American court hearing recordings and interviews - First hearing in the Glenwood Caverns Holdings, LLC chapter 11 bankruptcy proceedings - February 11, 2026

Episode Date: March 4, 2026

For more information about the bankruptcy proceedings, pending in Delaware, see https://dm.epiq11.com/case/glq/docketsFollowing entry of a jury verdict imposing damages due to a wrongful death, the owner/operator of the park and tour operator filed for bankruptcy protection, intending to appeal the judgment and try to stay in business and restructure its financial affairs. For news coverage of the bankruptcy filing, see https://www.cpr.org/2026/02/10/glenwood-caverns-settlement-bankruptcy-lawsuit-wongel-estifanos-death/

Good afternoon, Your Honor. It's nice to see you again. It's been a while. Bill Hazel Fine of Sullivan, Nimrock, Brown Hill, on behalf of the debtor, Glenwood Cavern Holdings. And I'd like to introduce my co-counsel, Mike Panko of Brownstein, Hyatt, Farber, and Shrek, and the company, CRO,

Paul Menoscalo of Macco Group Restructure Group. excuse me your honor I'm gonna make a few open your remarks mr. Pantau will go forward to it in much more detail but as you probably probably saw from the pleadings we're here because of very tragic accident on oh I should step back Glenwood operates and owns and operates the music park in Glenwood Colorado tragic accident resulted in the loss of a young girls life the plaintiffs got a huge judgment against can't pay and over the last we got involved in this case in early December maybe late November and he had been ready to

file on several occasions in the meantime mr. Panko and mr. Manuscalo have been in discussions with the plaintiff's counsel about possible settlement we received numerous standstill agreements to stop execution. Eventually, we ended up filing on Monday. And part of the reason I bring that up is to express my heartfelt thanks to the US Trustee's Office for the on again, off again, on again and off again.

They've been very, very cooperative and have made this process a lot easier than it could have been. And I'd also like to thank the court. We've made numerous calls to the court about a possible bankruptcy filing. And so they've been very cooperative as well. Your Honor, I just want to mention service of all the first the petition in the first day pleadings.

Ethnic restructuring is our claims and noticing agent. I have a certificate of service here. uh... uh... testing to the service of everything i don't know if your honor would like to see a copy and they assure me it's the it's all been served according to the the court's rules and with that i will turn the phone over to mr pantow

thank you good afternoon your honor and uh... thank you it's a privilege to be in this court i also would like to second uh... mr hitherto's expression of gratitude to the united states trustee They were extraordinarily responsive and extraordinarily patient through the fits and starts of this and have been a pleasure to work with. So I think we're here by consent. We may have one issue, you know, a couple of issues floating language, and I don't want to get out in front of anybody on that, but I think we're proceeding by consent.

So I'll just give a quick overview. I think the court has probably heard a little bit and probably has read the papers. The debtor before the court is Glenwood Cavern Holdings LLC. It owns and operates an amusement park in the town of Glenwood Springs, Colorado, which is on the western slope on the other side of the Rocky Mountains from Denver. If you're driving from Bayle to Aspen, you'll drive from Glenwood Springs. It's a town of 10,000 people. It is the only mountain top amusement park in the USA.

one access is the park via gondola the park started 25 years ago as as tours of caves located in the mountains and started adding rides about 20 years ago currently the park offers cave tours six rides and other attractions for for some order of magnitude the park you know attracts attendance plus or minus of about 200,000 of patients a year. Revenue is about 16 million plus or minus. And the assets are unique. It's up on top of a mountain side of a mountain or roller coasters, up on, excuse me, with a mountain view. It's, I have personally never been there,

but I have seen pictures that is unusual. The parks' employment varies seasonally. during the summer months it employs about 250 people it's not what you would call a destination park like the six flags or a Disney it but it is an important attraction in in a small town that that does generate in significant or does dependencies in significant part on tourism the corporate structure is fairly simple there's this is an operational entity despite the and holdings in it and it is 100% owned by another entity called G-cap Holdco LLC. That in turn is owned by, in part by some private equity investors and a 17% interest

retained by the founder of the park. I'll just mention one outside director because I think it gives a point of comparison for the part. His name is Jeff Plach. He doesn't have a financial investment in the park, as I recall. He happens to run the amusement park on the Santa Monica Pier in Los Angeles. So it just has a little color to that. The debt structure here is very simple.

There's a secured lender community banks of Colorado, outstanding balance of just under $13 million, series of loans secured by a need of trust, which is the Colorado equivalent. of a mortgage. The maturity start in 2029. There's a small amount of trade debt. And as Mr. Hazelke mentioned, the largest debt, and the reason we're here today is a large judgment resulting from this tragic accident. Let me ask the question because I'm curious. So the bank has a mortgage.

