PORTAGE — Catalyst Lifestyles Sport Resort LLC filed a voluntary petition Tuesday for relief under Chapter 11 of the United States Bankruptcy Code.
The petition was filed in the U.S. Bankruptcy Court for the Northern District of Indiana.
"Sport Resort welcomes the opportunity to avail itself of Chapter 11 reorganization in the best interest of the company as it continues to plot its course toward the successful completion of the development," said Tony Czapla, managing director, in a statement.
The announcement came after the Portage Redevelopment Commission moved last month to foreclose on the property after failing to receive a $600,000 payment on the property purchased by the group from the city. The payment had been due in June.
That foreclosure proceeding has been put on hold, said Shawn Cox, an attorney with Hodges & Davis, helping represent the RDC in the foreclosure.
"The automatic stay will temporarily stop the foreclosure," Cox said, adding they just received notice of the bankruptcy filing and will review the documents and respond accordingly.
It also comes after lawsuits had been filed between partners disputing the operations of the company and development of the property.
One of Czapla's partners, Thomas Thomae, filed a petition for the dissolution of the company this summer and asked that what assets are remaining be placed in the hands of a receiver. The petition claims there have been disagreements between the partners and they do "not have sufficient cash or capital to continue any operations or development of the real estate."
Conner Nolan, an attorney representing Thomae, said Wednesday the bankruptcy filing came as a surprise.
Generally, speaking, Nolan said, the filing could put a stay in any other legal proceedings, in particular the petition of dissolution.
A hearing in Porter Circuit Court is scheduled for Nov. 13.
"As the company sought to commence operations," Czapla said, "we encountered an uncharted obstacle which required some strategic navigation. While the resulting delays have been frustrating, we are pleased to note that our tournament organizers and convention groups have remained committed to Sport Resort."
The bankruptcy filing lists local attorney and developer T. Clifford Fleming, of Burns Harbor, as the chief restructuring officer. The filing also states the company has $17 million in assets based on the 170 acres and more than $6.6 million in liabilities, including the $4.8 million owed to the city, unpaid bills for services, convertible notes and unsecured loans.
Plans for the Sport Resort include a hotel, 165,000-square-foot dome with an onsite sports medicine facility, a 15-acre recreational lake for cable wakeboarding, climbing towers, campground, 60,000-square-foot indoor waterpark and a 60,000-square-foot indoor drive-in movie theater with restaurant, playground, picnic area and unique seating in 40 vintage automobiles.