

The status of Ghost Town’s account with First Funding for the liability insurance was found online. A payment of $13,000 was due in November of 2009. Three statements were sent out demanding payment over a three-month period.

The words “cancel status” then appear beside the account on Jan. 28. Account records show payments totaling $27,400 were wired on Feb. 10.

Lynn Sylvester, a Ghost Town partner and CPA, said the late payments to the finance company did not result in a lapse of insurance.

“Fact is, our insurance coverage did not lapse, and in fact, was always paid in full by the finance company, First Funding,” Sylvester said. However, First Funding filed paperwork with the bankruptcy court on Jan. 29 stating it had canceled the policy.

Representatives with the insurance company, First Mercury Insurance, would not say whether Ghost Town had general liability coverage at the time of the slide — which falls in the two-week window between the cancellation notice issued by First Funding on Jan. 28 and when the payments were wired on Feb. 10.

“That is between us and the insured,” said Bill Costello, a claims adjuster for First Mercury Insurance Company. Costello is handling a few other liability claims against Ghost Town, but said the company has not received any claims relating to the landslide that he is aware of.

Marcia Paulson, the vice president of administration with First Mercury Insurance in Southfield, Mich., also would not say whether Ghost Town’s insurance had lapsed during the window.

“I don’t know that I could address that. You are not the insured or the insured’s counsel,” Paulson said.

Ghost Town took out the general liability policy with First Mercury Insurance Company in May 2009 with an annual premium of $61,000, according to bankruptcy filings.

A company in bankruptcy reorganization is required to stay current on its insurance. The physical property of a bankrupt company is the only collateral for its debts. The property must be properly insured to protect the interests of those owed money.

BB&T, which is owed $9.5 million by Ghost Town for loans taken out to buy the property and fund upgrades, has the most at stake in bankruptcy proceedings. BB&T filed court papers on Feb. 3 objecting to Ghost Town falling behind in payments for its general liability policy. BB&T attached the notice of cancellation for the policy as an exhibit in the court filing.

Ghost Town had also received cancellation notices for its auto, property and fire insurance, which BB&T entered into the record as well.

BB&T is pushing for liquidation of Ghost Town’s property to pay off its debts rather than allowing it to continue operating under reorganization in the hope it can turn a profit and regain its footing.

The slide originated from Ghost Town’s property where a massive series of terraced retaining walls gave way. Geologists either haven’t determined or aren’t saying whether the slide was due to natural causes or was triggered by failure of the retaining wall.

Ghost Town hired a contractor to make repairs to the retaining wall when a portion collapsed in 2007. But some of the old railroad tie walls were left in place, resulting in a combination of new and old work. That in turn has led to finger pointing by Ghost Town CEO Steve Shiver and Carolina-A-Contracting of Maggie Valley, which did the work in 2007.

While residents wait for answers and 16,000 tons of debris hangs precariously over the Rich Cove community, an army of people are assessing the aftermath of the latest landslide in Maggie Valley.

Representatives from the North Carolina Geological Survey, the Division of Water Quality and the Division of Land Quality have all made trips up the steep mountain to survey the slide site.

Haywood County’s contingent includes its erosion and sediment control team and the county engineer, while geologists from the North Carolina Department of Transportation and an engineer from Ghost Town in the Sky have also studied the impact firsthand.

Yet, not one of these experts has officially determined the clause of the mudslide, which traveled more than a half-mile down the slope, seriously damaging several homes and leading to the evacuation of 45 residents.

They won’t say if the slide is a natural disaster or caused by failed retaining walls on the slope, a terraced system that dates to various time periods. The answer could make all the difference for homeowners, whose insurance policies won’t cover a natural landslide.

For Kurt Biedler, the lingering question is not simply when he’ll return home, but if he’ll be able to go back at all. The foundation of Biedler’s house has been compromised and cracks riddle its walls.

Though Biedler plans to move south of Asheville for now, he is closely watching the response to the slide.

“When one gets displaced from their home, there’s a million questions we have,” said Biedler. “But we know it takes time to get the answers.”

 

Can’t get there from here

The place to go looking for answers undoubtedly rests at the top of the mountain, where Ghost Town’s retaining walls clearly gave way. Whether they caused the slide or the slide caused their failure is still being debated.

But getting up the mountain to fix what’s left has now become an ordeal. The landslide has thrown major debris across at least two parts of Rich Cove Road, blocking the only direct path to Ghost Town by vehicle.

Early Thursday afternoon, a team of geologists from N.C. Geological Survey made their third trip to the slide, along with Marc Pruett, Haywood County’s erosion control officer; and Mark Shumpert, Haywood County engineer.

Fie Top Road provides one detour to the top, climbing up west of the slide on Rich Cove.

Halfway up the road, the team must make a pit stop at a staging area set up on the side of Fie Top. The two trucks are armored with snow chains to tackle the narrow, icy road ahead that snakes across the mountain toward Ghost Town.

