MACKINAC CITY, Mich., May 12 (UPI) -- A private equity firm filed a lawsuit seeking to have a company that operates ferries to Michigan's Mackinac Island placed under court receivership.
Walden Ventures contended in federal court that Arnold Transit had defaulted on a $3 million loan and its 11 boats, which carry passengers to and from the tourist destination, should be seized.
The 41-page complaint also alleges Arnold sold some prime waterfront property on the island and also took out a $40 million mortgage without informing California-based Walden.
"Because the debtors aren't making required loan payments and are selling collateral without Walden's knowledge, Walden is at risk of not being repaid," the complaint said.
Arnold is the oldest ferry line serving Mackinac Island, which is only reachable by boat and does not allow cars on its streets.
Jim Wynn, the principal owner of Arnold, told the Detroit Free Press the funds from the property sale were safely in an escrow account and dismissed the lawsuit as the result of bickering within the ranks of Walden's financial sources. Wynn added the dispute would not affect ferry service to the island as the summer tourism season picks up steam.