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With $3.4 million in equity in the Timberwolf condominiums in Soldotna, owner Randy Kaer is not walking away from the project.

An article in the Peninsula Clarion on Friday said a notice of default has been filed and the condos are to be auctioned off at the Anchorage courthouse May 29, but Kaer said that is not going to happen.

"We'll file (Chapter 11) reorganization next week, we'll sell our units and pay the bills," Kaer said.

Due to incorrect information provided to the Clarion, the owner of Timberwolf Resort Condominiums was misidentified. Michael and Michelle Beals sold the property to Kaer in December 2006.

"Part of the stipulation was that I retained my home here on the (Kenai) River," Mike Beals said Friday.

Beals said the project is only in foreclosure because of bank policy.

"These units will never be auctioned off," he said. "It's a bank policy decision.

"It is a very viable project," Beals said.

Kaer said First National Bank Alaska "just wants their money back first."

"It's true I owe them $4 million," he said. "The property is worth over $8 million."

The large, two-story condominium buildings are on the former site of Beals' Timberwolf Lodge on property between the Sterling Highway and the river in the heart of Soldotna's business district.

Kaer said the bank approved a $4.7 million loan for the project, but then reneged.

"The bank refused to take $150,000 on each unit as (the condo sales transactions) closed," he said. "We had an inter-creditor agreement.

"Then the banks says, 'No, we want all the money,'" Kaer said. "The bank's not going to take it back."

Kaer said he began taking reservations from people wanting to purchase the condos "before I put a shovel in the ground."

Currently he has reservations on 17 of the 27 units that are for sale.

To get First National Bank to fund the balance of the project, Kaer said he had to record the first phase of the project and have his interest current. He sold one unit up front to pay the interest.

"Then they would lend the money," Kaer said. "Last December the bank said, 'No.'

"What you have is a bank that's being a bully. We have no intention of letting the project go back," he said.

All that remains to be done to complete the buildings is some interior flooring, an outside deck and some exterior log trim work.

"We're geared up to get back in and finish up by May," Kaer said. "We can be sold out of that project in a couple of months ... by the end of June."

Kaer said he will file the Chapter 11 reorganization plan in Anchorage this week showing the court "a clear plan" of what he owes and how he will pay his creditors.

"I would say, 'The developer has no plan to pull out of the project,'" he said. "I've never cheated anybody in my life."

Kaer said the Soldotna project is only one of several projects he has ongoing.

"If I had gone to other banks in Anchorage, I would have been out of this project already," he said.

Phil Hermanek can be reached at phillip.hermanek@peninsulaclarion.com.