But the road only leads so far, and they eventually park the trucks and hike down a steep, snow-covered path.

Rick Wooten, senior geologist with the N.C. Geologic Survey, said the main goal that day was to familiarize themselves with the site, collect information, take photographs and define hazardous areas that are prone to landslides in the future.

“Public safety is the important thing at this point. That’s really our focus,” said Wooten. “We’re really not in the position or have the expertise to assess the wall. We’re geologists and not engineers.”

Still, Wooten has said that heavy snowmelt and more than two inches of rain both contributed to the slide. He has put in a request with the National Weather Service to compile a weather synopsis of the weeks and months leading up to the event.

Back on Ghost Town’s property, geologists measured cracks in the ground, just yards away from children’s rides stopped in mid-air. Some of these cracks were so deep that geologists needed the aid of a meter-long hiking pole to discover where the crevice ended.

A major source of worry for Wooten and his team continues to be moving land near the slide that has been vertically displaced by almost four feet. At first, the drop had measured only three feet.

“That’s why this is an area of concern,” said Wooten.

Meanwhile, Shumpert hopped over the fence to take a closer look at the retaining wall. Since this was the first time Shumpert was getting a close look at the structure, he said he was not prepared to make any official statements.

Dozens of local businesses owed money by Ghost Town are mulling over ballots this week that will ultimately decide the amusement park’s fate.

Ghost Town, which landed in bankruptcy a year ago, owes a total of $13.5 million. It hopes to regain its footing and become profitable again, eventually paying off what it owes over the next seven years.

Ultimately, everyone owed money will get to vote on whether to accept the reorganization plan or force Ghost Town into a liquidation — namely selling off the mountaintop property to the highest bidder and using the proceeds to pay off the debt.

Some 200 businesses, many of them local contractors and small businesses in the region, are collectively owed more than $2.4 million by Ghost Town. They are at the bottom of the list to be repaid.

Wallace Messer of Dickson Auto Parts in Waynesville is skeptical he will ever see the $11,000 he is owed for parts and supplies.

“I just don’t see them turning a profit enough to pay off what they owe,” Messer said. “If you want my honest opinion, they will never pay off what they owe. They can’t come out from under it.”

Messer said he will vote for a liquidation and hope that a sale of the property brings enough to pay everyone back.

Mike Plemmons, the owner of Plemmons Plumbing and Heating, wants to give Ghost Town a chance to stay open and try to turn a profit, however. There is $11 million in debt owed ahead of small businesses like Plemmons, and if the property is sold off, it might not fetch enough to pay off those at the bottom of the list, he said. He thinks Ghost Town staying open is the best chance he has to get paid back.

“I’d rather go down fighting and have some chance as have no chance at all. Slim is better than none,” said Plemmons.

Plemmons is owed $8,000 for supplies, which he ordered especially for Ghost Town from distributors then had to cover out of his own pocket when Ghost Town didn’t pay.

Bruce Johnson, the owner of Champion Supply, doesn’t hold out much hope Ghost Town will ever pay off its $16,000 bill for cleaning and janitorial supplies under either scenario.

“I don’t think we are going to get money either way,” Johnson said.

So he is going to mark his ballot based on what he thinks is in the community’s best interest.

“I think it is better for the economy if they keep operating,” Johnson said. “The people they pull in help everyone.”

Johnson said he should have put a hold on Ghost Town’s supply account sooner than he did.

“They kept saying they would get us a check,” Johnson said. “We took our eye off the ball.”

Johnson did finally put Ghost Town on a cash account, and it has continued buying supplies from him over the past year, this time, paying up front.

Messer said he regularly sold parts to the previous Ghost Town owners. When new owners bought the park in 2007, they continued making purchases under same account, which had a good track record.

“I should have started a new account,” Messer said.

Plemmons said local businesses operate on good faith and is disappointed someone violated that trust.

“All your family businesses are run by people getting up every morning trying to make an honest living,” Plemmons said.

But in Ghost Town’s case, they kept promising to pay. Plemmons thought they were just being slow and allowed them to keep ordering more supplies. Eventually they quit calling him back and he was in the dark until the bankruptcy papers came through.

Those owed money have to mail their ballots by next week. The plan must be approved by the majority of creditors, and by those holding two-thirds of the total debt.

The rules prevent one big lender like BB&T, which is owed $9.5 million by Ghost Town, from swaying the vote. It also prevents dozens of smaller companies from tipping the scale by virtue of their numbers, even though the amounts they are owed is much smaller.

As for the 215 companies collectively owed $2.4 million, Ghost Town’s reorganization plan pledges to pay them back over seven years out of profits. The plan calls for dedicating 6 percent of net revenue received each year to pay back the small business owners.

However, the park hasn’t turned a profit in two years. Ghost Town CEO Steve Shiver blames the recession for lackluster ticket sales the past two years. The 1960s-era amusement park also had far more issues lurking beneath the surface than its new owners realized when buying the park in 2007, requiring costly repairs and upgrades that weren’t in the original business plan. The recession made it impossible to secure financing, but Shiver says he has now found a lender that will help put them back on stable footing.

