An Horry County judge has granted one of Freestyle Music Park's creditors the right to reclaim property that sits inside the shuttered park, according to court documents.
VenCore Solutions requested an order to take immediate possession of the property, stating that the property was in immediate danger of destruction. The Oregon-based company had leased a wide variety of property, including shelving units and radios, to Freestyle.
The lawyer for FPI MB, Freestyle's owner, wrote a letter to VenCore confirming that the the property "is currently uninsured and not subject to a hurricane contingency plan," according to an affidavit from James Paul Johnson, VenCore's Chief Operating Officer. The judge granted the order on Sept. 8, stating that it appeared the property was in immediate danger.
B. Keith Poston, VenCore's attorney, said the company instructed him not to comment on the case. Nate Fata, FPI MB's attorney, could not be reached immediately for comment.
It is unclear how VenCore will go about repossessing the property.
VenCore initially leased the property to Hard Rock Park in an agreement that was passed on to Freestyle when it bought the park out of bankruptcy in 2009.
VenCore additionally claims Freestyle owes $1,074,738 for failing to comply with the terms of the leasing agreements.
Freestyle closed after a disappointing first season and did not reopen in 2010.
The park failed twice in two years after lackluster seasons: first as Hard Rock Park in 2008, then as Freestyle. The park did not reopen for a 2010 season as the owners searched for new investors.
Freestyle additionally faces a foreclosure suit that claims the park owes more than $25 million on its mortgage. The park aims to find some resolution - possibly bringing on new investors or selling the park - to reopen the park, Fata said in August.
Creditors accuse SC amusement park owners of fraud
The Associated Press MYRTLE BEACH, S.C. --
Businesses owed money by the owners of a failed Myrtle Beach amusement park have accused a mortgage holder of fraud in court filings.
The Sun News of Myrtle Beach reported Saturday that four companies challenging a foreclosure lawsuit filed responses in court saying the mortgage holder and the owner of Freestyle Music Park are actually the same entity.
"We think that there was an element of fraud involved in establishing the mortgage in the first place," said Audra Byrd, an attorney representing Brandon Advertising Inc. in Myrtle Beach. "We think it was created to shield the company from having to pay its creditors."
Mortgage holder FPI US has sued FPI MB Entertainment to foreclose on the property. If successful, the mortgage company would move to the front of the creditor line and get paid first if the park is liquidated or sold.
"The answer is obviously no ... they're not the same entity," said attorney Nate Fata, who is representing the park owners in the current case, but who has represented FPI US in the past.
The $400 million park opened in 2008 as a Hard Rock Park. After a poor opening season, the park went into bankruptcy and was sold to FPI MB Entertainment for $25 million. Freestyle Music Park was open just one summer and it too had financial problems especially with one debt it inherited from the bankruptcy purchase. The park did not open this summer.
Last month, a former president of the park said every board member except one had resigned after the mortgage holder filed the foreclosure suit.
Byrd said the move to foreclose on the property is to eliminate the outstanding debt without paying anything for it.
"The mortgage and notes were created for the purpose of doing what they are trying to do: to foreclose on the property and walk away with that asset - the property - lien free," she said.
Fata would not discuss details of the case and said his client would respond to the allegations in court if they responded at all.
Lawsuits against Freestyle Music Park continue to grind their way through court, but regardless of their outcome, there is little chance the park will ever open again, according to a theme park consultant and area businesses.
The park opened as Hard Rock Park in 2009, but filed for bankruptcy protection after a slow first season. A group of investors bought it out of bankruptcy and reopened it as Freestyle Music Park in 2009. Although park representatives initially said the park would open in 2010, they failed to find new investors and it remained shut for the season.
About 12 lawsuits against Freestyle are pending in Horry County courts, most brought by vendors who provided goods and services to the park but were never paid.
"I wouldn't say that it could never open again, but it's very rare," said Michael Jenkins, a theme park consultant with Texas-based Leisure & Recreation Concepts Inc.
