CBG hopes to escape foreclosure

Valley of Lakes and Eagle Rock Resorts is hoping it can avoid foreclosure as the firms' bankruptcy trial looms in federal court, Wilkes- Barre.

The court docket lists the case set for next Tuesday, but a lawyer representing the firms said Thursday he hasn't been notified that the trial will start.

VOL and Eagle Rock, trading as CBG Limited, is hoping to fend off their major creditor, First Eastern Bank, which has notified CBG that it will decide Monday on what course of action it wants to take.

"We haven't received a notice for a trial set for Tuesday or any other day," said attorney Peter J. Hoegen Jr. of Wilkes-Barre. "At this point, (CBG) is still trying to arrange subsitutte financing to be able to replace the existing debt owed to First Eastern Bank."

The firm is scheduled to argue its Chapter 11 protection claim in the bankruptcy court. Foreclosure, though, would nullify those proceedings.

"If First Eastern Bank is forced to in effect foreclose an its debt, nobody will get anything but First Eastern Bank, and of course even First Eastern Bank doesn't want that to happen," Hoegen said. "It's certainly possible, and they're in the position that they can do that now if they can't wait any longer."

If the case does come to trial, at issue will be to what extent the businesses, which trade under the name of CBG Limited, can structure their debt while reorganizing. Hundreds of claims have been made against the firms, which operate on a development that spans four m unicipalities in Luzeme and Schuylkill counties.

The firm has sought additional financing so it can continue to work on projects like a 260-unit housing development, as well as a top-level golf course designed by golf legend Arnold Palmer.

First Eastern Bank, as successor to Peoples First National Bank and Trust Co., is the primary lender involved for CBG, while a New York bank was supposed to provid the interim financing that would allow Valley of Lakes to continue operating.

The entire VOL/Eagle Rock operation had employed more than 150 people, and seasonal, part-time employment nearly doubled that figures.

However, since the bankruptcy filing, the organization has had to restructure, and has been filing monthly reports on its financial progress.