Shiver said the park was planning to open for the season in late May, then the landslide happened.

“We are extremely concerned that we can’t open this season — for all of us and the Maggie Valley tourist industry,” Shiver said. “To be fully prepared and geared to open and then have this happen ... but the owners are committed to seeing this through.”

The reorganization plan initially called for paying back only 25 percent of what the businesses are owed over a seven-year period using a portion of net profits, but was amended to call for 100 percent payoff.

While buckling and cracks were readily visible in old retaining walls built out of railroad ties at Ghost Town in the Sky amusement park owners failed to officially notify anyone with Haywood County of the town of Maggie Valley.

Mountainside construction regulations passed by Haywood County in 2007 likely could have stopped the massive landslide in Maggie Valley from happening, if the right people had known about the potentially unstable slope being held back by a series of terraced retaining walls.

But the county planning and engineering department did not know, and even if it had, it would have lacked jurisdiction.

Ghost Town, where the slide originated, is in the town limits of Maggie Valley and the county’s slope laws don’t apply there.

The town could “opt-in” to the county’s slope ordinance, but hasn’t done so. Maggie could choose to adopt its own slope ordinance, but it hasn’t done that, either. Town Manager Tim Barth said the town board has never discussed whether the town should adopt the county’s slope ordinance or one like it.

Had the county slope ordinance applied, and had County Engineer Mark Shumpert been alerted to possible instability, he could have stepped in.

“I didn’t know there were any problems up there. That is news to me,” Shumpert said.

The county slope ordinance is usually triggered when an earth-moving project exceeds a certain threshold — depending on the height and pitch of the excavated slope. It typically does not apply to slope work prior to 2007 when the ordinance was passed.

But there is an exception. The county engineer has the authority to declare any slope that poses an imminent danger a “critical slope,” and force a property owner to make repairs regardless of whether the work pre-dated the passage of the ordinance.

“If it is a critical slope that looks like there is a potential for failure, we could require something to be done,” Shumpert said. “I didn’t know there was a wall up there in imminent danger of failing.”

Repairs to the giant system of terraced retaining walls were made in 2007. If that work had fallen under county’s slope ordinance, Shumpert would have inspected the site and likely realized that problems were still lurking, he said.

While many people in Maggie Valley knew — from Ghost Town employees to residents living below it — no one informed the county. Neither Shumpert, nor County Planner Kris Boyd, nor Erosion Control Officer Marc Pruett were alerted to the problem.

Barth said he was not aware of anyone with Ghost Town reporting the potential of an unstable slope to the town.

Shumpert is usually called in after a slope has already failed. There were roughly half a dozen small slope failures in the county last year, more than in the previous years due to higher rainfall in 2009. He also got a few pre-emptive calls for the first time from people concerned about the potential of a slope failure. None rose to the level of being designated a critical slope, however, he said.

“For the most part, we are getting calls after the fact. The stuff we are getting preemptively, we have been able to help them get a contractor involved before it gets worse,” Shumpert said.

Last winter, there were two landslides in Maggie. In one, a home was reduced to matchsticks with a family inside, but they miraculously escaped alive. In another, a slope below a house slumped away but stopped just sort of taking out the foundation.

In both, the county forced the property owners where the slide originated to make repairs.

One of the homeowners ultimately filed for bankruptcy. The home was foreclosed on and the county is now putting the bank on the hooks for repairs, Shumpert said.

Five years ago, a woman in Maggie Valley was killed when a landslide crushed her home.

Shumpert said the rash of landslides in Haywood County have all been a result of earth-moving. None occurred naturally on an untampered site, but all originated from a spot where excavation or construction had occurred.

On a positive note, no slope failures have occurred at sites subject to the county’s ordinance since its passage in 2007 — suggesting the ordinance works when followed.

The problems instead have all occurred on sites that were exempt from the slope ordinance — either because they predated the regulations or, in the case of the recent slide, fell outside the county’s jurisdiction.

 

One legislator’s fight for safety

A bill percolating in the state legislature would force the myriad mountain counties and towns that still lack slope ordinances to adopt them. The bill spells out the bare minimum for such an ordinance — modeled almost identically to Haywood County’s — but allows counties to go tougher if they want to.

It has been stalled for four years, stuck in various committees unable to garner widespread support it needs to pass, however.

“I am a bit frustrated,” said Rep. Ray Rapp, D-Mars Hill, who has championed the bill. “We are dealing with a situation where human life is at stake.”

Rapp said the bill doesn’t aim to stop mountainside construction, but does insist it is done safely.

“They are going to have to build to exacting standards so we don’t put people’s lives at risk,” Rapp said. “This is unacceptable, what is going on now.”

Rapp said he plans to keep introducing the bill until he can get it passed.

“What we are getting is a slow erosion of opposition. I just hope we don’t have to lose lives in the process,” Rapp said. “I think this would be a wake-up to county commissioners in counties without any slope ordinances as well as a wake-up call for the North Carolina legislature.”

