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.”