THE FIRE
Post season, the operator of 7 water parks in the entertainment industry found itself in sudden financial distress due to construction cost overruns at two new water parks.
The operator was unable to pay meaningful amounts of its debt service, which consisted of a revolver and a term loan and completely depleted its $5MM cash reserve to cover construction cost overruns.
Due to prospective valuations that were well below market, the lenders would not approve the sale of the parks.
The 1st lien lender moved toward foreclosure.