This Article: Hazleton Standard-Speaker, March 31, 1992, at pg. 1
Valley of Lakes and Eagle Rock Resorts files for bankruptcy
By JEFF COX
Valley of Lakes and Eagle Rock Resorts, citing a declining economy that prevented the development from getting the financing it needed, filed for Chapter 11 bankruptcy protection Monday.
According to a statement released by VOL developer Frank Cedrone, the firm has struggled for the past two years to get financing it needed to continue projects begun at the development, which spans four municipalities in Luzerne and Schuylkill counties.
Trouble at the resort has been rumored for some time, despite ambitious projects like the golf course designed by Arnold Palmer and a townhouse development plan for 260 units.
"We have every confidence that this will be the start of a full-scale resumption of operations," Cedrone said. "If there's anyplace in the world I'd want to develop a community, this would be it."
Cedrone, vho represents CBG Limited, the firm in charge of the VOL and Eagle Rock operations, said normal business will resume within the next two weeks or so.
Until then, CBG will be working with the New York institution it found to provide financing. Peoples First National Bank and Trust Co. of Hazleton will continue to be the primary lender, but the New York bank will handle interim financing, according to attomey Peter J. Hoegen Jr., who represents CBG in the matter.
"We'll seek additional financing to alleviate (CBG's) chronic cash-flow shortage," Hoegen said. "They're not insolvent, but they have no cash."
Getting the interim financing will allow Valley of Lakes to continue its development. Cedrone said continuing the townhouse project will be a priority, but added that work on the golf course probably will resume as soon as weather permits.
Meanwhile, getting the Chapter 11 protection will allow the company relief from its creditors while it can reorganize, which will include a refinancing. The interim financing is expected to run to several million dollars.
"It's unfortuntae we have to go out of our own region to seek this funding," Cedrone said. "This gives us a breather. We can return to profit-making status. We'll be able to resume development of our properties."
Because of the financing problems, the development has had to refrain from marketing its properties, he said. Thirty-one homes are under construction now, Cedrone added, and work on them will resume soon. He expects sales to resume a month or so after the Chapter 11 filing is completed.
He complained that "severe restraints" placed on lending institutions by the federal govemment as well as the large-scale banking failures prevented the company from getting the financing it needed on time.
"Operating under a severely restricted cash flow for such a long period of time prevented the company from meetings it obligations on a timely basis and necessitated this action," Cedrone said.
CBG owns 61 parcels in nearby Vacation Village, but allegedly is delinquent for dues on the lots that have to paid to the Cove Village Association. Cedrone said the dues issue is being challenged in Court.
Meanwhile, Cedrone said work is progressing well on the golf course, which will be championship caliber.
He said the first nine holes of the course are cleared, and culde-sacs, sandtraps and water hazards are all cut.
"What remains there is irrigation, the covering of the top soil, countouring and final seeding," he said. "That will resume, I would imagine, the minute the weather gets warm."
The entire VOL/Eagle Rock operation employs more than 150 people, with seasonal, part-time employment nearly doubling that figure. It spans 4,000 acres in Hazle, East Union, North Union, and Black Creek townships.