Does the part, I mean, the park owns the park, that it doesn't own a mountain, does it? How does that work? Oh, it owns real estate. That happens to be located on the mound. Okay. So it does have the real estate that the park is owned on it owns. I mean, the park is on it owns. Right.

Got it. So the reason we're here ultimately is this tragic accident, and the consequences from that. In September 2021, the little girl died on one of the parks arrives. And it would be presumptuous of me to speak of the effect on her family. just have to touch briefly on the park's response. The park shut down that ride for two years, redesigned it, has reviewed revamped safety processes engaged gold standard outside training individuals,

and they have trained their supervisors who then audit and their, monitor and it is a very rigorous training and auditing program. In addition, one of the other rides that had been manufactured by the same manufacturer, they just shut it down permanently. And from these lessons that have been learned, the park has thought it important to reach out to the rest of the industry and has reached out, engaged in trade groups, and made presentations to other amusement.

parts on what can go wrong how to prevent it from going wrong and hopefully somewhere on a parallel path there's wrongful bet litigation you know that that proceeded through the Colorado state courts trial in September of this year a verdict came back order of magnitude with a hundred million dollars so here we must obviously deal with the financial impacts the underlying CGL insurance policy was only five million dollars And that actually includes a primary and a first level access. So obviously the judgment far exceeds the assurance available. After the judgment was entered, the company retained Mr. Manas Galcoe's chief restructuring

officer and counsel. And the plaintiff at one point started to execute on the judgment. But then the conversation started. We reached out and tried to work this out over the last several weeks. In the process, we provided comprehensive financial information to the point of the available to answer questions because there was back and forth, and in that there was a series of stands for agreements. The last one expired on Monday, which is why, you know, moving forward in this Chapter 11 case, Your Honor, I should point out this is not a prepack.

Our planning and efforts and the efforts of the company and the board have been focused. primarily on finding a solution out of court that would preserve the park and would be used to be satisfactory for the plaintiff so the debtor will need to take a little bit of time use the automatic stay of re-use spell here and determine the best exit strategy which may be a going to concern sale on a parallel path you know the the state court litigation technically will now be stayed I would anticipate publicly modify the state to permit appellate to scheme go on and discuss that with like the company.

And, you know, we could have a plan with a sale, potentially with the claims reserved to sort that out. Now we continue, and we may also continue to negotiate with the plaintiffs. Now, of course, in a slightly different context than we were outside of court. The immediate needs of this debtor, I think, are fairly straightforward. It does not need dip financing. instead of revolving the facility, the lending here generally because there's a lot of seasonality in the cash, the company would just hold a large cash balance from the high months,

and then it would decline over time in the low months. So at the end of summer, cash is high, starts to decline. The trough bottoms out probably April may, depending on the weather. So right now we're sitting on approximately. $3 million cash and for the next few months there will be a cash deficit you know seasonality and you know cost of administration so I mentioned we do not need a dip financing we do need cash collateral and in that regard we are proceeding by consent we'll also need to ask the court for permission to make our payroll the

payroll cycle happened to end Sunday night just before our petition and permits it we can't check on Friday. And then we have other matters such as insurance to address. So we can jump into the specific motions, we'd like in honor. And we have shared these with the bank and with the United States trustee and have received their comments.

And before I jump into specific moments, I would offer into evidence the declaration of Paul Menace Delta, which sits at docket number 10. Yes, let me ask, are there any objections? to Mr. Manasca alpha. This declaration coming into evidence. Thank you. So we can start.

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potential savings will vary, not available in all states or situations. I wish to be heard with respect to the redaction motion. I reviewed it prior to the hearing. I see the changes that have been made at the request of the Office of the United States trustee. the changes are appropriate and I will approve it as revised. Thank you. Next, and I can just follow the docket numbers for now,

the motion regarding, or proposed motion at docket number five regarding insurance. Yes. Disrespect, Your Honor, the debtor maintains the normal and appropriate assurance that the court might expect to see. For property insurance, there is, there are two twists. One is that there's a premium financing so that there's a monthly payment shared for efficiency among various entities. Number one, and number two, there's a broker's fee that is associated with that permission to continue pursuant for that program and, of course, on another insurance that we need to. With respect to the insurance motion, this is part of the shared services arrangement, correct?

broadly speaking this insurance program and I've seen it for instance where multifamily you know or things are under common management there are companies other otherwise unrelated that happen to be owned pitch their insurance together in order to save costs the so we get a lower overall quote and then the the allocation to this debtor comes from the carrier as part of their quote Okay, so this allocation is not an internal allocation, it's from the carrier based on whatever the carrier base is a premium law. Precisely. Okay.

Are there any changes to this form of order? Yes, there were some corrections in the figures, and there is a provision inserted, I believe, at the request of the United States trustee, that the debtor will provide prior notice to the U.S. trustee of changes. Okay. Is there a red line? so I see the cap has been changed and reduced on the interim basis. And did you all get a Johnson? Yes, March 11th at 2 o'clock.

