Delaware Sports Complex Files For Chapter 11 Bankruptcy

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    After accumulating $1.6 million in debt to 13 different creditors, the Delaware Sports Complex LLC has officially filed for Chapter 11 bankruptcy.

    The complex was intended to be a $13 million facility with 319 acres of land leased from Middletown. Even though significant progress had been made on its infrastructure, its owners still owe $195,000 to the Town of Middletown.

    “We don’t know what to do, we don’t know what our next steps are. We’ve got a bankruptcy lawyer looking into it,” Middletown Mayor Kenneth Branner told The News Journal, describing his first reaction as “total shock, then disappointment that it got to this point.”

    The IRS automatically classifies an LLC as a partnership or “disregarded entity,” depending on if there is one or more than one owner, and the complex has two owners: Brian Ellis, of Middletown, and Scott Lobdell, of Townsend. Ellis and Lobdell initiated the work done on the complex back in 2015.

    Two years later, however, only six fields are ready for use. One parking lot has also been started, but the progress was just moving too slowly to be sustainable.

    “We were led to believe the financing was there and everything was in place,” said Branner. “It was a shot in the gut when we heard. We were players and partners in the project and now that has come to a complete stop.”

    A typical bank loan borrower looking to take out a business loan has to be two years in business, have at least $250,000 of annual revenue, have good personal and business credit, and be cash flow positive, but those metrics are difficult to meet if the establishment hasn’t even been built yet. Still, Branner says the Town of Middletown had agreed to lease the land to the DSC for just one dollar a year. And for the past 18 months, DSC representatives have been meeting weekly with town officials to discuss progress.

    “They told us they were scheduling tournaments and were very adamant that things were going well,” Branner said. “But then about six months ago, we started getting reports of unpaid bills and we knew something wasn’t right.”

    The United States has 1,900 indoor ice hockey rinks and 500 outdoor ice hockey rinks, and sports complexes continue to be very popular. But without the proper funding, plans can quickly fall apart. Branner, however, says the town continues to express interest in a sports complex in the area, but it won’t happen until this bankruptcy case is settled.

    “We believe there will be interest when the land becomes available for further development,” he said.