Part of the restructuring includes a management agreement under which Columbia Hills personnel will continue to run the club.
Both sides in a foreclosure action against Columbia Hills Country Club, Columbia Station, Ohio, expressed optimism that the legal proceeding will eventually result in a healthier business whose ownership will eventually rest in the hands of the club, reports The Chronicle-Telegram.
Dan Weinhardt, president, called the foreclosure filing in Lorain County Common Pleas Court a “friendly” action taken by Stancorp Mortgage Investors, an Oregon-based company that lent $2 million to the 196-acre private country club in December 2009.
Operating since the 1920s, the club acquired the loan for improvements to the facility’s swimming pool, 18-hole golf course and driving range. But the weak economy prevented the club from making nearly $2 million in payments. Columbia Hills was declared in default on the loan in mid-February, according to the foreclosure filing.
“Our membership, which takes in golf (only) members as well as those with total memberships, dropped 35 to 40 percent over the past 2½ years,” Weinhardt said. “The economy and decrease in membership essentially forced us into a foreclosure and restructuring our financing. We were fully aware that a foreclosure was coming. It was anticipated and expected as a necessary step to put a restructuring plan in place.”
The country club has been working with Stancorp over the past year to restructure the business’s debt. Part of the restructuring includes a management agreement under which Columbia Hills personnel will continue to run the club.
Stancorp was the principal lender to the country club. Keybank in Cleveland was a secondary party in the financial arrangements. When Keybank was unable to come to terms with Stancorp over the country club’s future, a “friendly” foreclosure was required to obtain clear title to the business, according to attorney Robert Ellis.
Weinhardt noted that all of the club’s vendors, ranging from food suppliers to companies supplying materials for the golf course, are being paid.
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