Pa. volunteer fire dept. files for bankruptcy

Debts include $35,066 owed to the Pennsylvania Department of Labor and Industry for unemployment compensation taxes and $18,743 owed to the Pennsylvania Department of Revenue for withholding taxes

January 15, 2016 08:18 AM

Erie Times-News

ERIE, Pa. — Conneaut Lake Volunteer Fire Department has filed for Chapter 11 bankruptcy protection for its fire station, social club and other facilities.

The department owes $1 million to $10 million and has assets of $1 million to $10 million, according to a filing in U.S. Bankruptcy Court in Erie on Tuesday. Department President George Zeljak signed the bankruptcy petition.

Debts include $35,066 owed to the Pennsylvania Department of Labor and Industry for unemployment compensation taxes and $18,743 owed to the Pennsylvania Department of Revenue for withholding taxes, according to court papers.

Fire Department financial troubles came to a boil in December when Mercer County State Bank foreclosed on its property at 11877 Conneaut Lake Road, in western Crawford County. The department owes more than $1.5 million in mortgage debt, interest and late charges on the property. The property includes a fire station, administrative offices, training facilities and Station 3, a members-only social club and banquet facility overlooking Conneaut Lake.

Property owned by the department at 10877 Route 18 in Conneaut Lake is also included in the foreclosure action.

The Fire Department is in default on three loans: $986,000 and $640,000 loans from Dec. 12, 2008, and a $111,000 loan from May 24, 2011, according to court papers. The aggregate due on all three loans is $1,516,912.

Tuesday’s bankruptcy filing will stop foreclosure proceedings.

The Station 3 social club remains open for business, and the fire department is still answering emergency calls.

Businesses filing for Chapter 11 bankruptcy protection can continue operating while they reorganize their finances and pay debts over time.

A fire department official said Wednesday that the department would release a statement on the bankruptcy after a meeting with its attorney Wednesday morning. No statement was received by the Erie Times-News by press time Wednesday night.

The department’s attorney did not return an Erie Times-News phone call Wednesday.