Glenwood Caverns Adventure Park - Chapter 11 Case Summary

Business Description

Glenwood Caverns Holdings, LLC (the "Debtor") owns and operates the Glenwood Caverns Adventure Park (the "Park"), a mountaintop amusement park situated atop Iron Mountain in Glenwood Springs, Colorado. Perched at 7,100 feet above sea level and accessible exclusively by gondola, the Park is the only mountaintop theme park in the United States and has been designated a National Natural Landmark.

• Glenwood Springs is a town of approximately 10,000 people located along the I-70 corridor, roughly 150 miles west of Denver, 60 miles west of Vail, and 40 miles north of Aspen. The town is known for its natural hot springs, Rocky Mountain vistas, and Western charm.

The Park currently hosts approximately 200,000 visitors per year, drawing guests from across the country, neighboring mountain resort towns, and the Denver, Colorado Springs, and Grand Junction metropolitan areas. It operates year-round, with peak season running from May through September. During the fall and winter months, the Park hosts events such as the holiday-themed Winter on the Mountain to sustain attendance.

The Park's revenue is derived from three roughly equal sources: daily admission fees (approximately one-third of gross revenue), attraction and cave tour sales (an additional one-third), and food and beverage, retail, parking, and other income (the remainder). Most admission fees are purchased online, and the Park also sells season passes and gift cards. Historically, gross revenue since 2021 has ranged from $14 million to $16 million.

• Although the Park operates year-round, the Debtor is typically cash-flow positive only from April through October. During the remaining months, the Debtor relies on cash reserves accumulated over the summer to sustain operations.
• Like many businesses in its region, the Park has faced rising costs for labor, insurance, and other services. Labor costs account for nearly half of the Park's annual expenses and are expected to continue increasing. Food and beverage, merchandise, and insurance costs represent additional substantial and growing expense categories.

As of the Petition Date, the Debtor employed 51 full-time and 71 part-time year-round employees. During peak summer months, the workforce expands by an additional 150 seasonal full-time and part-time employees, bringing total headcount to approximately 250. The Debtor is one of the larger employers in Glenwood Springs.

---

Corporate History

Iron Mountain, located to the north of Glenwood Springs, is home to an extensive network of natural caves that first opened to the public in 1895 before closing during World War I. In 1999, a company began operating tours of the caves, which were renamed the "Glenwood Caverns."

• By 2003, the cave tour operation was serving 100,000 visitors annually. To transport guests to the mountaintop cave entrance, the facility installed a tramway and, later, a gondola running from the base to the summit of Iron Mountain.

As the cave tours grew in popularity, the operation expanded into amusement park rides. The first rides were installed in 2005, including the Alpine Coaster, which remains in operation today. Subsequent additions included the Cliffhanger Roller Coaster, the highest-elevation, full-sized roller coaster in the United States at 7,160 feet above sea level.

• To maintain attendance, the Park has historically opened a new attraction every few years. The most recent addition was the Defiance Coaster, which opened to guests in 2022.
• Since an accident at the Park, the Debtor has had difficulty attracting new capital to fund additional attractions that would continue driving attendance and revenue growth.

Formation and Organizational Structure

In the fall of 2020, the Debtor was formed and acquired the Park and its associated assets. The Debtor is 100% owned by GCAP HoldCo LLC ("GCAP HoldCo"), which is not a debtor in the Chapter 11 Case.

• GCAP HoldCo also serves as the manager of the Debtor and is governed by a five-member board of managers consisting of Rob Kramer, Denis Reshetnev, Gideon King, Jeff Klocke, and Steve Beckley.
• Day-to-day operations are overseen by a general manager who reports to GCAP HoldCo. Reporting to the general manager is an assistant general manager and managers of various departments, including accounting, food and beverage, attractions, retail, maintenance, and human resources.

---

Operations Overview

The Park's offerings span cave tours, amusement rides, family-friendly attractions, dining, and retail. Currently, the Park operates three cave tours, six amusement park rides, and numerous additional attractions, including a 4D theater and gemstone panning, along with several dining and shopping options.

Seasonal Operations

The Park's operations are highly seasonal. Peak season runs from May through September, during which the Debtor generates the majority of its annual cash flow. The Park is typically cash-flow positive only from April through October, relying on summer reserves to fund operations during the off-season months.

• To drive visitation outside of peak season, the Park hosts seasonal events, including the holiday-themed Winter on the Mountain.

Revenue Model

Revenue is diversified across several streams, with no single category accounting for more than one-third of gross revenue:

• Daily Admissions: Approximately one-third of gross revenue, with most tickets purchased online. The Park also offers season passes and gift cards.
• Attraction and Cave Tour Sales: An additional one-third of gross revenue.
• Ancillary Revenue: The remaining one-third is generated from food and beverage, retail, parking, and other sources.

Workforce

The Debtor maintains a year-round workforce of approximately 100 employees (50 full-time and 50 part-time). During peak summer operations, the workforce scales to approximately 250 with the addition of 150 seasonal employees.