Okay, so that can be inserted in your forms of order. Okay, okay, I've reviewed this, I see the changes made at the request of the Office of the United States trust you, the better obviously needs to continue with its insurance in place. in place and I will approve this on an interim basis as necessary to avoid immediate and the record of harm. Next I would proceed to docket number six of motion regarding the court. In that respect, Your Honor, the debtor has been current in payment utilities as generally it has been in what we are proposing in the utilities motion is a deposit in the amount of

and other ones that have been current on the bills. There had been some back and forth about where to place the deposit, and the U.S. trustee had requested that the deposit you know that a bank that had signed the UDA, which our current bank and our current mother has now. So, and that's an issue for cash management, which we're coming to. And I think the resolution here, which we've come to shortly before the hearing, is that though it's only about $12,000 of utility deposits, the direction of where that's deposited

is subject to the cash management resolution. So for now, they will be deposited at our existing bank in Vancouver, Colorado, subject to further proceedings. Okay. Next on my list, Your Honor, at Docket 7 is the cash management motion. Generally speaking, Your Honor, the debtor operates with four accounts. There's its general operating account where most of the activity is. Into that operating account, the debtor receives its revenues, credit card remittances,

and it also pays expenses out of that account. Then there's a separate payroll account. That payroll account is administered by a third party, pay-com served, and with the trump and pay-com issues checks out of the payroll. account you know, two employees. Then there are two money market accounts. Those are kept separate because of the size of the balance, so that the size, if somebody hacked into the operating account, for instance,

they wouldn't get all the money. So that money, there's about $2.4 million in that account, right? Continue with those existing bank accounts. There are reasons for that that we would urge the court, we understand the list of those. the trustee's position because we need to ask the labor section 345. The resolution for today is that the U.S. trustee has asked that we would certainly to the court order that says absolutely there are over there with its trustee.

Now I think there might be one or two open language issues on the order or are we finished on that exact order. I'm good friend Mr. Waxman sent me comment to this order like at 2.25. Okay. And I had them print it, but apparently the black line doesn't show off. So I can hand, Your Honor, a copy of the black line that we did. Well, let me see what we have. That's perfect. I wasn't even got a comment on that.

It's paragraph 11, Your Honor. There's a very small change. I can't read the black line. Okay. Well, if this is agreed upon language and the U.S. just these signs off on it, then I'm sure it will be acceptable to me. Thank you for the U.S. I have seen the language.

I am not thrilled with this resolution, but as we have all agreed amongst ourselves, this is the first day hearing. This is not a final order. It is fairly customary to give debtors who are not in compliance a period of time to do so. Mr. Waxman is discussing the matter with his client in terms of whether that bank is willing to sign a UDN.

345 allows the debtor, although my people and told me it's not actually the debtor that gets the bond, but somebody gets a bond and protects it. Because if you look at the cash management motion, between $7 and $8 million total in these debtor accounts, we're still not sure whether the money market accounts are risk-bearing accounts, but we're, you know, money trades or anything like that, and that's another problem

under $3.45, but it's, I think it's very fair to let the debtors have a lot of money. a breathing spell or people can get that resolved if not we can come in front of your honor and say no there's no grounds for 345 waiver or the better presents their case and convinces your honor that there is better I certainly think there should not be on the first day of disruption in the debtor's accounts which it needs to be able to use in order to make payroll for example so and then you know pay insurance etc so I will approve a form of order with revised language that has been circulated and agreed between the debtor,

the bank, and the Office of the United States trustee. And we'll deal with what happened after today when parties are able to discuss and see what the options are and what the debtor proposes what it wants to do on a fine basis. So I will sign off on that as necessary to avoid immediate any record. Next on my list is payroll at relief. I believe that we need simply permission to the last payroll cycle, which happened to the day before the end.

It is obviously necessary to keep employees in the meanwhile. What we have requested is authority to set forth in the proposed interim order on a not-to-exceed basis of $211,000. The order I believe also provides, and I could represent that via. famous individuals cannot exceed the 507 cast. We did add there was one comment,

and I think this may have been the only comment to this motion from the United States trustee, asking that the order to provide the debtors will not discontinue or reduce any compensation to employees without notice and an opportunity for hearing. We were able to that. We had no thought of doing something. if I may have terminated all the reasons and it caused an enormous amount of disruption and all that so I don't think the debtors are going to do this but if they feel the need to reduce these benefits programs or eliminate them especially because some of them have to do with subsidized housing and that's worth up to please let the employees know sufficiently in advance that everybody can support for yes I saw the benefits that we don't always see

in cases I was curious about the property professional lease just at page 12 of the motion. The debtor sub leases a rental property to an employee. I do have a recollection of this. Yeah. So I don't get this wrong. I'll ask the CRO if you join me at the podium. That's okay. I'm fine.

