Rent dispute persists between bankrupt Bowlski’s, Crawford Properties in El Jebel

The bankrupt Bowlski’s bowling alley in El Jebel received a judge’s blessing last week to continue using lender cash so it can stay open into at least the summer while it works toward a reorganization plan.

Veritex Community Bank, which holds more than $350,000 of the bowling center’s overall debt, was agreeable to the cash extension through July 31. The agreement means Bowlski’s will be held to a budget inspected by the bank, which holds a security interest in the alley’s assets. Those assets are described in court documents as “Inventory, Chattel Paper, Accounts, Equipment and General Intangibles.”

In his written ruling issued Wednesday, U.S. Bankruptcy Judge Thomas McNamara noted Bowlski’s “would have no ability to maintain day-to-day business operations” without the cash collateral, which “is necessary to realize and maximize the assets of the estate, and otherwise to afford (Bowlski’s) an opportunity to reorganize.”

McNamara’s ruling came after the judge on Jan. 18 gave interim approval for Bowlski’s to cash collateral to stay afloat. Last week’s order provides for a long-term cash collateral arrangement.

McNamara’s ruling supported a Feb. 8 motion filed by Bowlski’s bankruptcy attorney Aaron Graber saying any “significant disruption in the flow of cash and the use of the Cash Collateral would cause the Debtor to be unable to pay suppliers, overhead, and other operating expenses, resulting in this Chapter 11 case failing, the Debtor shuttering, and creditors receiving little, if any, recovery on their claims.”

Bowlski’s in El Jebel can keep operating by using lender cash through its bankruptcy, a judge ruled last week.
File photo

One of those creditors is Bowlski’s landlord Crawford Properties, which is due more than $118,000 in back rent.

The overdue rent was addressed in another Bowlski’s motion aimed at extending a court-approved delay to paying rent until March 3. That motion is pending; Bowlski’s declared bankruptcy Jan. 2 in Denver.

The motion from Bowlski’s noted that its bankruptcy filing was “precipitated by a dispute between it and (Crawford Properties), generally arising out of Lease-related charges that (Crawford) imposed during COVID-19, including during Spring 2020 when the Debtor was closed due to governmental restrictions.”

A Feb. 22-dated pleading from Crawford Properties, however, said the bowling alley was behind on its rent before the global pandemic struck.

“(Bolwski’s) has been in default of the Lease long prior to Covid,” the pleading said. “In fact, (Bowlski’s) was in default as early as July of 2017, less than a year after the first rent charge of October 2016. At one point prior to Covid, (Bowlski’s’ default exceeded $80,000.00. (Crawford Properties) has consistently worked with (Bowlski’s) on agreements for payment of past-due rent.”

As well, the motion, which was filed by Boulder attorney Karen Radakovich, called out the bowling alley and its owner for mismanagement of the operation and “failure to properly maintain the bowling alley lanes (which has caused local bowling leagues to no longer patronize the business), and numerous complaints about the lanes’ failure to work properly, causing annoying delays in games.”

Additionally, the alley hasn’t been serving food, has neglected the building to the point where it appears “trash and unkempt,” the motion argued.

The motion also disagreed with claims by Bowlski’s that business remains down in the Roaring Fork Valley.

“(Bowlski’s) claims it was previously Covid, and is now a lack of tourism traffic, which has caused its loss of income to continue,” the motion said. “Business, however, is now booming in the area; Creditor, being a local El Jebel family-owned business, can testify to the locally increased business activity and tourism.”

Bowlski’s lease with Crawford Properties dates back to August 2016.

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