Dave Kramber admits he made mistakes as owner of Izatys - both in management of the bankrupt resort and in his dealings with the community.

"I was young and aggressive," he said. "I learned a lot, and I'll do things different next time."

Kramber is hoping there is a next time. He says he's close to the kind of deal many in the community think Izatys needs to be successful. "We have investors who want to keep it going," he said. "We need everyone to come on board and support us."

If all goes according to plan, an investor will purchase the clubhouse building, convert it into a hotel and spa, and build additional townhomes. Kramber will continue to operate the golf courses and marina.

Commerce Bank agreed on Wednesday, June 18, to give Kramber until the end of August to work something out.

In exchange, Kramber said, he agreed to a shorter foreclosure period if the deal falls through - a two month right of redemption period instead of the usual six months.

"If it doesn't happen this time, we hand them the keys," he said.

In the meantime, Kramber has a new partner, Roger Jorgenson, who put up $400,000 to maintain and run part of the resort this summer.

One golf course is already open, and Kramber said the hotel should be open by Friday, June 27. He plans to put a small restaurant and bar in the lower level of the Links Lodge.

The clubhouse and pool will not be reopened this season.

Kramber is hoping the community will support the business enough to allow him to finish a deal with developers. "I live in the community, and I still think this (Izatys) can be a great place," he said. "I hope we can all come together and support it."

'We took our licks'

Kramber earned enough money from a lawn care business and other investments to buy Izatys in 2002.

He knows now that he and his partners were in over their heads. "We didn't know anything about running a resort," he said. "We took our licks."

It became apparent to him that Izatys lacked beds. A 28-room hotel was not enough, and the townhomes were too expensive for Izatys' clientele. Izatys would sometimes turn down 100 requests per night, Kramber said.

He and his partners came up with a plan to build new townhomes, but Mille Lacs County demanded an environmental impact study. As negotiations with the county wore on, the owners' money ran out, and dreams of development turned into hopes for a sale.

"The operation sucked our pockets dry," Kramber said. "I kept putting money in when I knew I wouldn't get anything out of it." He admits they "stepped on toes" in the process.  "We were just trying to survive until we got the development deal done."

He had an offer last spring for $9.1 million and another last fall for $8.7, but each was withdrawn. Another party had first right of refusal, and they had 120 days to make up their mind. They told Kramber they would decide on the 119th day. In the meantime, the offers were withdrawn.

Izatys filed bankruptcy in December of last year, which ended the right of first refusal. Kramber hoped that would result in a sale, but as the April 3 auction date approached, his confidence waned. The $2.8 million high bid was quickly rejected by Judge Nancy Dreher because it wasn't enough to pay off Izatys' loan from Commerce Bank, the main secured creditor.

Since then, Izatys and Commerce Bank have played a tennis match of motions and objections, responses, and affidavits.

The most recent came last week when the unsecured creditors committee sided with Izatys in objecting to the U.S. Trustee's motion to convert the case from Chapter 11 to Chapter 7. The change would have resulted in liquidation of the property, and in all likelihood, the unsecured creditors would have seen none of the proceeds.

Izatys also filed an objection to the U.S. Trustee, along with a declaration from Kramber. In his declaration, Kramber says the golf course, marina and Links Lodge can operate at a profit, but running the entire resort in its current form cannot be profitable.

In an 11th hour negotiation prior to the June 18 hearing on conversion of the case from Chapter 11 to Chapter 7, Izatys and Commerce Bank reached their deal. It was approved by attorneys for the unsecured creditors and townhome, timeshare and marina owners, and Judge Dreher decided to let Kramber's strategy play itself out.

She told the attorneys for Izatys and Commerce Bank to draft an order for her to sign.

The hearing was rescheduled to June 24, but attorney Michael Ridgway of the U.S. Trustee's Office said it would probably be rescheduled again, if the order is prepared by then.

Ridgway said he still has the option of stepping in any time and requesting another hearing. "I'm not going away," he said. "My motion is there to preserve my right to go forward in the event that something happens to get this thing derailed."

If the June 24 hearing is postponed, Ridgway said, the next important date is July 17, when a hearing on Izatys' disclosure statement will be held. Prior to that, all parties will have a chance to file comments on the disclosure statement.

Once that happens, another hearing on Izatys' reorganization plan will be held, probably in the middle of August, Ridgway said.