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Yellow Ribbon goes to NationsBank

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by Paul Flemming

SBJ Staff

NationsBank owns Branson's Yellow Ribbon Theater, and all that remains is for the other creditors in the bankruptcy of Falls Theater Partners LP to scramble for the scraps.

"We gave the bank a deed. The bank owns the theater now," said Ron Stenger, managing partner of the general partner in Falls Theater Partners.

Falls Theater Partners filed July 24 for bankruptcy protection from its creditors. The partnership was in default on a 1993 $5 million loan from the former Boatmen's Bank of Southwest Missouri, now NationsBank. The theater closed for good Dec. 15.

NationsBank is scheduled Feb. 11 to hold an auction of the theater's equipment at the Taney County Courthouse in Forsyth. Bank officials were unavailable for comment on plans for the theater and land. A courthouse auction will not be held for the land, as a quit-claim deed was delivered to the bank in lieu of the foreclosure, according to bankruptcy court documents.

Falls Theater Partners has assets of between $300,000 and $350,000 to pay administrative expense claims of $790,000. Those expense claims are in contention in the Chapter 11 bankruptcy proceeding and were to be the subject of a hearing Feb. 5.

Among the claims:

?$138,158 claim by Tony Orlando

?$91,357 claim by Wayne Newton

?$29,947 claim by the limited liability partnership's bankruptcy attorneys.

?$310,208 claim by Branson Land Company.

"People are arguing as to the amount they are owed," Stenger said. "All that's left is for the bankruptcy court to decide who gets what and then distribute it. There's not enough money to pay everyone in full."

Also among the scheduled subjects of the Feb. 5 hearing was an order from U.S. Bankruptcy Court Judge Karen M. See to show cause why a trustee should not be immediately appointed, the case should not be converted to liquidation or the case should not be dismissed.

Facts presented in the case "have raised issues as to whether debtor has continued to operate in a Chapter 11 proceeding when it may have been known or ascertainable that there would not be sufficient funds to pay all administrative expense, and during which time it may have been to debtor's benefit to pay administrative expenses on a selective basis and to pay cash collateral payments to ... NationsBank," See said in her order.

An August agreement called for Falls Theater Partners to make $400,000 in payments to NationsBank in order to be allowed to try to sell the theater. Those payments were made, but the deal called for payment in full of the $5 million promissory note by Dec. 31 or transfer of the theater's deed.

"We had a buyer, but they couldn't get their financing," Stenger said.

Both Orlando and Newton's performance contracts expired at the end of 1997, but magician Kirby Van Burch had signed a contract to perform at the theater in 1998.

Orlando and Newton moved together to a new theater.

The buyers "were going to take assignment of the Kirby Van Burch contract," Stenger said, but "when it became apparent that (the purchase) wasn't going to happen, (Van Burch) started looking at his other options."

Van Burch has pursued the purchase of the Gettysburg Theatre from Mercantile Bank, which bought the theater at foreclosure proceedings it held in 1997.

Both Newton and Orlando are attempting to get money owed them certified as administrative expenses. Filings from both contested the expense claims of the bankruptcy attorneys and of Branson Land Company, of which Stenger is president.

The claim is based on a $300,000 loan Branson Land made to Falls Theater Partners in August 1997. In earlier filings, Branson Land Company was listed as a creditor owed more than $1 million in unsecured debt. Ron Stenger Co. and Springfield Land & Capital LLC, of which Stenger is also a principal, were listed with more than $3 million in unsecured claims.

Documents filed in the case showed that until the first week of December, both performers were paid as per their contracts. Since July, after Falls Theater Partners filed for bankruptcy protection, documents showed that Orlando has been paid more than $977,000 and Newton has been paid more than $530,000.

Orlando's performance contract was not a public part of the bankruptcy case file, but Newton's contract called for the singer to receive 80 percent of ticket sale revenues in excess of $4,000, until more than 90 performances were performed in a year, along with other provisions.

Newton's filing said he was owed $88,772 for his personal performances and $2,586 for sale of merchandise and licensed products.

Orlando's filings in the case said he was not paid, as per practice, on Dec. 8, 1997. He performed through Dec. 15, and after an agreement was reached to pay him $69,079 for each of the two weeks he was not paid, he was released from performing between Dec. 16-21 as his contract called for. Orlando had been under contract to the Yellow Ribbon Theater since Dec. 12, 1992.

The end of that contract is part of the reason NationsBank court filings said the theater was worth less than it had been previously.

Before the deal between Falls Theater Partners and NationsBank was struck in January, the bank entered filings that said the value of the theater diminished $1.25 million between the time of the bankruptcy filing in July and the end of 1997.

"The decline in the theater's value is tied solely to the actions of this debtor," the NationsBank filing said, because of Orlando and Newton leaving, no performance contract for 1998, maintenance of the theater that was delayed because of the bankruptcy proceedings and "damage to the theater by performers or their staff in December."

A NationsBank motion in December said the theater had been appraised Dec. 13, 1996, for $5.75 million, and the appraisal said it could take between a year and 18 months to sell the property.

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