Park bankruptcy may cost Village Charters
Park bankruptcy may cost Village Charters
BY BILL WILSON - The Wichita Eagle - 12/18/2007 - original
Jeff Arensdorf thought his company was one of the few Wild West World investors that got paid.
At least he thought that until late last week, when attorneys hit Village Charters with the largest preference case to date in Wild West World's bankruptcy.
The bankruptcy estate wants the $100,000 that Village Charters got back from longtime customer Thomas Etheredge in April.
Attorneys claim Etheredge repaid Arensdorf's company April 9 and April 23 for a January loan. They say that is on or within the time frame established by law for a preference filing, which allows the bankruptcy estate to reclaim that money.
"Now, I was pretty sure he'd get that park open," Arensdorf said. "After that, you know, who could be sure? So I set up the loan as a 60-day deal. Felt pretty good about it. We'd had a good four-year relationship with Thomas."
The Village Charters loan, finalized on Jan. 7, is one of several personal loans Etheredge sought for Wild West World. It came five months before the park opened and about three months after bankruptcy court documents confirm the park's insolvency.
Many of those personal loans came from fellow members of the Rev. Terry Fox's Summit Church, ranging from $50,000 to $300,000.
The same court documents confirm Etheredge was in the midst of transferring about $400,000 from his Restoration Farms accounts to Wild West World at the time the Village Charters loan was finalized.
Etheredge closed Wild West World on July 9 and filed for bankruptcy. He closed the Prairie Rose Chuckwagon Supper on July 22, and Restoration Farms -- the parent company of both -- filed for bankruptcy Aug. 10.
According to bankruptcy codes, a debtor in possession -- Etheredge has retained operations rights during the bankruptcy -- can recover payments made to creditors 90 days before the filing. Wild West World filed for bankruptcy July 9, meaning the 90-day window began April 10.
The law is intended to discourage bankruptcy debtors from picking and choosing who they repay prior to a filing.
Susan Saidian, the Wichita attorney handling the preference filings, said the estate thinks the $100,000 is recoverable for redistribution to other creditors.
Arensdorf disagrees.
"I think it's outside the 90-day legal window, and I don't think they've got a case," he said.
But Saidian said that the law doesn't recognize when the check is written or delivered, only when it clears the bank.
Arensdorf said Etheredge told him the loan would "tide him over until his Small Business Administration loan came through."
"We'd done a lot of business with Thomas over the last four years or so," said Arensdorf, whose company set up trips to Carnegie Hall and to China with the Prairie Rose Wranglers, a musical group Etheredge helped found at his Prairie Rose Chuckwagon Supper.
"He had the documentation, he'd been a good partner for us, and I thought he'd pay us back. He did."
At least temporarily, Arensdorf remains confident his company can beat the preference claim.
"Look, I know Thomas' history, and I know that his character's in question," he said.
"But the guy treated our company well for four years, and he was always true to his word."