Last month, all of the entities were merged into one--City Crossing 1 LLC--as Plise attempted to secure an equity partner that could help refinance the debt. The merger also minimized administrative costs such as franchise taxes and the cost of maintaining corporate formalities, and better reflected the fact that City Crossing is an integrated, master-planned development. The move did not affect any of the lenders' rights, according to court documents.

In explaining the predicament, the City Crossing bankruptcy filing states that short-term loans were a reliable way to finance development projects prior to the onset of the mortgage crisis. In essence, short-term loans could be refinanced on a yearly basis, which permitted the developer to tap into the equity in the underlying real estate and obtain favorable interest rates, according to the filing. In the current environment, the developer needs to replace its short-term financing with longer-term loans that will permit it to complete the project without seeking further financing.

"Mr. Plise has the financial wherewithal to make a substantial contribution to the Debtors reorganization, which will be essential to a successful reorganization," states the filing. "The Debtor will use the breathing space afforded it by the Bankruptcy Code to negotiate with the lenders to obtain [longer term financing] on a go forward basis."

In addition to Community Bank, creditors include First National Bank ($48.5 million), Alpers LP and the Eloit A. Alper Revocable Trust ($37.4 million), Aspen Financial ($20.2 million), Silver State Bank ($13.6 million), First National Capital ($11.8 million) and Clayton Mortgage ($10.2 million).