Wild West World kept taking on investors
Wild West World kept taking on investors
Friends, including minister Terry Fox, say Thomas Etheredge told them that the park was a "good investment" -- even as he was borrowing to make payroll.
BY BILL WILSON - The Wichita Eagle - Aug 12, 2007
Thomas Etheredge borrowed $25,000 in February to meet his Wild West World payroll, a month after transferring the last of $410,000 to the park from its parent corporation, Restoration Farms.
At the same time, he was urging his friends at Summit Church to invest their money into the financially strapped amusement park, calling it a "good investment."
Why several Summit members -- including the church's pastor, Terry Fox -- decided to invest $50,000 to $300,000 last winter in the financially troubled park is one focus of an investigation launched July 11 by the Kansas Securities Commissioner's office.
It's also a question on the mind of at least one investor.
"I think that Thomas really took advantage of his friendships within our church," said Valley Center accountant Mike Porter, who gave Etheredge $100,000. "And he absolutely abused his friendship with Terry Fox."
Risk disclosure
Fox said he didn't know the park was having trouble meeting its payroll of about 30 people last winter when he gave Etheredge $50,000.
"I just knew it was struggling," Fox said. "Thomas said he needed money to keep going, to finish the park."
So Fox said he handed over $50,000 from his retirement fund sometime in the first half of January. He has no documentation of the transaction.
"He (Etheredge) said it was a good investment," Fox said. "He was never open to me about his personal business at that time, but that was OK. I didn't really want to be involved, anyway."
Investing wasn't a tough decision, Fox said. Etheredge was a friend and other Summit Church members were investing as well.
Porter agreed, saying the participation of several Wichita-area banks, Park City and the South Central Kansas Economic Development District influenced his decision to give Etheredge $100,000.
"I mean, you see those people investing and it gives you confidence," Fox said.
"We never met as a church or anything and discussed whether the park was a good investment. Maybe we should have."
The invest98nts came as Wild West World's parent company, Restoration Farms, was shoveling money into the park.
Almost $410,000 was paid from Restoration Farms to Wild West World from Dec. 19, 2006, through Jan. 10, 2007, according to court documents in the Restoration Farms bankruptcy filing.
Risk disclosure -- whether the park's investors were apprised of its financial condition before they invested -- is one issue before state securities investigators.
University of Kansas law professor Webb Hecker said investors like Fox and Porter will wield a lot of influence in whether the state takes action. Hecker said the state likely won't proceed if investors aren't upset about the loss of their money.
Etheredge attorney Steve Joseph acknowledged Thursday that the $25,000 loan in February to meet payroll is among the transactions his client has discussed with securities investigators. But Joseph said the deals were among friends.
"I'm confident they're going to see that this is a bunch of friends who had to recognize that Thomas was having problems," he said.
The loan
The payroll loan came Feb. 16 from New York attorney Holger Wrede, holder of the copyright to Hopalong Cassidy's image, and Fred J. Bush Rentals.
Both have filed a claim in U.S. Bankruptcy Court against the park for $25,865.38, an "emergency loan to cover Wild West World payroll," according to court documents.
Wrede had a longtime relationship with Etheredge, loaning him about half of the collection on display at the Hopalong Cassidy Museum on the grounds of the Prairie Rose Chuckwagon Supper in Benton.
Wrede's loan came about a month after Fox gave Etheredge $50,000 "to help finish building the park."
And it came at roughly the same time Porter plowed $100,000 into the park in a combination loan/investment, again to help finance its completion.
Porter said he knew vaguely that "money was tight" for Etheredge.
Etheredge was sending out pleas for patience to creditors in January, according to bankruptcy court records. One recipient was Pan Amusements, an Oldham, England, firm that sold him a six-gun Wild West shooting gallery.
In fact, the park was in financial trouble dating back to the fourth quarter of 2006, Joseph said.
One big reason, said former Wild West World marketing director Ryan Cole, was Etheredge's penchant for largesse -- spending six figures on a stagecoach and clock for the park while ignoring pleas from Cole for a marketing budget.
"The cash flow problem was obvious," Porter said. "He was really pressuring the church for advance payments on the land we bought to build on."
Summit Church was meeting in the Johnny Western Theatre on the Wild West World grounds. Church leaders had paid Etheredge $400,000 for a parcel of park land to build a permanent church.
Former Wild West World employees said they worked under a vague "overtone" of financial trouble.
"From the day I started working there," Cole said, "he was always coming to me, applying the pressure, saying, 'Sell something. I've got to have money.' "
The Wrede claim also includes a March 8 promissory note from Etheredge for $25,000 payable on June 30 and 100 percent interest -- another $25,000 -- payable on Aug. 30.
Also included in the filing is a March 8 check from Etheredge to Wrede and Bush Lumber Co. for $25,000, with an attached note asking the check not be cashed until June 30.
Wild West World closed July 9 and filed for Chapter 11 bankruptcy protection the same day. The check was never cashed.
Reach Bill Wilson at 316-268-6290 or bwilson@wichitaeagle.com.