PROVO – Amid legal difficulties, the future of operations and management of the Seven Peaks Water Resort in Provo is unclear.

In a statement released March 27, the Seven Peaks management team said pending legal proceedings may cause the water park to lose its affiliation with the 2018 Pass of All Passes, a promotion that allows Utahns to get seasonal passes to multiple resorts and entertainment venues, including Seven Peaks in Provo.

“As time grows near for the traditional opening of the Seven Peaks Water Park in Provo, the status of the affiliation of the water park with Seven Peaks for the 2018 season remains uncertain,” Seven Peaks management said in a statement.

Ownership of the park was transferred to another owner in 2016, the statement said, in a transaction that “retained Seven Peaks management within a leaseback agreement.”

“That transaction, however, has resulted in legal proceedings that are still pending,” the statement said. “If the outcome makes it possible to do so, the Seven Peaks management team would like to resume management of the property at the first available time.”

A lawsuit filed in 4th District Court on June 9, 2017, named Seven Peaks Water Park Provo and Zibalstar LC as defendants in a case against plaintiffs Courtside Condominiums LC and Park Provo LLC. According to the suit, Seven Peaks was served a three-day notice to pay rent or vacate after owing Courtside Condominiums about $293,000 for the six-month period of Jan. 15 through June 14, 2017.

While Seven Peaks typically opens in May, court documents filed on March 30 state that there are a number of uncompleted projects, such as the hiring of staff and the repair and maintenance of equipment, that make it unlikely the park will open by then.

“These projects normally start at the beginning of the year as it takes months to prepare the water park to be opened,” court appointed receiver Todd McKinnon said in the court document. “Because of the removal of certain equipment before the receiver took possession of the water park and the power being disconnected for nonpayment within a week of the receiver taking possession, there is more work that needs to be completed than there would otherwise need to be completed.”

“We are now at a point that it is probable that the water park will not open in May this year,” the court documents stated.

The court is set to hear oral arguments for the property lawsuit on April 24. In the March 27 statement, Seven Peaks management said it would not be commenting further on the case "until the present uncertainties are resolved."

On May 30, 2017, 10 days before the property suit was filed, a separate lawsuit was filed by several organizations including Seven Peaks Water Park Provo, Zibalstar LC, and Courtside Condominiums LC against a number of defendants, including Theodore Hansen, Low Cost Rentals LLC and Estrella Group LLC.

The legal complaint, filed in Utah’s 4th District Court, accused Hansen of 52 counts of misconduct, including constructive fraud, breach of contract, civil theft, civil conspiracy and gross negligence against multiple businesses, including Seven Peaks Water Resort in Provo.

The complaint alleged that Hansen, a Utah County businessman who was employed by Zamp HR Services at the time, "through a web of lies, fraud, self-dealing, mismanagement and refusal to make the plaintiffs’ mortgage and lease payments, the defendants have imperiled the plaintiffs’ fruits of the sales proceeds."

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The court documents said that Hansen and the Estrella Entities “engaged in a pattern of nepotism and other employee mismanagement that has cost all Seven Peaks Entities and Real Estate Entities to suffer damages.”

As an example, the court documents said it was discovered that leasing agent Ron Schollnick had been using company funds and employees to repair personal property. Schollnick was terminated in connection with the thefts, but Hansen and the Estrella Entities later rehired him, without him compensating for "his theft of labor, materials, supplies and services," the complaint alleged.

On multiple occasions, Hansen, who the lawsuit said has “no personal interest in the Seven Peaks Entities,” is alleged to have falsely held himself as a 50 percent owner of Seven Peaks Entities. In May 2017, Seven Peaks learned Hansen and the Estrella Entities had bounced two checks of about $54,000 and $36,000 that were intended to cover the May 19, 2017, payroll, according to the court documents.

In February 2017, Hansen allegedly borrowed $750,000 that was ostensibly meant for Seven Peaks renovations, but he ended up using the money for personal projects, the court documents said.

From March to May 2017, Hansen and the Estrella Entities allegedly had not made timely mortgage and lease payments on Seven Peaks Water Park in Provo, as well as Seven Peaks Fun Center in Lehi and Seven Peaks Water Park in Porter, Indiana.

“The defendants’ joint and several misconduct toward the plaintiff Seven Peaks Entities has caused them and continues to cause them damages and harm that could lead to their ruination,” the lawsuit states.

Seven Peaks Management did not mention Hansen or the lawsuit specifically in its March 27 statement.

The most recent update on the suit against Hansen came on March 27, when the plaintiffs asked for a motion to stay. The motion makes the future of the lawsuit uncertain.

KSL.com attempted to contact plaintiff attorney Jeremy Reutzel, who authored the motion to stay, to comment on the case. Reutzel could not be reached when the story was written.

Seven Peaks Water Park in Provo directed questions about the water park’s status to Cheryl Snapp Conner, a public relations consultant based in Provo.

"There is clearly much more that Seven Peaks management would like to say, and we look forward to telling that story as soon as possible," Cheryl Snapp Conner said in an email to KSL.com. "But to ensure that story is meaningful to the concerns you will have, we will wait to tell that story or to make further comments until the uncertainty about the operation of the Seven Peaks Provo facility for the 2018 season is resolved. It is our hope it will be resolved quickly."

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