Betty Miner was standing in her kitchen getting ready to fix supper last Friday when the pictures on her walls fell to the ground.

“I heard a sound and ran to where I heard it and that’s when the mud came up and splattered the window,” said Miner. “I thought an airplane had crashed right next to us or on top of the house.”

A 30-foot-high wave of mud and rock screamed by at 30 miles per hour, picking up any debris that lay in its half-mile path down the mountainside. While only four homes were damaged and no one was injured, Miner and her neighbors in Maggie Valley’s Rich Cove area were forced to evacuate after dark.

Teenager Shane Bryan was in his house watching TV when the slide hit.

“We grabbed the first things we saw and then they came to get us in the four-wheelers,” Bryan said.

The slide occurred around 6:30 p.m. on Friday, Feb. 5. Emergency responders were on-hand in less than a half hour beginning the work of evacuating residents from the path of danger.

Tammy Jones was trapped on the second story of her house after her ground floor was buried by debris.

“I heard it coming and knew what it was, but I didn’t have time to do anything but stand still,” Jones said.

Jones and her four dogs were eventually freed by rescue workers who dug their way in to a door on the ground floor to get her out and take her and the dogs down the mountain.

Cam Sutton said the slide sounded like “thunder coming down the mountain” and Tammy Rich described walking through mud up to her waist to check on her family members.

It was a night that none of them will ever forget.

 

Lingering threat

In the hours after the slide, the Haywood County office of the American Red Cross set up an emergency shelter at the Maggie Valley Methodist Church where eight residents from the landslide area slept Friday night. Others stayed with family or at hotels.

Ultimately, the area endangered by the slide included 13 homes lived in year-round, and another 24 that are second-homes and were unoccupied.

According to residents, on Saturday emergency management staff and staff from the North Carolina Geological Survey told them a retaining wall at Ghost Town gave way higher up the mountain and was likely the cause, but that they would continue to flesh out the details.

Church volunteers and area businesses helped sustain the displaced residents by furnishing meals. By Sunday, the shelter had closed and everyone had found housing elsewhere, but emergency management officials informed residents that anyone past the 600 block of Rich Cove Road should not return to their houses because the land above them was still unstable, posing the risk of a second, possibly even larger slide yet to come.

Betty Miner explained what she felt after the event.

“I’m just shocked that this could have happened,” Miner said. “Last night I finally slept. It’s a shock to the system and kind of a feeling of loss.”

Residents were briefed again Sunday night by emergency management personnel who had conducted a fly-over of the area accompanied by Rick Wooten, geologist from the North Carolina Geological Survey.

After reviewing the site from the area, Wooten estimated that 12,000 to 16,000 tons of material was still unstable at the top of the slide. With the weather report predicting four inches of snow on Wednesday this week, the area still presented a threat.

Some residents below the 600 block of Rich Cove Rd. chose not to leave their homes. Tammy Rich, who lives at the Sutton family home, wanted to stay on the mountain.

Rich said she and her relatives were aware of the danger the slide presented because they’ve lived with it for years.

“They told us stuff we already knew,” said Rich. “We knew there were problems with the retaining walls, because it’s happened three times before.”

 

The Cause?

On Monday, officials gathered the residents one more time at the Methodist Church to brief them on the situation. The shock and relief they had felt in the days following the event had begun to give way to a pressing need for clarity.

“The information stream has really slowed down,” Jones said. “We don’t know any more now than we did on Saturday.”

Cam Sutton, whose house was cut off by the slide had a simple question for Wooten.

“The cause?” Sutton said. “Do we know the cause?”

Wooten said determining the exact cause of the slide would take time. There were many factors, he said. Missing from his presentation this time around was any direct reference to Ghost Town’s retaining wall, however.

“This is an area that’s failed before. Twice at least and probably more than that,” Wooten told the crowd.

Using contour maps of the area showing the path of the slide, he explained the risks presented by the material still hanging from the top of the mountain.

But the residents gathered wanted concrete answers to practical questions. When will we know for sure what happened? When can we go home?

For Tammy Jones and Kurt Biedler, there is no going home. The foundation of their house was breached and their water system went down the mountain.

“I have no patience left,” Biedler said. “We’re 72 hours into an emergency situation and our house is not livable. The lack of information is unacceptable.”

Jones and others wondered why the owner of Ghost Town in Sky Amusement Park hadn’t shared any information with residents about what had happened.

“If it was my retaining wall and it fell on my neighbor, my insurance adjuster would be down there immediately interviewing the neighbors,” Jones said.

Jones and Biedler bought their house in May after moving from Savannah.

Jones said she has given up on returning to her house in the near future.

“I’m not interested in living below that,” Jones said. “It’s like a ticking time bomb.”

Cam Sutton, a lifelong resident who had to walk through the woods carrying his children during the Friday evacuation, was furious that Ghost Town’s owners have not met with residents yet.

