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