One of the primary owners of the bankrupt Ghost Town in the Sky theme park in Maggie Valley, North Carolina has launched a rescue bid for the park with a newly-formed company.
Al Harper is hoping that a bankruptcy court will approve the sale of the park to his American Heritage, LLC venture. The potential $7.5 million deal is a controversial one, as it would see the park walk away from nearly $5 million in debt - much of which is owed to local small businesses. A bankruptcy court hearing will consider the offer on Tuesday, May 4.
If the offer is unsuccessful, the park will face foreclosure proceedings that could see it auctioned off to the highest bidder as early as June. This could lead to the permanent closure of Ghost Town in the Sky, with assets being sold to help pay off the park's debts.
Ghost Town in the Sky plunged back into bankruptcy in November 2009, just two years after reopening following a previous bankruptcy. It suffered continuing losses, and failed to pay staff on time on several occasions during the 2009 season.
Harper was one of the three owners who bought the park in 2006, some 4 years after a previous bankruptcy forced its closure. Now, he is seeking to rescue the park for a second time with American Heritage, a company which was he formed just 2 weeks ago. The new organization's name is similar to Harper's other major tourism venture, American Heritage Railroad.
According to the Smoky Mountain News, Ghost Town in the Sky is some $13.5 million in debt. The lion's share is made up of a $10 million mortage held by Branch Banking & Trust, although the park also owes money to dozens of smaller businesses for services and goods received over the last few years.
Creditors have already voted to reject an reorganization plan from the park that would have seen debts repaid in full over a 7-to-10 year period (provided the park proved successful). The new offer would see them receive a lump-sum payment, which for many smaller creditors would be significantly less than the amount they are owed.
Even if the offer is successful, the chances of Ghost Town in the Sky opening for the 2010 season appear remote. A landslide earlier this year left parts of the park unsafe, with stabilization work not scheduled to complete in time for the start of the summer season.