First Eastern to assist Valley of Lakes owner

First Eastern Bank and C.B.G. Limited, owner of the Valley of Lakes and Eagle Rock Resort, entered into an agreement which was approved by Judge Harry J. Thomas in federal bakruptcy court on Thursday.

Under the terms of the agreement, C.B.G. Limited will continue to operate and maintain the community with operations, income and expenditures being monitored by a management group selected by First Eastern BanK.

C.B.G. has already contracted with the management group, MLA Associates Inc., to help operate and maintain the development.

The cooperating agreement stipulates that First Fastem Bank will aid in meeting shortfalls in operating expenses, within certain guidelines.

This assistance will allow C.B.G. to continue its efforts to re-finance its operations through one or more of a variety of sources currently involved in negotiations with C.B.G. These sources include lenders, investors and joint venture prospects.

"This agreement is significant for thee very important reasons," Frank M. Cedrone, managing general partner of C.B.G., stated. "First it allows for continued operations, maintenance and security of the developanmcent without inconveniences being experienced by our property owners. Second, it gives C.B.G. the breathing time necessary to complete a properly executed full funding of its operations leading to an emergence from its Chapter 11 status. Third, First Eastern Bank, recognizing the enormous impact a successful Valley of Lakes and Eagle Rock Resort has had in the past and can have in the future, once again demonstrates its commitment to the people and economy of this region as a leading independent bank."

Another secured lender, J.L. Wolgin, also consented to the agreement which gives C.B.G. a maximum time limit of seven months to complete its new financing.

Cedrone said the agreement allows all operations at the resort to continue - including maintenance, security, and administration. The only activity the agreement doesn't allow is further development at the resort.

That will come when another funding source is found. Cedrone said a dozen lenders, investors and joint venture prospects are vying to become involved in the development.

"A total of 36 executive summaries were sent out to potential funding sources," Cedrone said. "We are talking with about a dozen now."

The Eagle Rock Lodge, which was closed for the month of August, reopened and is still open for weddings and banquets. Nighttime entertainment has mostly been suspended, except for this weekend.

Financial problems at the development began July 10 when the federal bankruptcy court ordered CBG to tighten its belt. Several employees, including security personnel, were laid off as a result. The cutback in security forced one gate along Route 924 to be closed, but the closure lasted only a day. A residents' committee assisted CBG to man and reopen the gate the following day.

That group, which named itself "Friends of the Valley," then assisted CBG with keeping the gate open, as well as some maintenance tasks. Cedrone praised the group for its work.

"We got enormous support from those properly owners," Cedrone said. "They were magnificent. They fully staffed the gate, and helped out during the month."

Once the additional funding source is in place, Cedrone said CBG will be in a position to resume developing the resort. A championship golf course and other amenities were under construction when the financial problems set in.