In the latest chapter of a battle to control one of Deschutes County’s landmark resorts, the corporation that manages the Inn of the Seventh Mountain west of Bend has filed a petition to reorganize its finances under Chapter 11 of federal bankruptcy law.

But officers of Seventh Mountain Management Inc. (SMMI), the owner-controlled company that runs the so-called core areas such as the convention center, restaurant and swimming pool at the Inn, say Monday’s filing in U.S. Bankruptcy Court in Portland shouldn’t affect guests or owners of condominiums.

”This will be business as usual,” said David Barbour, SMMI’s president and general manager. ”The reorganization was done so we could continue on in business. We haven’t heard from any of our vendors who said they won’t service us.”

Chapter 11 allows for a court-supervised reorganization of debtor companies which no longer can pay creditors or expect future liabilities that they cannot hope to pay. The filing means that creditors generally cannot file or continue suits for repayment, debts are frozen and a debtor’s day-to-day operations continue.

The Inn of the Seventh Mountain, which opened in 1974 and is one of the largest resort condominium projects in the western United States, for the past few months has been embroiled in an increasingly bitter battle over control of not only the core areas, but also the 262 individual condo units owned by nearly 200 persons.

Starting last September, a limited liability corporation called Innspired began buying condo units at the Inn and now owns 30 units. The group is owned by Eugene businessman Douglas Cochrane, with the financial backing of Pape Group in Eugene. Pape Group is headed by former Mount Bachelor, Inc., President Randy Pape.

Earlier this year, Innspired announced its intent to renovate its condos and encourage other owners to do the same. It also purchased a note of approximately $4 million from one of SMMI’s creditors, Moana Kauai Corp. of San Francisco, that SMMI signed when it purchased the core areas from Moana Kauai in 1993.

SMMI is in arrears on the note, and Innspired this spring filed a foreclosure action against SMMI. Negotiations among SMMI, Innspired and the Inn’s Association of Unit Owners over the future of the core areas, as well as who will control rental of units, broke down and led to Monday’s bankruptcy filing, Barbour said.

But Cochrane said the bankruptcy filing will only delay Innspired’s eventual foreclosure of the core areas.

”We were hoping to get control of the place before the summer to make it a decent (revenue) summer for the owners, but at this point I think we’re kissing that off,” Cochrane said. ”We haven’t decided what to do with the core areas, but we will make them nicer.”

Barbour said the intent of the reorganization is to continue making payroll for employees, and pay all accounts to vendors in full.