Yuma Fun Factory subject of bankruptcy, foreclosure
The lights are on but no one is home at the Yuma Fun Factory with the closed family entertainment center embroiled in a legal tangle involving bankruptcy and foreclosure.
In both cases, AEA Federal Credit Union is the lender, with millions of dollars at stake.
Yuma Fun Factory, 4446 E. County 10th St., opened in late May 2009. It closed its doors in April of this year.
The same month, Yuma Fun Factory LLC filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court District of Arizona. Yuma Fun Factory LLC is the entity that owned the personal property at the entertainment center, such as the liquor license, furnishings, television sets and bumper boats.
According to bankruptcy court records, Yuma Fun Factory LLC listed its assets as worth $441,850. It also listed that it owes the credit union $4.7 million.
Another entity, Desert Capital Partners, owns the entertainment center's real estate, including the land and building, said Jim Smith, Yuma Fun Factory's bankruptcy trustee.
In legal documents, Dan Thelen is listed as the current owner of both entities.
Yuma Fun Factory's real estate is the subject of a trustee sale scheduled to take place on Sept. 23 at 10 a.m. on the steps of the Yuma County Courthouse.
The notice of trustee's sale for the property published in the Yuma Sun lists AEA as the beneficiary. The notice further states that the original principal balance was $592,125.
However, Smith said, the deed of trust states that the mortgage will secure not only the original balance but future loans for the property.
“It's unclear whether any additional amount is owed AEA on the real estate,” Smith said. “The original loan was one of multiple loans which totaled millions of dollars.”
As long as the real estate is not in bankruptcy, the trustee sale can proceed, Smith said, noting that Desert Capital Partners currently is not in bankruptcy.
“Most likely it will proceed,” he said. “Then AEA will own the land and building.”
But AEA also needs to take ownership of the personal property before the Yuma Fun Factory can be sold, he said.
In the meantime, Denise Sweet-McGregor, president and CEO of the credit union, said the property is being maintained at AEA's expense.
“We're trying to ensure it is kept clean and as attractive as we can,” she said. “That's to protect our collateral.”
Sweet-McGregor also said the credit union has been receiving phone calls from “many interested parties” about purchasing the entertainment center.
“But we can't start the bidding process,” she said. “At this time, the property isn't ready to be sold on the open market.”
Thelen is now working for a medical center in the state of Washington. He didn't return phone calls from the Yuma Sun seeking comment on the Yuma Fun Factory.
Thelen's home at 1412 W. Ridgeview Drive, also is in foreclosure and scheduled for a trustee sale Sept. 30. According to the notice of trustee sale published in the Yuma Sun, AEA is listed as the beneficiary with the original principal balance at $317,425.