• The Debtor is one of the larger employers in Glenwood Springs, and labor costs represent nearly half of the Park's total annual expenses.

---

Prepetition Obligations

As of the Petition Date, the Debtor reported approximately $12.7 million in total funded debt. The Company's prepetition capital structure consists of a single secured lending relationship and no other funded indebtedness.

Secured Credit Facility

• The Debtor's sole prepetition secured lender is Community Banks of Colorado, a division of NBH Bank. The lending relationship is governed by a Third Amended and Restated Master Business Loan Agreement, dated March 23, 2022, under which the Lender extended several loans to the Debtor.
  • Certain of the loans originated prior to the Debtor's acquisition of the business, at which time the Debtor assumed all obligations under the applicable loan documents.
  • As of Feb. 9, 2026, the aggregate outstanding balance under the facility was approximately $12,712,184. The loans mature on various dates beginning March 1, 2029.
• The facility is composed of four promissory notes:
  • A $7,215,000 Promissory Note, dated March 23, 2018.
  • A $6,500,913 Amended and Restated Promissory Note, dated Oct. 28, 2019.
  • A $400,000 Promissory Note, dated April 4, 2016.
  • A $3,000,000 Promissory Note, dated March 23, 2022.
• The loans are secured by first-priority liens on substantially all of the Debtor's assets, supported by deeds of trust, security agreements, assignments of rents, and other collateral documents. GCAP Holdco serves as guarantor of the obligations.
• Although the Debtor was current on its debt service payments prepetition, the Lender declared an Event of Default and reserved all rights and remedies by notice delivered on Nov. 20, 2025.

Trade and Other Unsecured Claims

• The Debtor has no other funded debt obligations and had generally remained current with its trade creditors as of the Petition Date.

---

Events Leading to Bankruptcy

The Tragic Accident and Wrongful Death Litigation

• On September 5, 2021, a six-year-old girl, Wongel Estifanos, tragically lost her life in a ride accident at the Debtor's amusement park (the "Park") in Glenwood Springs, Colorado.
  • The child, along with her aunt and uncle, boarded the Haunted Mine Drop (the "HMD Ride"), a 110-foot vertical drop attraction manufactured by Soaring Eagle, Inc. ("Soaring Eagle") and sold to the Park in 2017. After boarding, the child sat on top of the two lap belts rather than being secured by them. The two ride operators failed to recognize this before starting the ride, and the child fell to the bottom of the mine shaft and died.
  • The Garfield County Sheriff's Office investigated the accident, but the District Attorney for Garfield County declined to bring criminal charges.
• On October 20, 2021, the child's parents (the "Plaintiffs") filed a wrongful death lawsuit against the Debtor in the District Court in and for Denver County, Colorado. The case was later transferred to the District Court in and for Garfield County, Colorado (the "Colorado Court"), and the Plaintiffs added Soaring Eagle, Altitude Rides and Attractions, LLC ("Altitude"), and both ride operators as defendants. Altitude was subsequently dismissed from the case.
  • On information and belief, Soaring Eagle sold its assets—including the HMD Ride product line—to Altitude in 2020 and ceased operations, leaving it with little to no assets and no insurance coverage.

Trial, Verdict, and Post-Trial Proceedings

• The case proceeded to a three-week jury trial in September 2025. The jury returned a verdict in favor of the Plaintiffs and against all defendants, finding:
  • The Debtor 49.95% at fault and Soaring Eagle 49.95% at fault, with the two ride operators bearing a combined 0.10% of fault.
  • A total of $82 million in compensatory damages against all defendants and $123 million in punitive damages against the Debtor—amounts that exceeded the statutory caps under Colorado law.
• Post-trial, the Colorado Court addressed the felonious killing exception under Colorado law, which permits damages to exceed statutory caps where the conduct at issue meets the elements of manslaughter by a preponderance of the evidence:
  • The Debtor had previously sought summary judgment arguing that the Plaintiffs failed to meet the procedural requirements to raise the exception, but the Colorado Court denied the motion.
  • Following trial, the Colorado Court ordered simultaneous briefing with only seven days to file, denying the Debtor's request for a reply brief and an evidentiary hearing. Less than 24 hours after receiving the parties' briefs, the Court found that all four defendants' conduct constituted a felonious killing, leaving the $82 million compensatory award uncapped. The Court reduced punitive damages against the Debtor to an amount equal to its share of compensatory damages.
• On November 21, 2025, the Colorado Court entered final judgment against the Debtor totaling $116,091,795.22—comprising $58,045,897.61 in compensatory damages and prejudgment interest and $58,045,897.61 in punitive damages.
  • The Debtor objected to the entry of judgment on the grounds that multiple post-trial issues remained unresolved, including the applicability of a liability waiver that could reduce or eliminate the damages award.
  • Judgment was also entered against Soaring Eagle ($58,045,897.61), ride operator Ochoa ($11,621.82), and ride operator Williams ($110,796.34).