“Ghost Town hasn’t been to one meeting. The community helped each other and stuck together, but the cause of this hasn’t shown up yet,” Sutton said.

Ghost Town’s CEO and a hired engineer have been involved in meetings with the county and state geologists.

“First and foremost we are very thankful and grateful no one was hurt,” Ghost Town CEO Steve Shiver said in a phone interview.

Sutton said he wants Ghost Town to make right the situation he believes it has caused.

“I would expect them to clean up the whole mess,” Sutton said.

Kim Czaja, executive director of the Haywood County Red Cross, told residents gathered at the church her staff would begin case management with people displaced by the slide on Tuesday morning.

“This is a long-term effort but right now our priority is your immediate concerns,” Czaja.

Czaja said she her staff would focus on assessing what displaced residents need and then would work to identify what resources may be available to them.

Tammy Rich spoke for the rest of the Suttons on Rich Cove Road.

“We’re just gonna ride out the storm,” said Rich. “What can you do?”

It could take months or even years for lawsuits over a massive landslide in Maggie Valley to be resolved, leaving affected property owners in limbo over who is financially responsible for the damage to their homes.

The landslide originated from Ghost Town in the Sky, a mountain top amusement park, where a giant system of terraced retaining walls gave way. N.C. Geologist Rick Wooten does not believe the slide was solely due to natural causes, but could not be more specific.

“We are not ready to make any kind of statement on that or jump to any conclusion on that yet,” Wooten said.

The retaining walls have been a source of consternation for Ghost Town over the years, according to those familiar with the amusement park’s history. When the park was built in the 1960s, the top of the mountain was leveled off and dirt pushed over the side. The terraced system attempts to hold that dirt in place.

It has occasionally slumped in places but a major section gave away in 2007. Ghost Town hired an engineer and contractor to make repairs to portions of the terraced slopes.

But some of the old walls — constructed out of railroad ties — were left in place.

Last Friday night, heavy rain exacerbated by melting snow triggered a landslide that started at the retaining wall. The question is whether the old portion of the railroad tie walls or the new walls constructed in 2007 were at fault. The slide took out some of both.

“Obviously there is a responsible party, but I am going to let the engineers and attorneys figure that out,” Ghost Town CEO Steve Shiver said. “We are not going to make any comment about liability.”

Pat Burgin, a local engineer hired by Ghost Town, said the work performed in 2007 was not properly engineered nor constructed by Caroline-A-Contracting of Maggie Valley. The company disputes that, however.

“It is the contractor’s position that there is nothing that they did which resulted in this slide,” said Rusty McLean, a Waynesville attorney providing legal counsel for Caroline-A-Contracting. “They repaired the portion they were hired to repair.”

Ghost Town chose to leave some of the old railroad tie sections in place, “against the recommendation of the company,” McLean said.

Verlin Edwards of Maggie Valley was the engineer for the 2007 work and his son, Colin Edwards, an excavator, performed the work. However, in fall of 2008 they sued Ghost Town for failing to pay the full bill. The suit claimed they were still owed $28,866.

Ghost Town filed for Chapter 11 bankruptcy a few months later, however, and the suit is on hold pending the result of bankruptcy proceedings.

Meanwhile, Ghost Town filed a counter claim arguing the wall was “not property constructed, designed and compacted,” and, therefore, the company shouldn’t have to pay.

One of the old walls built from railroad ties sat at the top of the mountain. If it failed first, it would naturally take out the newer section below it. But if the newer section failed first, it could have yanked the support out from under the older walls above and caused them to collapse. Photographs of the slide clearly show it started at the retaining wall.

Lawsuits are imminent, ones that will likely pit the insurance companies of Ghost Town, the contractor and the homeowners against each other.

Which section of wall failed first — the old portion or new portion — ultimately might not matter in court, however.

“By general statute, the property owner is ultimately responsible,” said Haywood County Planner Kris Boyd.

A third option is that the landslide will be deemed a natural disaster, known in legal terms as an “act of God,” meaning no one is at fault. It also means that damage to homes in the slide’s path won’t be covered, as homeowner’s insurance doesn’t cover natural landslides. No insurance companies offer separate slide policies, either.

“It’s a horrendous problem,” said N.C. Rep. Ray Rapp, D-Mars Hill. Rapp points to an arrangement between the state and insurance companies to provide hurricane coverage for coastal homeowners as a solution for landslides.

“I think if we could do that for property owners on the coast, we should be able to work out a similar package to induce insurers to provide coverage for land movement in the mountains,” Rapp said.

Ghost Town has not made a profit in two years. It hopes to pull through bankruptcy, but has been forced to operate on a lean budget. It has more than $12 million in debt.

“Financially, their hands are tied. It costs a lot of money to move dirt,” said Burgin.

Even after repairing large sections of the retaining wall in 2007, Ghost Town brought in another contractor in 2008 to make more repairs.

“They have been very proactive in trying to deal with it,” Burgin said. “Ghost Town is between a rock and a hard place.”

