Ghost Town in the Sky Haunted by Lack of Cash Flow

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Maggie Valley, North Carolina—Despite having warned its employees that it might not be able to issue checks for the full amount of the pay in the final two weeks of its operation, an amusement park company could still be in violation of state labor laws.

Ghost Town in the Sky is currently operating under Chapter 11 bankruptcy, and hopes to be able to reorganize and then reopen. The company owes over 215 companies a total of $2.5 million in unpaid debts, and also has a $9.5 million mortgage on the amusement park property.

Usually when workers are not paid, they can take it up with the labor department. In this instance, however, the labor department does not have jurisdiction, because of the ongoing bankruptcy proceedings.

The park has had a troubled year, and has struggled to make payroll on more than one occasion in the past. Sometimes payday was delayed from Friday to Monday in order to take advantage of weekend ticket sales. Eventually the regularly scheduled payday was moved to Monday, but even that did not help. At times, only partial checks were issued, and the balance made up the next week after another weekend’s worth of revenue.

In October, just two weeks before both the end of the season and the permanent closure of the park, Ghost Town CEO Steve Shiver called a meeting of the employees and leveled with them, telling them that cash flow was tight and that they might not receive their full paychecks for the final pay period. He also gave them the option of shutting down the park early, but in a unanimous vote the employees agreed to keep the park running and come to work in spite of the financial risk.

The employees’ dedication to Ghost Town in the Sky, however, does not excuse the company from its obligation to pay them.

“The law says they must pay all accrued wages to employees on the regularly scheduled payday,” said Darrell Sanders, supervisor for the Wage and Hour Bureau with the North Carolina Department of Labor. “Even with the employees’ agreement, nobody can waive the law.”

One employee, who opted not to come to the meeting and who says he was never informed of the risk that wages might not be forthcoming, has filed a claim with the bankruptcy court in the amount of $386.

“Nobody ever said we might not get paid,” said Ron Coates.

 

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