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Valley of Lakes RICO Class Action against PNCBANK, et al.
ripped edge: attorney general PA


	IN THE UNITED STATES BANKRUPTCY COURT
       FOR THE MIDDLE-DISTRICT OF PENNSYLVANIA

IN RE				:	CHAPTER 11
				:
C.B.G. LIMITED			:	CASE NOS. 5-92-00525
TRACHELE, INC.			:	5-92-00615
VALLEY UTILITIES CO., INC.	:	5-92-00617
THE ONEIDA WATERS CO.,		:	5-92-00619
CHEZ-RAEL, INC.			:	5-92-00620
				:
DEBTORS-IN-POSSESSION		:



	OBJECTION TO AMENDED PLAN OF REORGANIZATION OF CREDITOR


	The Office of Attorney General, Bureau of Consumer 

Protection, has been granted the leave of the Court to appear and 

be heard on behalf of Consumers because said appearance is in the 

public interest as set forth in the Bankruptcy Rule 2018 (b) , 11 

U.S.C.A. This Order of the Court was entered and filed on August

31, 1994.

	The intervention of the Office of Attorney General, 

Bureau of Consumer Protection, was prompted by the receipt of 

several dozen formal complaints from residents and property

owners of Valley of Lakes.

	On October 31, 1994 the Office of Attorney General, 

Bureau of Consumer Protection, filed an objection to the


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Disclosure Statements of the Debtor and Creditor (PNC Bank,

N.A.).

	The Office of Attorney General believes that the 

unsecured interests of both complaining and silent residents and 

property owners will be adversely effected by the implementation 

of the Amended Plan of Reorganization now submitted to the Court 

by Creditor, PNC Bank, N.A.

	Therefore, the Office of the Attorney General of the 

Commonwealth of Pennsylvania, moves the Court as follows:


      I. OBJECTIONS TO CREDITORIS AMENDED PLAN OF REORGANIZATION

	1.  The Office of Attorney General, Bureau of Consumer 

Protection, moves this Court to refuse to approve the Amended 

Plan of Reorganization filed by PNC Bank, National Association, 

(hereinafter "Creditor") on or about November 29, 1994 on the 

grounds that: (a) Creditor's Plan does not adequately address 

the myriad of issues related to the health and safety of the 

residents of Valley of Lakes; (b) the plan could never be legally 

confirmed pursuant to 11 U.S.C.  1129; as is more particularly

detailed hereinafter.

	2.  Said Creditor's Amended Reorganization Plan seeks 

to liquidate the assets of the Debtors, while nonetheless

obtaining a discharge of the liabilities of the Debtors, pursuant


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to Chapter 11 of the bankruptcy laws.  Creditor's Amended 

Reorganization Plan proposes to have a trustee sell the assets of 

the Debtors, free and clear of all liens, and to permit the 

unsecured creditors to share in a fund of $500,000 "provided it 

receives the entirety of its distribution from the Free and Clear

Sale."

	3.  Said Creditor's Amended Plan of Reorganization does 

not contain sufficient information regarding measures to be taken 

and expenses to be incurred by the Trustee to safeguard the 

health and welfare of the residents of the Valley of Lakes 

Development during the implementation of the Amended 

Reorganization Plan.

	4.  Said Creditors Amended Plan of Reorganization does 

not account for all expenses to be incurred by the Trustee to 

maintain the Valley of Lakes Development to the benefit of 

resident and nonresident property owners during the 

reorganization period.

	5.  Said Creditor's Amended Plan of Reorganization does 

not include a requirement that, as a contingency of sale, any 

prospective purchaser or subsequent developer post a performance 

bond for the maintenance and completion of the infrastructure 

(e.g. water, sewer and roadways) of the Valley of Lakes 

Development.  Such a requirement is essential to ensure the


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integrity of the development and protect the residents and 

property owners from the financial shortcomings or caprice of a 

prospective purchaser or subsequent developer.

	6.  Said Creditor's Amended Plan of Reorganization is 

made for a questionable purpose.  Prior to the appointment of the 

Trustee, the only reason that the Debtor's continued to operate 

the Valley of Lakes Development is that the Creditor (PNC Bank, 

N.A.) had refused to exercise their right to foreclose.  As it 

admits, the creditor has already obtained relief from the 

automatic stay and can foreclose on the property.  Yet, it has 

refused to do so.  As a result, the property owners in the Valley 

of Lakes have been forced to live in a development that is 

grossly mismanaged by a "developer" which deprived many of them 

of their life savings, as a result of its mismanagement.  The 

only purpose in re-organizing the debtor pursuant to the 

creditor's plan would be to discharge the debtor from its 

liabilities.  It would be an abuse of the bankruptcy laws to 

discharge Debtors who have so abused their fiduciary duties, and 

have engaged in unfair and deceptive acts and practices, both 

during their Chapter 11 protection and prior to the filing of the 

petition.

	7.  Said Creditor's Amended Disclosure Plan embodies a

plan which is not viable because it is highly unlikely that any


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funds would be left after the Creditor receives the entirety of 

its distribution from the proposed Free and Clear Sale.

Consequently, the unsecured creditors would be receiving nothing 

from creditor's plan.




	WHEREFORE, the Office of Attorney General, Bureau of 

Consumer Protection, prays that (a) the Court refuse to confirm 

the Amended Plan of Reorganization of the creditor, PNC Bank, 

N.A. as filed; (b) the Court directs the Creditor to modify the 

Amended Plan of Reorganization in order to address the objections 

presented herein; and (c) provide such other relief as this Court 

deems just.


				/s/
				JAMES M. SYSKO
				ATTORNEY I.D. NO. 73759
				DEPUTY	ATTORNEY GENERAL
				OFFICE	OF ATTORNEY GENERAL
				BUREAU	OF CONSUMER PROTECTION
				214 SAMTERS BUILDING
				101 PENN AVENUE
				SCRANTON, PA 18503
				TELEPHONE: 717-963-4913

Valley of Lakes RICO Class Action against PNCBANK, et al.

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