State codes require a building permit for retaining walls more than four feet high. But it does not appear Ghost Town got a permit when the new portions of wall were built in 2007.

“We could not find any permits directly related to the retaining wall,” said Town Manager Tim Barth, who looked back at building permits from the time period.

Ghost Town CEO Steve Shiver could not say whether they ever got one from the town.

“That would be the responsibility of the contractor,” Shiver said.

However, the state code actually places the onus on property owners to secure necessary permits. Even if Ghost Town had gotten a building permit for the retaining walls in 2007, the permit merely requires the work to be conducted per an engineer’s plan, which was done anyway.

More to come?

The majority of the retaining wall system is still in place.

But the slide undermined the integrity of the remaining sections, making it all vulnerable to another slide, Wooten said.

“There is a lot of unstable material at the top,” Wooten said. “If it should fail in a catastrophic way — which we don’t expect but we have to prepare for it as a contingency — where would it go? For the most part we hope it would follow the path that is there now.”

Meanwhile, residents in the area are advised not to return to their homes. Wooten said it is fortunate there weren’t more homes in the direct path of the slide or the situation could have been far more catastrophic.

Everyone who’s seen the slide — emergency responders, geologists, evacuated residents and even casual observers looking up at the dark swath on the mountain from the valley below — share disbelief that people weren’t killed or injured by the massive wall of fast-moving dirt.

“It is a thousand wonders,” said Marc Pruett, Haywood County Erosion Officer.

Following a major landslide in Macon County in 2004 that killed five people, the state embarked on a major project to map areas vulnerable to landslides. Known as landslide hazard mapping, the state is funding the effort at the pace of two counties per year. If funding remains steady at past levels, Haywood is in the queue for mapping in 2011 or 2012.

It is unclear how helpful the mapping could be to residents in landslide prone areas, however. Wooten, the state geologist, said the mapping is designed to pinpoint areas where the naturally occurring slopes and soil types are landslide prone. But it would not account for sites where excavation and earth-moving have created an artificial risk, Wooten said.

Nonetheless, those who know they live in a vulnerable area could chose to spend the night elsewhere when major rains are forecast.

Chris Carver found himself in the unusual position of being both rescuer and evacuee when a massive mudslide struck Rich Cove Road in Maggie Valley on Friday night.

“I live there, right where it stopped,” said Carver, assistant chief of the Maggie Valley Fire Department and one of the first responders on the scene.

Carver was headed to the shower when he heard his pager go off, notifying him of the emergency.

At that point, Carver and his family were unaware that a slide 3,000 feet long and up to 175 feet wide had just sped 30 miles per hour down the mountainside, seriously damaging four houses in its path, and stopping just short of his own. The mountain of mud that slammed the slope at times measured as high as 30 feet.

Carver immediately headed out into the foggy night to make his way up to the slope to begin evacuating his neighbors. Crews from the Maggie Valley police and fire departments joined Carver in the rescue effort just five minutes after a call went out for help at 6:33 p.m.

Rescue workers went door to door, trying to find residents and evacuate them, while police officers secured the roads and set up a blockade. Limited visibility plagued the rescue effort.

“You couldn’t see five inches in front of your face,” said Scott Sutton, chief of Maggie Valley police.

Most residents were unaware of the immense scale of the mudslide at that point, but rescue workers understood that the slide was still potentially active. The threat of a second landslide wave loomed.

“Everybody was uneasy about it,” said Sutton. “You didn’t know what it was, you didn’t know its origin, you didn’t know how far it was.”

But the 50 or so responders from all over Haywood County who worked Friday night were able to maintain their cool during the emergency.

“Everybody stayed calm,” said Carver. “You have to, you got a job to do.”

Some residents walked quite a distance down the hill, abandoning their houses upslope to escape the slide.

“They were shook up a little bit,” said Carver. “Who wouldn’t be?”

A few were able to drive away in their cars, but debris from the mudslide blocked off many other driveways.

Firefighters had to dig mud out to evacuate one woman who was stuck inside her house after the landslide tore off her deck. They were able to rescue her after sending a ladder up to her front door.

Carver said no one appeared to have any major injuries from the slide.

Emergency crews transported residents to a command center at town hall. They were later transferred to a shelter set up by the Red Cross at Maggie Valley United Methodist Church. Some opted to stay with relatives, friends or at a motel instead.

In the next few days, crews gave some residents a lift in all-terrain vehicles back to their homes to help them recover their vehicles and belongings. It was impossible to clear driveways in a few cases.

Most on site now must either walk or utilize ATVs, according to Carver.

“It’s the only way you can maneuver up there,” Carver said.

Kim Czaja, executive director of the Haywood chapter of the Red Cross, commended rescue workers for arriving on scene so quickly.

“I’m quite amazed that no one got hurt,” said Czaja, who still had mud on her shoes Monday after visiting the mudslide zone and assessing damage to individual homes the day before.

