Judge spares Bowlski’s financial grief, allows it to temporarily use lender cash | AspenTimes.com

Judge spares Bowlski’s financial grief, allows it to temporarily use lender cash

Bowlski’s in El Jebel received a judge’s permission Wednesday to use lender cash so it can re-open as it works with creditors to emerge from Chapter 11 bankruptcy.

Craig Spivey, part of the bowling alley’s ownership, previously said it would stay open through bankruptcy. Those plans, however, were derailed shortly after the alley declared Chapter 11 on Jan. 2, attorney Aaron Graber told U.S. Bankruptcy Judge Thomas McNamara during a virtual hearing.

“The reason for the bankruptcy filling is there have been some tensions between the debtor and the landlord,” he said. “The most current issue was that immediately after the filing, the landlord had an inspection of the sprinkler system done, and it was determined the sprinkler system out of code and leaking. The bowling alley, by order of the fire marshal, has shut down the bowling alley.”

Crawford Properties LLC leases the bowling alley and its restaurant and bar to Texas-based El Jebowl LLC, the corporate identity of Bowlski’s. Crawford Properties is owed $118,306 by Bowlski’s, according to a filing made Tuesday.

“We are trying to work things out to smooth things out to get the bowling alley open quickly and hopefully resolve the issues with the landlord,” said Garber. “If we can’t do it consensually, then it becomes an issue of the court … because this bowling alley cannot stay closed for an extended period of time.”

In the meantime, Bowlski’s is now allowed, on an interim basis under the judge’s approval, to use cash collateral to stay afloat. A long-term cash collateral arrangement would also need the court’s blessing.

Creditors did not object to the proposal, other than the Colorado Department of Revenue, which has a $27,761 tax lien on equipment owned by Bowlski’s. The department withdrew that objection, however, after reaching a payment agreement with the bankrupt party.

“We’re going to take the tax liability, spread it out over the 60 months the debtor gets to pay it off, then start those payments once the court approves the agreement,” said Garber. “And that payment works out to be $360 to $370 a month, and it certainly works with the debtor’s cash flow.”

Bowlski’s also owes $352,035 on a loan from Veritex Community Bank in Dallas. Veritex’s attorney did not object to the interim cash collateral request.

“To the extent our cash is used to buy equipment, the bank would want a lien on the property,” Veritex attorney John Young told the judge.

As well, the company also received $150,000 from the Small Business Administration through its Economic Injury Disaster Loan, but does not have to start making monthly payments, at 3.75% interest, until July. The SBA was notified of the bankruptcy but has yet to respond or file a claim, said Garber.

McNamara urged attorneys for Bowlski’s to keep a line of communications open with the SBA about the bankruptcy proceedings.

All told, there are $648,104 in secured claims on property owned by Bowlski’s and $184,239 in unsecured claims, which equates to $832,343 in total liabilities for the business, according to bankruptcy documents.

Assets of Bowlski’s total $209,810, which includes $170,000 worth of bowling equipment.

Spivey and other investors acquired the El Jebowl business — but not the building — in 2016. While they changed the alley’s name to Bowlski’s, El Jebowl LLC was made the corporate name for the business.

Spivey told The Aspen Times earlier this month that the pandemic decimated business and forced it to close for three months, putting it in financial peril. Several readers, however, have contacted the newspaper to say the alley has been poorly operated ever since it changed ownership. The bowling alley debuted in 1992 under the ownership of the Stecklein family.

The case is based the U.S. Bankruptcy Court for the District of Colorado in Denver.