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This Article: Times Leader, Wilkes-Barre, PA, May 12, 1996 at pg. 4

ripped edge: news articles

Trustee for Valley of Lakes plans to seek OK for auction

Times Leader Staff Writer

HAZLE TWP. - The trustee for the Valley of Lakes bankruptcy said he will file a petition with the U.S. Bankruptcy Court this week seeking approval to auction the assets of the troubled resort community.

Attorney John Martin said the auction is necessary because no one has come forward to buy the property since Valley of Lakes developer Frank Cedrone, of CBG Limited, filed bankruptcy in March 1992.

Martin said he received "serious offers" from three developers, but none have committed to buying the property.

He said he does not foresee a problem with getting approval for the petition from U.S. Bankruptcy Court Judge John Thomas.

Martin, in an interview Thursday, anticipated he would file the petition early this week. He said the judge will have 60 days to issue his ruling. If the petition is approved, the auction would take place within 90 days of the judge's ruling, he said.

Martin said he believes the petition must be approved becuase the community does not have the money to continue operating.

As trustee, Martin controls the community's assets and collects maintenance fees to run the resort.

He gave a brief interview about his plans but would not offer many details of the bankruptcy.

Ray Dongelewicz, a resident of the resort, said Martin has probably run out of maintenance money because many residents have stopped paying their monthly maintenance fees.

Dongelewicz said Martin has sent letters stating that residents must pay fees of $65 per month. Dongelewicz said residents have always been required to pay maintenance fees, but many stopped because they have not seen improvements in conditions at the resort.

Dongelewicz would not offer an opinion on Martin's plan to auction the land, saying he needs more information.

The resort has a long-running history of problems including unfulfilled promises by the developer and deteriorating roads.

The conditions prompted a lawsuit against Cedrone and PNC Bank that was filed in U.S. District Court by several property owners. They allege racketeering by Cedrone and the bank, in part through numerous schemes, including an attempt to conceal Cedrone's insolvency.