Palace of Mystery files Chapter 11

by Karen E. Culp

SBJ Staff

Palace of Mystery Inc. filed for reorganization bankruptcy Jan. 19, but the Branson magic show headlined by Kirby VanBurch, has no plans of disappearing, said the company's attorney, Dan Nelson.

Palace of Mystery Inc., the corporate identity of Kirby VanBurch's magic show in Branson, filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code as a result of operations from last year, Nelson said.

The corporation, which lists VanBurch as its president in its 1998 annual registration report filed with the Missouri Secretary of State's Office, has its principal place of business at 2353 State Hwy. 248, in the former Gettysburg Theater. Now the Palace of Magic, the venue is planned to open for its spring season, Nelson said.

"The theater plans to open by April 1 for shows, but of course there are a lot of things we hope to work out before then," Nelson said.

Palace of Mystery leases from the theater's owner, Thirty-Five LLC, Nelson said, and a disagreement over how much Palace of Mystery owed its landlord is part of what led to the bankruptcy, the attorney said.

"There is a dispute right now over payments under the lease. There was concern on the part of Palace of Mystery over whether the lease would be terminated, and since that was not desirable, we used the reorganization option as a way of resolving some of these things and preserving the status quo as far as the theater's operations and income were concerned," Nelson said.

The landlord has said it may be owed additional rent; the show paid a portion of its rent based on ticket sales, Nelson said.

"Right now that figure, in terms of how much is owed, is in negotiation. Our prospects look pretty good in terms of working that out, though," he said.

Another factor contributing to the filing was a lawsuit between VanBurch and the owners of the theater he previously occupied, Nelson said. That theater, now occupied by Melinda Saxe's magic show, is also known as the old Shenandoah Theater.

The theater continues to be occupied by Melinda, though the lawsuit filed in Taney County was over a provision in VanBurch's contract stipulating another magic show could not go into that theater for a period of time after his show left, Nelson said.

"Litigation is expensive, and that lawsuit to enforce this agreement is no exception. Having that other show in such close proximity was, of course, another contributing factor. It's difficult to do business when you're that close to such a similar competitor," Nelson said.

A first meeting of creditors in the case is scheduled Feb. 24 at the U.S. Courthouse in Springfield. Nelson said he did not know now how many secured and unsecured creditors there would be in the case.[[In-content Ad]]