Northern Lights’ encore performance in bankruptcy court was brief, with a judge dismissing its Chapter 11 reorganization case Thursday for the second time in less than three months.
U.S. Bankruptcy Court Judge Robert Littlefield refused to give the Clifton Park nightclub more time to prepare a reorganization plan and disclosure statement, which were both due Oct. 31. Northern Lights had asked to extend that deadline to Jan. 31 so it can work out a lease agreement for another space at the North Country Commons shopping center.
Unlike the first time Littlefield booted the nightclub because of an accounting snafu with a creditor in September, Thursday’s dismissal came at the behest of the U.S. trustee. The trustee objected to Northern Lights’ extension request because it allegedly failed to submit its operating reports for September and October and timely pay trustee fees.
But Northern Lights owner J. Kip Finck said similar confusion over a payment he made caused Thursday’s dismissal. He expects the judge to again take Northern Lights back into bankruptcy protection.
“We’re going back in. We have a great season coming up,” Finck said.
In September, Littlefield dismissed the case after a creditor, the American Society of Composers, Authors and Publishers, said the nightclub failed to pay a quarterly licensing fee. But a day later, ASCAP’s attorney notified the court that the New York performing arts licensing group had actually received that payment and Littlefield vacated his dismissal order.
That initial dismissal was just one of the many events that complicated Northern Lights reorganization efforts. In June, a malfunctioning beer cooler sparked a fire that caused the nightclub to close for a month.
Around the same time, its lease at the Route 146 shopping center expired. Landlord Whitney Lane Holdings granted a lease extension, but the nightclub wants to move to another plaza space with a new term and a less expensive lease.
Due to the fire and lease problems, Northern Lights lacks the cash flow to book all of its own shows and is increasingly leaning on promoters for assistance, according to court documents. That dependence has reduced the nightclub’s income to rent and food and beverage sales.
”It is necessary that the issues with the landlord be resolved before the debtor can file a meaning plan and disclosure statement. The additional time requested will allow that to happen,” Northern Lights attorney Richard Weiskopf said in an Oct. 31 motion to the court.