Campground's State Confounds Residents/Investors
Mounting debt, bankruptcy and an impending foreclosure auction led to the court-ordered appointment of new management last week at Strawberry Park RV Park in Preston, Conn.
The future of the 160-acre campground on Pierce Road remains unclear as president Hyman Biber and several of the companies linked to the property remain a target for a growing number of creditors, the Norwich Bulletin reported.
The complex series of court actions has left owners at the campground perplexed and concerned about the foreclosure auction scheduled for Feb. 26. Peggy and Tom Zielinski, a retired couple who spend six months at Strawberry Park and the rest of the year in Florida, say they are among 189 owners with lingering questions.
The couple sold their home and invested their nest egg with Biber to buy a site at Strawberry Park in 2001. The park is a mix of campsites and RV sites and hosts festivals throughout the camping season.
‘What happens to us?’
“It’s like a little community in itself. We love it,” Tom Zielinski said. “If someone comes in and buys the property, what happens to us? We don’t know yet.”
A preliminary list of 20 creditors filed by Biber in federal bankruptcy court reveals a total of more than $15 million of debt, although some creditors put the number at more than $20 million. The receiver, with expertise running RV parks, was appointed as part of the pending litigation filed by TB Bank, which started foreclosure action against the property in 2009, claiming Biber owes nearly $8 million from two loans.
In addition to millions owed to TD Bank, a group of investors known as Preston Strawberry Funding Associates recently won a judgment in the amount of $3.4 million for default on a $2.5 million loan from Biber and his associated businesses of Volin LLC, Strawberry Farms LLC and Strawberry Park RV Resort Inc., records show.
By October, Biber had filed for Chapter 11 bankruptcy, asking for a stay of the state proceedings. Preston Strawberry Funding, meanwhile, has asked the court either to appoint a trustee or convert the case from a Chapter 11 to Chapter 7, essentially asking the court to relieve Biber of any financial handling of the property and to liquidate. A hearing is scheduled for later this month.
Back to normal
Attorney Carl T. Gulliver, who represents Biber in the federal bankruptcy proceedings, said most of the real estate is owned by other entities and not by Biber himself.
“Mr. Biber is seeking to reorganize by refinancing or bringing in new investors and hopes to be put back in a position of running the park once he’s able to resolve these financial difficulties,” Gulliver said. “Without some resolution to the financial situation, the receiver will run the (park) until the auction foreclosure sale.”
Attorney Mark Stern, who represents Preston Strawberry Funding, said creditors are trying to maintain the value in the property.
“There are a lot of money and jobs at stake,” Stern said. “The campground, I think, will survive under a different owner. This is the beginning of a very long process. The real victims are the people who lent this guy money, to kind of keep the spiral going. It’s going to be a mess. It’s a complicated situation, and there is a lot of money to unwind.”
TD Bank attorney Scott Delaura also said it was in the best interest of all parties to continue operations at the park.
“It’s not TD Bank’s intention to shut the park down,” Delaura said.
Court documents filed on behalf of Preston Strawberry Funding make a series of allegations, hinting that Biber has been less than forthcoming in his financial dealings.
Biber was “executing and delivering checks with no current ability to pay for such checks; was engaging in a check kiting scheme,” according to the Preston Strawberry Funding Associates’ motion in federal court.
Preston Strawberry Funding further alleges Biber was drafting checks from the RV companies’ accounts “for purposes other than for the operation of the property” to the point where the accounts were overdrawn.
It also alleges that Biber changed the name of the entity from Strawberry Park Resort LLC to Strawberry Resort LLC in 2009 and did not disclose it to lenders.
“For years we’ve been asking (Biber) to be forthcoming about what was going on,” Peggy Zielinski said. “There were always financial questions. No matter what happens, we were told we own what we own. This is our life savings. It’s a wonderful campground. We love it here. Everyone who owns loves this place. How (Biber) got into the problem he got into, we don’t know, but I know his heart is in this place.”
Preston First Selectman Bob Congdon shared the Zielinskis’ optimism.
“It’s a thriving campground. I think it will remain that way. (Biber) and his family have been in business in town for generations. I would be very surprised if it no longer operates as a campground.”
Biber could not be reached Friday for comment for this report.
The campground has received the highest ratings from Woodall’s — five stars for facilities and recreation–the only Connecticut campground to achieve this honor for each of the past three years