A bankruptcy trustee is demanding that the Country Club at Otterkill surrender control of the Orange County golf course to help pay off more than $3 million in debts.
Trustee Marianne T. O’Toole also charged Otterkill with unjust enrichment, in a lawsuit filed on March 28 in U.S. Bankruptcy Court.
The owners of the Campbell Hall country club and of the real estate are using bankruptcy to stall a foreclosure, O’Toole argues, and she “is in the best position to administer the debtor’s estate in a prompt and orderly manner and to ensure that creditors are paid.”
The country club was founded in 1957, according to its website, and includes an events space for weddings and other celebrations.
J&K Real Estate Investment Group owns the real estate and leases it to Otterkill, according to court records. Joseph V. Betro, of Goshen, and Kenneth T. Lund, of Boca Raton, Florida, own both entities.
J&K originally filed for Chapter 11 bankruptcy protection in 2023, after TD Bank filed a foreclosure action. J&K failed to file monthly operating reports or pay court fees, according to O’Toole, and the court dismissed the case.
Six months later, in September 2024, J&K petitioned for Chapter 11 reorganization again. It declared $5.6 million in assets – consisting of the real estate – and $3.1 million in liabilities.
J&K owes $2 million to TD Bank on the mortgage, nearly $1.05 million to the U.S. Small Business Administration for a second mortgage, and $169,000 for local property taxes, according to O’Toole.
On Feb. 7, bankruptcy court converted the Chapter 11 reorganization case to Chapter 7 liquidation, and appointed O’Toole as the trustee to take control of the assets.
She has hired a real estate broker to market the property for sale.
O’Toole claims that the country club is “wrongfully in possession” of J&K’s property. She is asking the court to declare the lease null and void, and to order Otterkill country club to vacate the property and give her the keys.
