Oct. 19—U.S. Bankruptcy Court for Western Pennsylvania has postponed a hearing on whether the new owner of Conneaut Lake Park may have violated its purchase agreement of the park.

An order issued Monday afternoon by Judge Jeffery Deller postponed today's scheduled hearing until Nov. 2 to give Keldon Holdings LLC additional time to make a detailed written response to the allegations raised by homeowners within the park.

Deller's order states Keldon Holdings LLC's response to the allegations, which was filed by a Monday deadline, was "not compliant with the court's recent directive. To be clear, the court is treating the letters filed pro se (self-represented) as a 'motion' seeking to enforce the sale order and charitable use restriction against Keldon Holdings LLC."

Letters sent to U.S. Bankruptcy Court in September by seven residents in Conneaut Lake Park allege Keldon Holdings LLC has violated its purchase agreement of Conneaut Lake Park. Keldon Holdings LLC bought the park from Trustees of Conneaut Lake Park for $1.2 million on March 2 at a U.S. Bankruptcy Court hearing before Deller.

Trustees of Conneaut Lake Park is the nonprofit corporation that oversaw the amusement park's operations. Trustees filed for federal Chapter 11 bankruptcy protection in December 2014 to reorganize its debts and needed U.S. Bankruptcy Court approval for any sale.

The court's approval of the sale required public access to the park's property to continue. Parts of the property have deed restrictions requiring it to be open for use by the general public. The sale included the amusement park and its rides, water park, beach area, Hotel Conneaut, Camperland campground, and any active leases on assets such as the hotel and the park's water system.

Two joint letters sent to U.S. Bankruptcy Court in September by seven residents in Conneaut Lake Park allege violations of the purchase agreement by Keldon.

The residents allege Todd Joseph, the owner of Keldon, has restricted access to their homes within the the park due to the erection of fences across rights of way, potentially impairing safety. Residents also allege problems with water utilities and streets.

The residents allege Keldon has violated the agreement by the removal of buildings within the park and "ignoring the requirements conveyed by the court."

The Conneaut Lake Park Preservation Fund also sent a letter to the court alleging violations due to buildings being torn down and rides removed.

On Sept. 20, Deller set a hearing for Oct. 19 and also directed any responses be filed with the court by Oct. 12. However, neither Keldon nor Trustees filed responses by Oct. 12, prompting, a new order Friday requiring each to address, both factually and legally, the merits of the allegations, and address, both factually and legally, whether U.S. Bankruptcy Court has jurisdiction. Deller ordered the responses filed by 3 p.m. Monday or face potential monetary sanctions from the court.

In its letter response to the court, Jeanne Lofgren and George Snyder, attorneys for Trustees for Conneaut Lake, said Joseph and Keldon had honored commitments to Trustees in closing on the sale which allowed Trustees to repay "a substantial portion" of its pre- and post-bankruptcy debt to creditors.

The Trustees' Chapter 11 bankruptcy case was closed by the court July 7 and the response said there was no factual or legal basis to reopen the Chapter 11 case.

Trustees said Keldon had honored other agreements — operating the amusement park, water park, marina and Camperland; honoring the lease of the hotel; honoring agreements to allow Pumpkin Fest and Ghost Lake to occur on the property; and investing in a Tiki bar and other improvements there.

Trustees also said at the sale-related hearings, Trustees told the court it had no operating capital, was in default under its bankruptcy plan, and had no prospects to continue.

"Neither the debtor (Trustee) not its counsel ever represented that the buyer would run the park exactly as it had been run decades ago," the Trustees response said. "At the time of the sale, the buyer represented the only means available for reopening the park for the 2021 season. The alternative was a chapter 7 liquidation."

Trustees also "had plans to demolish many of the blighted structures, but lacked the funds to accomplish those projects in the near term," its filing said.

Keldon's response by its attorney Peter Meltzer said U.S. Bankruptcy Court has no jurisdiction in the matter for several reasons.

The response states:

—It's an alleged dispute between two parties — Keldon and the homeowners — and doesn't involve Trustees in any way;

—It doesn't involve Trustees property;

—The Trustees' bankruptcy case was closed July 7, 2021;

—No motion of any kind was filed with the court;

—There has been no violation or allegations of a violation of the court's order approved the sale of Conneaut Lake Park to Keldon Holdings; and

—If there is a claim against Keldon, it should be filed in Pennsylvania's court system, not bankruptcy court.

A letter from Joseph to the court filed as an exhibit with Keldon's response said in part that status quo at Conneaut Lake Park has not worked for 30 years.

"This is why this property and business went into bankruptcy, and why it changed owners time and time again," Joseph wrote.

"I brought in more modern attractions and reduced the inventory of old 80-year-old, unsafe, mechanically costly rides," Joseph wrote. "I brought in a Reggae festival, a car show, a truck show, we honored Pumpkin fest lease, we honored Ghost Lake lease. We constructed a Tiki bar on the beach, we renovated and secured the beach, we installed fencing for crowd control.

"I've invested over $1.5 million of my money in addition to the $1.2 million I paid for the property," he continued. "We plan on expanding the campground, repurposing the amusement section to include less mechanical rides, and more interactive kid friendly attractions, we will continue to hold large festivals, and start holding major conferences. All of which I had planned from day one."

Running the park this year, Joseph said he got a first-hand view of what does and doesn't work.

"We will get rid of attractions that don't work, and bring in attractions that do work," he wrote.

Keith Gushard can be reached at (814) 724-6370 or by email at kgushard@meadvilletribune.com.