Premature Collection Efforts and Lender Default

• Before the Colorado Court entered final judgment, the Plaintiffs pursued aggressive collection efforts:
  • On October 21, 2025, the Plaintiffs filed writs of garnishment directed at the Debtor's insurer—despite the absence of a final judgment. The Plaintiffs refused to withdraw the writs, forcing the Debtor to file an immediate motion to quash. The Colorado Court granted the motion and quashed the writs.
• On November 20, 2025—one day before final judgment was entered—the Debtor's senior secured lender (the "Lender"), which holds a lien on substantially all of the Debtor's assets, issued a notice of default based on the jury verdict and the Plaintiffs' attempted garnishment, reserving all rights and remedies.
  • The judgment far exceeds any amount the Debtor can pay. The Debtor, along with the two ride operators, is insured under a general commercial liability policy with a limit of only $5 million.

Settlement Efforts

• The Debtor made sustained efforts to resolve the dispute with the Plaintiffs:
  • Prior to, during, and after trial—but before the Colorado Court's ruling on the felonious killing exception—the Debtor, in conjunction with its carrier, extended settlement offers under Colorado Rule of Evidence 408, none of which the Plaintiffs accepted.
  • The Debtor and the Plaintiffs entered into a series of standstill agreements under which the Plaintiffs agreed not to execute on the judgment while the Debtor provided comprehensive financial and operational information reflecting its true financial condition. Despite these efforts, settlement discussions were unsuccessful, with the most recent standstill agreement expiring on February 9, 2026—the Petition Date.

Safety Improvements and Industry Outreach

• In the wake of the tragedy, the Debtor undertook fundamental safety improvements at the Park:
  • The HMD Ride was closed. A modified version reopened after two years with entirely new physical safety features, including redesigned belt restraints and a protective cage to preclude the possibility of a recurrence. A separate ride manufactured by Soaring Eagle was permanently closed.
  • The Debtor engaged International Ride Training—the industry leader in amusement park safety consulting—to implement process and training improvements, and instituted a program of independent safety audits employing outside auditors to blind-test compliance with new protocols.
  • The Debtor has also proactively shared its learnings with other amusement parks to improve safety industry-wide.

Operational Challenges and Capital Needs

• Independent of the litigation, the Debtor faces structural challenges to its business:
  • The Park is not a "destination park"—it draws primarily from residents and visitors already in the Glenwood Springs area, a town of approximately 10,000 residents located several hours over the Rocky Mountains from the Denver metropolitan area. Overall performance has remained relatively flat.
  • Attendance in 2025 was approximately 7% below 2019 pre-COVID levels, and the Debtor expects attendance to continue declining absent the addition of significant new rides or attractions.
  • Such investments are inherently capital-intensive and require a stable debt and capital structure—something the Debtor cannot achieve without resolution of the judgment.

Appeal Strategy

• The Debtor believes the Colorado Court committed reversible error prior to, during, and after trial, and intends to prosecute an appeal of the jury's verdict and associated orders.
  • Notably, the Debtor's insurance policy covers the cost of trial and appellate counsel, meaning the appeal will not deplete estate resources.

Chapter 11 Filing and Path Forward

• With the standstill agreement expiring and the Plaintiffs' aggressive collection efforts threatening to force the immediate cessation of operations—including the risk that a writ of garnishment served on the Lender could trigger an account sweep, leaving no funds for the Park to operate—the Debtor filed a voluntary petition under Chapter 11 on February 9, 2026 to stabilize its business.
  • Execution on the judgment would destroy the Debtor's going-concern value to the detriment of all creditors, including the Plaintiffs themselves, and would threaten more than 100 jobs in the Debtor's small community.
  • The Debtor anticipates filing a plan of reorganization aimed at stabilizing operations, addressing its obligations to the Lender, the Plaintiffs, and other unsecured creditors, controlling costs, and preserving the Debtor's going-concern value for the benefit of all stakeholders.

Cash Collateral

• On the Petition Date, the Debtor filed a motion seeking authority to use cash collateral, which may be subject to liens held by the Lender:
  • The Park's revenue is derived roughly in equal thirds from daily admission fees, attraction and cave tour sales, and ancillary income (food, beverage, retail, and parking). Without access to cash collateral, the Debtor would be unable to fund operations, service secured debt, pay employees, or cover administrative expenses of the Chapter 11 case.
  • A 13-week operating budget has been prepared reflecting the Debtor's best estimates of revenues and expenses, accounting for weather variability and seasonal tourism patterns in the Glenwood Springs area. The Lender has consented to the use of cash collateral subject to the terms of an interim order providing replacement liens and other adequate protection.
  • Certain budgeted expenditures flow through nondebtor entities sharing common equity holders with the Debtor—including a commercial property insurance policy covering the Park alongside neighboring properties and a shared services agreement for IT, marketing, and human resources with Iron Mountain Hot Springs—each structured to reduce overall costs, with the Debtor paying only its proportionate share.