Five golf courses in the Charlotte, N.C., area will go into foreclosure, followed by a bankruptcy filing following a year of lawsuits from lenders, employee wage disputes, and more than $1.2 million of federal tax liens. The owner expects the properties to remain open throughout the process, and Traditional Golf Properties has been managing the courses since November 18.
Five Charlotte, N.C.-area golf courses are headed into foreclosure after a tumultuous year of unpaid tax bills, lawsuits from lenders, and complaints from employees about back wages, the Charlotte (N.C.) Observer reported.
Jeff Silverstein, owner of the Carolina Trail courses, said the foreclosure process will be followed by a bankruptcy filing. According to court records, the group’s debt includes more than $1.2 million worth of federal tax liens, the Observer reported.
“They’ll be part of the bankruptcy,” Silverstein said of the liens. He said the foreclosure and bankruptcy filings could come within a week. Silverstein declined to identify the lenders who will take possession of the courses, the Observer reported.
The Carolina Trail courses are Birkdale Golf Club, Highland Creek Golf Club, The Divide Golf Club, The Tradition Golf Club and Waterford Golf Club in Rock Hill. The Tradition Golf Club is owned by Mecklenburg County but is operated by Carolina Trail under a ground lease arrangement, the Observer reported.
Two other Carolina Trail courses, Skybrook and Charlotte Golf Links, were taken from Silverstein’s company and placed in receivership in August, after they failed to repay millions of dollars worth of loans. The courses remain open and are being operated by Virginia-based Billy Casper Golf Management. C&RB reported on those clubs at the time (“Skybrook Golf Club, Charlotte Golf Links Placed in Receivership”).
Silverstein expects the five remaining Carolina Trail courses to remain open during the foreclosure and bankruptcy process, the Observer reported.
“Everything will be status quo or better,” he said. But Silverstein said he didn’t know what will happen to current memberships. “That will be determined by the new owners.”
Some golfers paid thousands of dollars to purchase lifetime memberships to the Carolina Trail courses. Scott Chapin said he paid $18,000 in late 2007 for a membership. Chapin, who is retired, said he golfs with a group of friends four or more times a week, the Observer reported.
“I’m a lifetime member, but I don’t really know what that means at this point,” said Chapin. He said he had received a letter from the receiver now administering the Skybrook and Charlotte Golf Links courses that said his membership would not be canceled, but that the price and associated policies would be adjusted, the Observer reported.
A separate company has been brought in to manage and run the five remaining Carolina Trail golf courses. Traditional Golf Properties has been managing the courses since November 18, while Silverstein’s company retains ownership, the Observer reported.
Silverstein acknowledged there are wage issues at his courses, the Observer reported. “There’s a disagreement,” Silverstein said. “There’s a legal discussion going on involving the payroll.”
The N.C. Department of Labor’s Wage and Hour Bureau has received one complaint each about unpaid wages from employees at Birkdale and Highland Creek golf clubs since August, and two complaints from The Divide, a spokesman said.
Paul Mauk, the President of Traditional Golf, said the clubs are current on payroll since his company took over their management, the Observer reported.
“All employee obligations since becoming involved with the clubs commencing November 18 have been paid timely,” Mauk said. “I cannot comment on the period prior to my involvement. We are excited to be involved and look to help bring stability to the situation.”
Silverstein, who formerly owned or managed dozens of golf courses in several states through his company IRI Golf, first ran into high-profile trouble locally in January when the U.S. Department of Labor announced that Carolina Trail had agreed to pay $758,465 worth of back wages to employees following an investigation, the Observer reported.
In July, Birkdale Golf Club was briefly closed down by the state over $64,990 worth of unpaid taxes. The course also owed $128,879 to the Internal Revenue Service. Several of the clubs were sued by lenders demanding repayment, or homeowner associations trying to get the company to improve its upkeep of golf courses, the Observer reported.
The Birkdale Homeowners Association is still pursuing a legal claim against the course for allegedly failing to maintain its facilities and falling into disrepair. Court records also show a $39,574 lien against Highland Creek Golf Club filed in November by the Highland Creek Community Association, the Observer reported.
Silverstein expects the Carolina Trail golf courses to sell quickly once the foreclosure and bankruptcy processes are formally initiated, the Observer reported.
“They should be sold pretty quickly,” Silverstein said. “Within 60 or so days.”