Chesterton Tribune                                                                                   Adv.

Splash Down Dunes still closed by injunction

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Splash Down Dunes water park remains closed, one week after Porter Superior Court Judge Roger Bradford issued an injunction shutting down the facility until operator Paul Childress provides the court with proof of insurance.

Childress, meanwhile, told the Chesterton Tribune today that he intends to do so--that “we’ve had insurance the whole time”--and that the water park will be open for business on Saturday, Sunday, and Monday: the last three days of the season.

But then that’s it. “The game is over as of Monday,” Childress said, repeating the promise which he made earlier this summer to sell the facility, either intact to a good-faith buyer or in pieces on the auction block.

Bradford issued his injunction on Aug. 26 in response to a motion filed on Aug. 3 by Fred Pearson, Childress’ former partner. In that motion Pearson cites four grounds for an injunction.


In particular, Pearson claims, Childress has failed to provide proof of insurance to Pearson, failed to name Pearson as an Additional Insured, and failed to maintain the appropriate level of insurance.

“The plaintiff”--Pearson--“is in substantial danger of suffering irreparable harm if the water park is allowed to operate without the proper coverage including but not limited to the plaintiff being named as an Additional Insured on the policies,” a memorandum in support of Pearson’s motion states. “Once an event which gives rise to potential liability occurs, it is too late to go back and provide the coverage. Clearly, the operation of a water park, especially one where the county has raised issues of safety and health carries the risk of liability at all times. If Mr. Pearson is not properly protected with the insurance called for in the agreements, he could be left without any insurance coverage.”

Attached to Pearson’s motion is a copy of a story published in the July 10 edition of the Tribune on the temporary shut-down of Splash Down Dunes by the Porter County Health Department, after inspectors ruled that necessary safety equipment--like spine boards, hooks, and ring buoys--were not readily available and that chlorine levels were too high at one or more pool rides.

Other Grounds for Injunction

*Childress failed to pay Pearson a buyout installment of $300,000 due on Dec. 31, 2008, Pearson claims. According to the memorandum, Childress owes Pearson a balance in excess of $2.5 million plus interest, costs, and other fees and expenses “which continue to accrue.”

*Childress is delinquent in the payment of property taxes for the years 2005, 2006, and 2007, and owes a total of approximately $43,027.52, Pearson claims. Pearson “is further suffering irreparable harm by the failure of (Childress) to pay the delinquent real estate taxes,” the memorandum states. “The issue goes beyond mere money and carries the effect of inhibiting other business interests.”

*Childress has failed to allow Pearson to inspect the facility’s books and records regarding the operation of the water park, pursuant to the agreement under which Childress bought out Pearson, Pearson claims. “The agreements provide for this inspection and said inspection is necessary in order for the plaintiff to determine whether other portions of the agreements are being complied with including, but not limited to, the determination of payments due,” the memorandum states.

The Injunction

Bradford gave Childress until the end of the day on Aug. 26 to provide both Pearson and the court with proof of insurance. When Childress did not, Bradford issued the injunction. The remaining issues cited by Pearson’s motion will be litigated in court.

Bradford told the Tribune on Tuesday that, to his knowledge, Childress has still not provided the court with proof of insurance.

Childress, for his part, told the Tribune that he has every intention of doing so. There is, however, a dispute about the terms of the insurance policy. Pearson wants $2 million liability coverage, Childress said, while coverage under the existing policy is $1 million for a first occurrence and $2 million aggregate.

In any case, Childress said, Pearson wants to be named an Additional Insured and was supposed to pay for being so named but has not done so.

In fact, the injunction could become moot very quickly, with less than a week remaining in the swim season and Splash Down Dunes set to close at the end of the Labor Day weekend on Monday, Sept. 7. Childress today repeated his intention to dump the facility after the season, either by accepting any good-faith offer to purchase the park on reasonable terms or otherwise by liquidating the assets piecemeal in an auction.


Posted 9/1/2009




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