“I don’t think there are words to describe the amount of debris,” said Czaja. “It blew me away.”

Assessing the damage

While rescue workers focused on evacuating residents, Greg Shuping, director of Emergency Management for Haywood, was busy preparing for the days ahead.

He called in representation from state emergency management division, the North Carolina Geological Survey and the North Carolina Department of Transportation immediately after the mudslide struck on Friday.

Despite snowfall, Shuping and his crew worked all day Saturday to transport engineers and geologists up the mountain to assess the mudslide and take pictures.

Shuping also coordinated a helicopter ride for town and county officials.

“The value of being able to look down at the entire site and see that footprint...I believe, was very important,” said Shuping.

Maggie Valley Mayor Roger McElroy and Alderman Scott Pauley were two officials who got a bird’s eye view of the mudslide during a helicopter ride.

“It’s a mess,” said Pauley.

McElroy was shocked at how far down the mountain the slide traveled, but said the impressive trajectory was likely due to the sheer drop of the slope.

In McElroy’s view, even the best engineering and technology may not be enough to save houses on such steep slopes in emergencies.

“Under certain circumstances, they just won’t stand up,” said McElroy.

“Bad coincidence”

Haywood County and the Town of Maggie Valley quickly signed off on a disaster declaration over the weekend, making them eligible for state and federal aid.

Local officials have stated representatives from both the North Carolina Division of Emergency Management and the Federal Emergency Management Agency will visit the mudslide site this week.

Officials were already slated to visit the region for another reason, according to Julia Jarema, spokeswoman for N.C. Division of Emergency Management.

They are visiting counties in Western North Carolina to assess damage from December snowstorms to possibly provide funds to local governments to help recoup the cost of removing debris or getting power back up.

That’s not to say the officials can’t have a look at the latest mudslide while they’re here, but Jarema said local governments would have to send in yet another application to request assistance for this slide.

“It’s a different disaster,” said Jarema. “The fact that it’s occurring around the same location is really just bad coincidence.”

Regardless, Shuping said his primary focus now is to coordinate with town, county and state officials, as well as Ghost Town, to bring a safe resolution to the mudslide as quickly as possible.

“We’re asking for any and all assistance on behalf of the town and county,” said Shuping.

Ghost Town in the Sky, an amusement park in Maggie Valley, failed to pay employees for their final two weeks of work before shutting down for the winter.

While most employees were told upfront that they might not be paid their full wages immediately and were given the choice to work or not, the company could still be in violation of state labor laws.

“The law says they must pay all accrued wages to employees on the regularly scheduled payday,” said Darrell Sanders, supervisor for Wage and Hour Bureau with the N.C. Department of Labor. “Even with the employees’ agreement, nobody can waive the law. As soon as midnight ticked by on payday, the company automatically went into violation of the law and will be until the employees are paid.”

CEO Steve Shiver said the company still plans to pay employees what they are owed.

“They will be paid as quickly as possible. I am doing everything I can every day to make sure that takes place,” said Shiver.

In the meantime, there may be little the employees can do about it other than wait. Ghost Town is operating under Chapter 11 bankruptcy with hopes of reorganizing and regaining its footing. Workers who are not paid by an employer usually take their complaints to the labor department, but the department has no jurisdiction when bankruptcy proceedings are in play.

“It is a large wrench to throw in the machinery,” Sanders said.

Ghost Town filed for bankruptcy early this year. In addition to a $9.5 million mortgage, the park has a trail of unpaid bills with more than 215 companies totaling $2.5 million, including local contractors, electricians, media outlets and equipment rental companies.

Shiver held a meeting with employees going into the final few weeks of the season in October to fill them in on the financial status of the amusement park.

When Shiver leveled with workers and told them cash flow was tight, it came as no surprise. A few times during the year, the park couldn’t make payroll on Friday and instead relied on revenue from weekend ticket sales to pay employees the following Monday. The park eventually moved payday from Friday to Monday on a permanent basis, according to employees. Even then, the park didn’t always make full payroll, and would only give employees a partial paycheck and make up the difference the following Monday after another weekend of revenue came in.

At the meeting, Shiver gave employees two choices: shut the park down early or remain open the rest of the October. If they stayed open, however, there was a chance they wouldn’t bring in enough revenue to pay everyone on time.

Shiver then left the room while employees voted with a show of hands whether to keep working. The vote was unanimous.

“We all knew there was a possibility we may not get paid,” said David Aldridge, a Maggie resident who worked at Ghost Town. “We were willing to risk it.”

Shiver said the dedication of employees is remarkable.

“I have such great employees,” Shiver said. “It shows the dedication of all of us, including myself, to make sure Maggie Valley and Ghost Town in the Sky and all that goes with it survives. I am very humbled by their support and continued efforts.”

While Shiver never suggested employees would be volunteering their time in exchange for no pay, that was certainly in the back of their minds, Aldridge said.

“We were asked if we were willing to take half our paychecks now and half later,” Aldridge said. “Nobody ever agreed to not get paid. Everybody expected to get their last paycheck.”

