With a last-minute investor still elusive, a foreclosure auction sale set for Feb. 26 for the debt-ridden Strawberry Park in Preston, Conn., appears to be going ahead, the Norwich Bulletin reported.
Lawyers for campground owner Hyman Biber met behind closed doors Thursday (Jan. 20) in federal bankruptcy court in Hartford to hash out a mutual agreement with one of the park’s biggest creditors, Strawberry Funding Associates.
When they emerged, many of the motions and countermotions threatening to delay the foreclosure sale were withdrawn without explanation, leaving Judge Albert S. Dabrowski with little to say.
“The foreclosure goes forward, and everybody goes back to their neutral corner,” Mark Stern, attorney for Strawberry Funding Associates, said after the proceedings.
Biber’s attorney, Carl Gulliver, did not rule out a “white knight.”
“It’s several weeks away still, and I think it’s possible one of the several interested parties might come forward to take some productive steps,” Gulliver said.
Strawberry Park and its associated companies remain millions in debt, including a court judgment of $3.4 million to Strawberry Funding Associates and another $8 million for a defaulted loan to TD Bank.
Creditors allege Biber was continuously borrowing money to pay off old debts. Presently, Elite Resorts, a Florida-based RV management company, is running the campground.
Despite the impending sale, Biber remained confident.
“I started 37 years ago with absolutely nothing and built one of the best parks in the country,” he said. “I’m not ready to say goodbye.”
Biber opened the park off Pierce Road in 1974, continuously expanding the number of sites and activities.
There are now more than 500 sites on the 160-acre property, with 189 owned by individuals as part of a cooperative. In 2006 and 2007, sites were selling for an average of $95,000, Biber said.
He also claims the park, which caters to RVs, had its best year in 2009, grossing nearly $3.7 million from campsite rentals, RV rentals and store sales. The growth may have had a downside. In recent court filings, Biber reports debt springing from major capital costs, including $1.2 million for a new septic system and more than $1 million for electrical system upgrades.
Strawberry Park campground owner Hyman Biber and his creditors have reached an agreement in federal bankruptcy court that gives Biber until Dec. 20 to fight or delay a court-ordered foreclosure sale of the Preston, Conn., property, attorneys for both sides said Monday (Dec. 6), the Norwich Bulletin reported.
The foreclosure auction sale is still set for Feb. 26 even as Biber, who filed Chapter 11 bankruptcy because of mounting debt, looks to “reorganize his affairs and those of the campground,” his attorney, Carl T. Gulliver, said.
While Gulliver said Biber’s ultimate goal is to retain ownership of the successful campground and RV park, attorney Mark Stern said that will not happen without a last-minute “white knight” or investor coming to the rescue.
Stern represents Preston Strawberry Associates of Norwalk, which claims it is due $3.4 million from a defaulted loan.
Stern said Monday’s agreement was an effort to ensure Biber does not try to delay the foreclosure sale with last-minute bankruptcy filings on behalf of the several different companies related to the campground.
“If he files for Chapter 11, he must do it before Dec. 20. We’ve eliminated his ability to file at the last minute,” Stern said.
On Dec. 20, Stern said the case, by agreement, converts from a Chapter 11 to a Chapter 7 bankruptcy, which does not allow for reorganization.
The campground was already a subject of a more than $8 million court judgment in favor of TD Bank. A court-appointed manager of the campground, James P. Tucciarone, reported Biber was regularly overdrawing bank accounts and had submitted a $13 million letter of commitment from Hard Rock Holdings, an investor who appears to be fictional, court records show.
“Mr. Biber admitted that he regularly had the company issue and deliver checks for which funds were not currently available and then tried to either earn or borrow the funds to make the good,” Tucciarone wrote.
Stern said Biber continued to borrow money to pay off old debts.
“He’s been borrowing money to keep it going … telling people he’s going to pay, he’s going to pay,” Stern said. “Everybody wanted to believe what he’s saying is true. Everybody wanted to believe Bernie Madoff …”
Presently, Elite Resorts, a Florida-based company, is running the campground. Stern said he expects the foreclosure sale to happen in February, and “hopefully we’ll have a sale and a new owner.”
With the Strawberry Park Resort Campground in Preston, Conn., scheduled for a foreclosure sale in February, a Superior Court judge has ordered a Florida resorts management company to take over operations at the popular 160-acre property, theday.com, New London, reported.
The campground is also the subject of Chapter 11 bankruptcy proceedings in federal court, where its operator, Hyman Biber, is seeking to restructure debts owed to more than 160 creditors.
Strawberry Park is more than $7 million in debt to TD Bank, which holds a mortgage on the property, and owes more than $3.4 million to Preston Strawberry Funding Associates, a group of investors.
The resort, appraised at amounts varying from $10 million to $42 million, owes at least $20 million, according to court documents and Mark Stern, attorney for PSFA.
Strawberry Park RV Resort Inc., the operator of the 37-year-old campground, and Strawberry Farms LLC, which holds title to 360 co-op units on the property, are two of the defendants in the 2009 lawsuit filed by TD Bank. In September, Superior Court Judge James J. Devine ordered a Feb. 26 sale of the property by foreclosure. The court has awarded the bank, based in Portland, Maine, a judgment of more than $8 million.
On Thursday, at a hearing in bankruptcy court in Hartford, the bank and PSFA will seek relief from the bankruptcy court's automatic stay on action sought by creditors so that the foreclosure can proceed.
TD Bank attorney Scott DeLaura said the bank is seeking relief in order to "recover the judgment from the guarantor, Mr.Biber, if necessary."
Important to tourism
The campground remains open and operating with Elite Resorts, a management company from Salt Springs, Fla., in charge.
"Strawberry Park is one of the most important campground areas in eastern Connecticut," said Edward Dombroskas, executive director of the Eastern Regional Tourism District. "We certainly hope that whatever the issues are, they are resolved quickly and amicably so vacationers and people looking for a place to camp will be able to enjoy the facilities."
Biber, who is allowed on the property only with written permission from Elite Resorts, is seeking financing for next season's camping and music festivals.
"My intention is to work through (restructuring) for the best interest of all the parties involved," he said.
The TD Bank lawsuit originally sought a strict foreclosure in which it asked for title to the property, eviction of tenants and the awarding of interest, attorney's fees and damages. Defendants include Strawberry Park Resort Campground Inc.; Strawberry Park RV Resort Inc.; Volin LLC; and Strawberry Farms LLC. Biber is listed in court documents as the agent for service for the first two entities and a principal for the third.
There are also hundreds of thousands of dollars in claims by other banks, real estate and water and sewer taxes owed to the town of Preston, and tax liens due to the U.S. Department of the Treasury, the complaint charges.
Asked whether the bank would bid on the property in February, DeLaura said only, "It is not TD Bank's intention to detrimentally interfere with the continued operation of the park. It's a great asset to the community."
PSFA is seeking to convert the current Chapter 11 bankruptcy case to Chapter 7. That motion will also be considered Thursday. But Biber's attorney in the bankruptcy proceedings, Carl T. Gulliver, said he will argue against that.
"Chapter 11 is for the purpose of reorganizing a person's financial or business affairs," Gulliver said. "In this case, Mr. Biber is a shareholder of the entities that make up the business and he is seeking, and has been for some time, new financing to carry the business."
Stern, the PSFA attorney, said determining the value of the property is "still an issue."
"There are a bunch of pieces of land and a bunch of different creditors that have different positions regarding each piece," he said. "It's hard to tell at the end of this who's going to get what. The idea is for everything to get sold, and out of the pot of money that comes from the sale, people will make claims on that."