ASHLAND, Ky. - A U.S. Bankruptcy Court will take the first step Monday towards resolving the financial mess left in the wake of the Tri-State Mega Festival and Fair.

The first-year festival was originally planned as a five-day event June 4-8 in Ironton. The fair was shut down a day early after poor attendance and heavy rains left organizers with no money to pay many of the performers and musical acts.

The Tri-State Mega Festival Corporation filed for Chapter 7 bankruptcy in July.

Originally scheduled Aug. 18 but postponed, a creditor's hearing will be at 1 p.m. Monday at the U.S. Courthouse and Federal Building in Ashland, Ky.

Judge William S. Howard will hear the case.

Typically,

creditors' hearings are informal meetings that allow creditors listed in the bankruptcy petition to ask to be excluded from the ruling, said William R. Palmer, attorney for the corporation and president Rick Clark.

The corporation's bankruptcy petition listed assets of $2,921 and debts totaling $220,628.

However, the total may actually be higher because seven of the 33 creditors who are still owed money reported an unknown amount of debt.

Under Chapter 7 rules, the corporation would be released of its debts, but would be required to hand over the $2,921 worth of property claimed. The bankruptcy filing will delay lawsuits seeking to collect on the corporation's debts.

The Ironton Police Department and the Lawrence County Sheriff's Office are two of the creditors listed as unknowns. These departments reported that they are owed $4,820.

Rodney Wright of R & R Tent Rental in Wheelersburg was another creditor named in the bankruptcy petition.

He is listed as being owed $8,584.89 but said it may be closer to $10,000.

Wright said he would like to attend Monday but probably will not make it because that would just mean he would lose more money by not working.

"I just don't see me getting any money," he said. "There is no money to get. so I would just be wasting more time and money."

He was paid $2,500 but said he is now afraid that even that may be in jeopardy. Wright said his attorney told him that his debt is a non-secured and he could be asked to pay it back.

"They will have a hard time getting that money back," he said. "They will have to force me to pay it."

No creditors attended the first hearing. A continuance was granted because Palmer, did not bring a signed bankruptcy petition and other necessary documents that he did not think were needed.

At the first hearing, Palmer said he expects to tie up loose ends at this meeting and expects a discharge of the debts to be issued within 45 days.

MacKay Marketing & Entertainment, of Bridgewater, Mass., filed a lawsuit in Lawrence County Common Pleas Court on June 23 in Lawrence County Common Pleas Court, seeking $106,295 in damages, as well as a jury trial for the case.

In addition to the Tri-State Mega Festival and Fair Corp., the suit named the board of directors, Rick Clark and Gary Stevens of 1131 Terry St., Raceland, Ky., and Casey Kerns of 7464 County Road 15, Chesapeake.

The case is pending action until the bankruptcy is resolved.