Palace of Mystery Chap. 11 may be thrown out

by Karen E. Culp

SBJ Staff

Palace of Mystery Inc.'s Chapter 11 bankruptcy case will probably be thrown out, said the company's attorney, Dan Nelson. The company, whose president is magician and Branson performer Kirby VanBurch, filed for bankruptcy protection Jan. 19.

The judge in the case issued an order requiring Palace of Mystery to show by Feb. 23 why the case should proceed as a reorganization. No response was filed.

At a first meeting of creditors Feb. 24, Nelson announced that the case would likely be dismissed. The creditor, Palace of Mystery, filed for bankrutcy protection because of "alleged arrearages in its lease agreement," Nelson said. The company is in a dispute with Thirty-Five LLC, the landlord that owns the building where VanBurch performs his magic show.

The dispute is over how much money Thirty-Five LLC is owed in rent, Nelson said. The filing was completed to prevent the landlord's terminating the lease, which is no longer a concern since Thirty-Five LLC has taken over as operator of the theater, and VanBurch has been hired by that company as a performer, Nelson said.

"Mr. VanBurch will not be involved in the operation of the theater this year," Nelson said.

Jerry Phillips, representing the U.S. trustee in the case, said he was still looking at the case to determine whether the trustee will file an objection to the dismissal.

No schedules have yet been filed, and at the first meeting, Phillips tried to determine whether the company had any assets to pay creditors.

VanBurch said during the meeting that Palace of Mystery had $20,000, which had recently been withdrawn from a bank account with Ozark Mountain Bank in order to open a debtor-in-posession account.

That account had not been opened as of the first meeting.

The first meeting may be continued, as the amount the company owes to various entities has not been determined. The company has some tax debt in addition to its dispute over the amount owed to Thirty-Five LLC. [[In-content Ad]]