Generally, Your Honor, and I think labor is how Housing is very difficult in that part of, you know, in that region of Colorado, and housing for employees compensated that level very hard. So what the company has done on it in a few is subsidized housing for a dozen or something at a time. And we want to be sure we're answering the precise question. The cavern, the housing posture, so what you see depicted here, these are forms of subsidized housing. So it's coming through as a benefit. And there are others for, you know, for other, for multiple employees. I think this one is for one.

And depicted in 39, that's the subsidized housing. And then depicted in item 40 there, the sublet. I see. And the debtor here is paying the landlord's 1350 a month, and then it's sub-lease. that property to an employee for whatever percentage of that or in taking it out of the paycheck. Got it? Yes, Your Honor.

Got it. Okay. The question I had with respect to the benefits that are being provided. Is there then a revised form of order on the employee wages and benefits motion? I did. Did you give me that one? That would be the one with paragraph 7 in the red line. have seven in the red line, but they won't be reduced. Yeah. Okay, does anyone wish to be heard with respect to the employee? Regist motion?

If you know when I reviewed it, I've asked my question. I have no other questions. Obviously, the employees need to be, continue to be paid, what they have on. So I will grant this as necessary to avoid immediate and a reversible harm and revised form for the comments in the office of the United States. Thank you, Your Honor, subject to everyone,

making sure that they have their eyes on the same language and are able to it, I think we're proceeding by percent here. Yes. As she should put the bank, both as lender and depository bank, which is part of the spill I left out in terms of tax management. And there are, you know,

has been back and forth regarding a budget and what's needed to maintain operations at the park. There is a budget attached and part of the proposed cash collateral order. A form of order that is presented to Your Honor authorizes its expenditures in the ordinary course of business and the funding to normal operations pursuits to the budget, all of which are needed to. I think, you know, and this may be subject to, in terms of clarifying language, but of course, the replacement means offered his adequate protection. I should also note that this does have a challenge period, you know, that structure. The U.S. trustee did make some informal comments, and I believe all of them were accommodated in this,

again, subject to the question of the, you know, whatever the last second change was. and I could one of them relates to the fact that the lender is not an approved depository so we have to you know address that again another was regarding the priority of the replacement liens just ensuring that that was completely clear ensuring that the challenge period is 75 days and then there was in paragraph 10 provision regarding termination of use of collateral preference so on this one in particular I want to be careful and open the floor to other parties because I think there was some language yes Mr. Watson good afternoon again your honor your honor being one additional change subject means okay so replacement liens are not finding liens if there is some senior lien and they're subject to challenge those changes are acceptable to the debt of your honor and just a little bit additional color probably the

The only type of lean one we can talk about here is a clean property tax. You know, just, you know, the company that's paid its trades, you know, as it goes for, we're unaware of any situation like in the panace or anything like that. So the language here, it has to be right, but it is probably academic. I just think there was probably a, carried over. So I see this is the challenge paragraph and I see the change in the challenge period to 75 days, so that's great. And then here, there's a reference to if a trustee is appointed, what happens to the challenge

period. And it says the trustee shall have until the later, one, the expiration of the challenge period, or two, the 30th calendar day, or the first business date thereafter if the 20th calendar calendar days on a Saturday. I assume those are supposed to be the same, and I don't know if it's 20 or 30, and which all landed on, but since you're gonna fix the order,

we can fix that. A couple of changes that I had, Ms. McCollum has taken care of. So I've reviewed this, I've looked at the order. It seems to me a very straightforward consensual usage of cash collateral with no determination being made by the court with respect to the collateral, including cash collateral, and with replacement liens and a super priority claim and no priming.

So on those terms and given the consensual use and the comments of the United States trustee haven't been taken and a budget being agreed upon, I will approve on an interim basis the use of cash collateral as set forth in the order in the book. That will be approval of a revised form of order which has the language, the bank's new language and the orders or submit them on their COC. I guess I'd like to see the red line particularly of the cash collateral order so yeah and cash management okay so we'll submit those on the CFC and upload the rest and I think you can upload the rest because I've seen those and you're just

going to add the second day thank you your honor and let us know in particular when the cash collateral comes over shoot us an email because I know that's unsensitive you get the cable code the cash collateral things like that that's fine That's fine. It is so ordered. I just want to make sure that we're not moving up anybody's speech. I appreciate that, and I'm sure did that or that. We do indeed, and we appreciate the court's availability and opportunity to present these motions.

And again, thank the other parties in the trust. If there are no other questions, I'd be working. All no questions. Anything further this is today? Use the column. I just wanted to let you know that the committee solicitation letters went out yesterday, and we are also discussing the commission that are interview time and that seems to be proceeding. We're adjourned.