PA Fire Company Files Bankruptcy

A volunteer fire company in Pennsylvania filed bankruptcy last week after a bank started foreclosure proceedings against it in December.

The Conneaut Lake Volunteer Fire Department filed for protection under Chapter 11 on January 12, 2016, seeking relief from the Mercer County State Bank. Conneaut Lake VFD reportedly owes the bank approximately $1.6 million on three loans.

Last December when the bank started its foreclosure action, fire company president George Zeljak told reporters: “Our mortgage is about $12,000 to $14,000 a month, our fuel bill is about $5,000 a month and our electric bill is about $5,000 month. That’s about $22,000 a month. We could cover it in the past, but the business hasn’t been there.” The business Zeljak is referring to is the operation of a social club that includes a restaurant and liquor license that is adjacent to its firehouse. He also assured the public that it would not effect fire department operations.

Chapter 11 bankruptcy is also referred to as “reorganization”. It allows a business immediate relief from creditors (ie. stops the foreclosure proceedings and other collection efforts) and provides a way to restructure its debts under the supervision of a federal bankruptcy judge.

Here is more on the story.

About Curt Varone

Curt Varone has over 40 years of fire service experience and 30 as a practicing attorney licensed in both Rhode Island and Maine. His background includes 29 years as a career firefighter in Providence (retiring as a Deputy Assistant Chief), as well as volunteer and paid on call experience. He is the author of two books: Legal Considerations for Fire and Emergency Services, (2006, 2nd ed. 2011, 3rd ed. 2014) and Fire Officer's Legal Handbook (2007), and is a contributing editor for Firehouse Magazine writing the Fire Law column.

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