Falls Event Center Chapter 7 Liquidation Looms

Falls Event Center at Trolley Square in Utah | Hospitality Online

We now know that by February 22, 2019 The Evergreen Museum’s landlord, The Falls Event Center (TFEC), will make a decision to either shut down (Chapter 7) or attempt to reorganize the business (Chapter 11). Given that the Trolley Square location would have to pay full rent of over $30,000 a month minimum according to the agreement to continue long term in reorganization, it is very doubtful that TFEC at Trolley Square will survive (TFEC at Trolley Square cannot make a profit at that high rate according to earlier comments by Gil Miller, TFEC’s accountant in bankruptcy). Given these facts, it is likelier than not that TFEC will be forced to convert to a Chapter 7 liquidation on or before the February 22 date. This decision currently only applies to the leased Trolley Square site, however, Trolley Square also houses TFEC headquarters, and the situation is similar at the other centers, so it is logical that this decision will by extension apply to the entire company. As a result, the Claro Group, who were hired short term to make a go or no go decision, could logically issue a decision for all the event centers as a whole by February 22 as well.

Video with Hearing located here: https://www.facebook.com/permalink.php?story_fbid=1045275819007453&id=100005751336755&__tn__=K-R

In the recent hearing the parties also agreed on a process to refund deposits at Trolley Center with no assurances that event dates will be honored, owing to the looming probability of long-term closure. You can listen the details in the audio of this hearing in the video above.

All of these factors conspire to mean that it is likely TFEC at McMinnville, which includes the Wings and Waves Water Park, the lodge, and the Evergreen Museum aviation building will be caught up in the full Chapter 7 bankruptcy liquidation along with the other centers. However, and unlike Trolley Square, there is no agreement in place to ensure that either deposits or event dates will be honored at any of the other centers. It was clarified in the first bankruptcy hearings that the event deposits had been spent, had not been segregated as Steve Down claimed they were, and are actually assets of the creditors. Any event holders need to understand that deposit money and event dates are at significant risk of being totally lost without refund. At this time only a fool would pay a deposit or reserve a date at any of the Event Centers.

While TFEC will likely enter Chapter 7 (liquidation) by February 22, 2019, it is unfortunately not the end of the saga. TFEC is hemorrhaging over a million a month, fighting foreclosure at McMinnville, and a has suit brought against them by the Museum who is trying to get its hands on the Wings and Waves Water Park cash flow (which has now entered a period of negative cash flow). Just like Del Smith, Steve Down promised the Water Park revenue to more than one entity, but neither party is likely to get a dime before priority creditors given the almost $100 million loss at TFEC. The legal fights are getting more intense, confusing, complicated and costly. I have little doubt that additional legal suits will be filed, and these will take even more time to sort out. Every last dime of value remaining to TFEC will be spent by lawyers, trustees, advisors and the courts until it is all gone. By the time the dust settles, the investors, unsecured creditors, event holders, and the Museum will get nothing.

The motions filed at Trolley Square and McMinnville can be found here: https://drive.google.com/drive/folders/1g5uBDL7W6LmsmH7uaga0xdbmIdyqP-l6?usp=sharing