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This Article: Evening Herald, April 3, 1992, at pg. 1

Valley of Lakes RICO Class Action against PNCBANK, et al.
ripped edge: exhibits

Says Cedrone:

Resort will regroup and rehire

"In most cases Chapter 11 is an effective tool for businesses who simply need the time to revitalize their finances they can meet their debts." - Atty. Ronald Pellish ...president of the Schuylkill County Bar Association

Herald writer

SHEPPTON - In an effort to continue operations while seeking alternate financing, CBG Ltd., which owns and operates Valley of Lakes and Eagle Rock Resort near here, has filed for protection under federal Chapter 11 regulations, a move that will allow for reorganization, as well as other sources of financing, according to Frank Cedrone, CBG managing general partner.

The community-resort normally employs from 200-350 people, many of them from Schuylkill County. "If you include the contractors, that figure may be as high as 500," Cedrone told the Evening Herald in a...

With the Chapter 11 action, Cedrone said, the complex staff has been trimmed to about 75, with 150-175 temporarily laid off. He said plans are to call the employees back when reorganization is accomplished.

THE CHAPTER 11 FILING requires that the resort trim operations down to the barest minimum while seeking the necessary financing. Cedrone said, "We poured every nickel and dime back into the ground (into the development). Then we ran into a cash-flow problem. We operated mostly on a short-term cash basis, which is the most costly way of doing business."

Because of that, Cedrone continued, CBG reached the limit and found it needed the temporary relief Chapter 11 provides, to allow time to seek additional financing. "It is not bankruptcy," Cedrone said. "Our assets exceed our liabilities."

ACCORDING TO ATTY. Ronald Pellish, president of the Schuylkill County Bar Association, Chapter 11 allows for reorganization through the bankruptcy courts when business has a temporary problem meeting financial obligations. It provides temporary relief from creditors while affording the business the opportunity to manage through a difficult financial time in an effort to resolve a poor cash flow situation.

It is possible that creditors or the court would find a proposed plan unacceptable and force the business into absolute bankruptcy, either voluntarily or unvoluntarily, Pettish said, adding, "In most cases Chapter 11 is an effective tool for businesses who simply need the time to revitalize their finances they can meet their debts."

WHEN A BUSINESS has filed under Chapter 11, that action immediateiy prohibits creditors from taking any action or dunning the business until a court decision is made, Atty. Pellish explained.

Cedrone expects approval on the CBG proposal sometime in April; then laid-off workers will be called back, he told the Evening Herald.

Once the financing is in place, CBG Ltd. has numerous projects in mind. The golf course and office building, now about two-thirds finished, will be completed, In addition, Cedrone said, there are plans for a hotel and convention center, as well as a motel.

The convention center will be a "four seasons community" because of golf, tennis and skiing. Cedrone said the plans include an arts and entertainment facility, paved and over one full acre, which will be similar to the Robin Hood Dell in Philadelphia, an ice skating arena, a dance floor with collapsible seating, a shopping center that would be available to the general public.

TOWN-HOUSES, TIME shares and condominiums are also slated, he continued. He spoke of the entire community becoming computerized and eventually including fiber-optics so residents can send and receive images through existing cable wires.

"Assuming everything is finished by the end of April, we'll get started again, file our registrations and start selling," said Cidrone. Joe Robel of Sheppton, a welder at the resort when asked about the...

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

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