CBG bankruptcy hearing reset to July 21

A motion by a federal trustee to acquire the assets of CBG Limited now will be heard at 10 a.m. July 21 in U.S. Bankruptcy Court, Wilkes-Barre.

The hearing had been scheduled April 28, but was postponed "at the request of parties" in a court order filed May 2.

It is one of numerous delays that have been granted in various legal proceedings since CBG Limited, which owns the Valley of Lakes resort and housing development, filed for voluntary Chapter 11 protection March 30, 1992.

Six affiliated firms did likewise eight days later, and the court then consolidated the cases.

Chapter 11 protects a company from creditors while it attempts to refinance debts.

The U.S. trustee asked the court to revoke that protection last July 2, stating the debtors "have not filed acceptable plans of reorganization or disclosure statements ... and appear unable to rehabilitate their affairs."

The motion also says "there has been inexcusable delay that is prejudicial to the creditors in this case," and that CBG and afffliates have failed to pay quarterly fees to the court.

It asks that the cases be converted to Chapter 7, under which the trustee would take over the companies' assets and either sell them or assume control of their operations. Secured creditors would be paid first, and whatever is left would be divided among the unsecured creditors.

Attorney Peter J. Hoegen Jr., in response to the motion, says the debtors "believe and anticipate that they shall be able to successfully refinance their operation" and calls the trustee's basis for conversion to Chapter 7 "incorrect and insufficient."

Hoegen could not be reached for comment Monday.

The hearing on the U.S. trustee's motion initially was scheduled for Oct. 5.

In a separate order, dated April 8, the court removed Eagle Rock Ski Area and Ravens Run Equestrian Center from the joint arrangement and said those cases are to be considered separately.

The four remaining affiliated firms are Trachele Inc. Chez-Rael Inc., both identified as restaurant operations; Valley Utilities Co., which provides sewage treatment for the housing development, and the Oneida Water Co., which provides water service to the homes.

Valley of Lakes consists of 4,004 acres in Hazle, Black Creek, East Union and North Union townships.

The Luzerne County sheriff's office twice has postponed a sale of the property that would have satisfied a lawsuit brought against CBG Limited by First Eastern Bank.

The most recent delay was granted Dec. 10 - only hours before the scheduled sale - by First Eastern, which apparently was satisfied with CBG's efforts to refinance the reported $14 million it owes the bank.

It has not yet been rescheduled.