The paychecks haven’t been forthcoming yet, but Aldridge said he isn’t mad. He said most employees understand and care deeply about the park and want to help it succeed. Aldridge said Shiver was a good leader and an inspiration for employees.

“He was out there working every day as hard as everybody else. He was trying to do all he could to keep Ghost Town going,” Aldridge said.

Shiver has exemplified the all-hands-on-deck attitude that allowed Ghost Town to make it through the year.

“I bussed tables, I swept floors, I blew leaves off the streets to make sure our guests could enjoy themselves,” Shiver said.

Not all employees were at the meeting when Shiver leveled with the state and the informal vote was held, however. The meeting was billed as a non-mandatory staff meeting and the topic wasn’t shared in advance, so Ron Coates, a worker who lives in Hot Springs, opted not to make the hour-long drive on his day off to attend.

No one in management ever told him what had transpired or warned him that he may not be paid if he kept working.

“Nobody ever said we might not get paid,” Coates said.

Coates has filed a claim with the bankruptcy court for $386 after being told by the state Labor Department that was his only recourse.

Meanwhile, water to the amusement park has been shut off due to failure to pay bills, according to the Maggie Valley Sanitary District.

As Ghost Town heads toward its first big showdown in bankruptcy court next week, objections from those owed money are beginning to pile up.

Ghost Town, an Old West amusement park in Maggie Valley, recently filed a disclosure statement and reorganization plan, which are supposed to outline how it intends to pull out of bankruptcy — presumably making enough profit to repay its debts.

However, Ghost Town failed to include profit and loss statements, back tax filings or basic financial projections as part of its disclosure statement. Objections over the spotty disclosure statement were filed by several parties owed money, including the Haywood County Tax Collector, Mountain Energy and BB&T, the mortgage holder on the property.

Some 200 businesses, many of them local contractors and small businesses in the region, are collectively owed more than $2.4 million. They are at the bottom of the list to be repaid. The reorganization plan calls for paying back only 25 percent of what the businesses are owed over a seven year period using a portion of net profits.

In an objection, BB&T said such a claim was disingenuous. Since Ghost Town’s current owners have never turned a profit, it is possible the businesses owed money would never get a dime, BB&T wrote in its objection.

Ultimately, everyone owed money will get to vote on whether to accept the reorganization plan or force Ghost Town into a liquidation — namely selling off the mountaintop property to the highest bidder and using the proceeds to pay off the debt.

In the disclosure statement, CEO Steve Shiver encouraged everyone owed money to vote yes, claiming they likely won’t see a dime if the park is liquidated, since it won’t fetch enough to pay off all the debt.

Ghost Town in the Sky did not bring in enough revenue from its amusement park operations during the months of May, June and July to cover its overhead and operating expenses.

Ghost Town recently filed financial statements with the U.S. Bankruptcy Court for May, June and July that show how much it made off ticket sales, concessions and souvenirs. For the three-month period, Ghost Town made $1.531 million in revenue off the park.

Meanwhile, the Maggie Valley amusement park paid out $1.845 million in operating costs, including salaries, utilities, insurance, taxes, advertising and equipment.

The operating loss was offset thanks to contributions from investors to the tune of $322,000. The financial statements do not say where or who the cash infusion came from. The cash infusion mostly came in May, when the park bore significant expenses to get the doors open for the season. Once open, the park began to break even and during the month of July, the park even made money.

Ghost Town CEO Steve Shiver made a modest salary of $5,426 over the three-month period. However, a company Shiver is president of, Global Management Services, was paid $27,000 by Ghost Town for the period. Shiver’s company is billed as a professional services company and dates to Shiver’s former life in the Miami area. The services Shiver’s company provided were not spelled out in the financial filings, but the fee was listed under a section for payments to insiders.

The theme park has suffered a setback this summer by failing to get the Cliffhanger Roller Coaster open.

The Maggie Valley theme park filed for Chapter 11 bankruptcy in March in hopes of holding off bill collectors long enough to get back on its feet. In addition to a $9.5 million mortgage, the park has a trail of unpaid bills with more than 215 companies totaling $2.5 million.

Ghost Town has been granted an extension to file its reorganization plan under bankruptcy protection. In early July, days before the plan was due, Ghost Town asked the court for an extension. The bankruptcy court granted a three-month extension, making the plan now due in early October. The plan is supposed to spell out how the company plans to make money to pay back its myriad creditors.

Those owed money get to vote on whether to accept Ghost Town’s reorganization plan. The plan is supposed to be voted on by creditors within two months of being filed.

The bankruptcy court turned down a request by Ghost Town that would have paved the way for another $250,000 loan from a private investor, Alaska Pressley. The loan would have been used to help get the incline railway working. Ghost Town wanted to pay back the loan by dipping into proceeds from ticket sales, but the bankruptcy court ruled that this in effect would allow Pressley to jump in line ahead of others already owed money by Ghost Town.

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