Legal proceedings
The court cases include a foreclosure suit brought by mortgage holder FPI US LLC against park operators FPI MB LLC in August. FPI US claims that more than $25 million is owed on the mortgage, according to court documents.
Lawyers for FPI US and FPI MB could not be reached for comment.
The case will have its first day in court on Jan. 12 when a judge will decide whether to appoint a receiver to take possession of the park's property, according to court documents.
"If the receivership motion was granted, it would be hard to imagine how the place would open up again while the foreclosure is going on," said Allen Jeffcoat, a bankruptcy lawyer not affiliated with the case.
FPI US requests that Gregory Maloney of Jones, Lang LaSalle Americas, Inc. be appointed as receiver, according to court documents. Maloney could not be reached for comment.
A judge will also rule that day on a request from FPI MB that the case be dismissed.
Other roadblocks remain before the court can rule on the foreclosure itself.
The suit names 25 of Freestyle's other creditors as codefendants, all of whom must be notified and given 30 days to respond. Only 15 have been notified so far, according to court documents.
Four of the codefendants - M.B. Kahn Construction Co. of Columbia, Data Sales Co., Inc. of Minnesota, Vencore Capital of Oregon and Brandon Advertising of Myrtle Beach - responded to the foreclosure suit by claiming that FPI US and FPI MB acted in unison to defraud other creditors of money they are owed. Their response says FPI US and FPI MB are really the same company and structured the mortgage to prevent creditors from being paid.
FPI US has denied those claims, according to court documents, although it has not responded to Vencore. FPI MB denied Data Sales Co.'s claims but has not responded to the rest.
It is not clear who is behind FPI US and FPI MB or how the companies are able to pay their legal fees. All but one member of park operator FPI MB's board of directors resigned following the foreclosure suit in August, former Freestyle President Steven Baker said at the time. Baker said he could not identify the remaining board member, but said he or she represented the interests of Russian investors in the park.
FPI US is the U.S. arm of Russian company MT Development.
The possibility of opening
It is still possible that FPI MB could reopen the park if a receiver does not take possession of the property, Jeffcoat said.
"In the abstract, the owner could go in there and open up tomorrow, but the question is, where would they get the money to operate," he said.
With so many lawsuits and the pending foreclosure suit, banks would not lend to FPI MB or any other company that takes over the park, Jeffcoat said.
All parties would have to work out an agreement for the park to be able to open and it is unlikely that could happen in time for the 2011 season, he said.
Jenkins similarly said that its improbable but not impossible the park could reopen. Using the same theme and concept would be difficult, he said.
"Once you lose the momentum in your marketing, to rebuild the marketing strength in the brand - especially after it has gone through some visible difficulty in the news - it's hard to recapture the essence of the brand," Jenkins said.
There are few parks that have successfully reopened after closing, he said. One example is Magic Springs in Arkansas, which closed and changed hands a few times before reopening years later, he said.
Nearby companies lose some business
Mike Sportelli opened Corner Cafe and Deli off Fantasy Harbour Boulevard near the park after Freestyle had closed for the 2009 season, he said. If the park reopened, the tourists it would attract would greatly help the restaurant, which is barely surviving, he said.
"I wasn't really counting on it, but I was still hoping," Sportelli said. "We're on the edge."
Locals who work or live nearby have kept the business going, Sportelli said.
Down the street, Big D's Bar-B-Que has always relied on locals and business is better than ever, owner Russell Davis said. The bridge connecting George Bishop Parkway to Fantasy Harbour Boulevard, which opened in 2009 to ease congestion, has brought more people through the area who stop to eat, he said. Freestyle brought in only a few extra customers when the park was open, he said.
Everything on the park's property should be sold off and it should be split into smaller parcels of land so small businesses can afford to move in, Davis said.
"There's people back here; they just need to get the right businesses back here," he said.
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this guy might be the worse troll ever