Current and former club members will review the sale proposal, which would sell the Charleston, S.C., club to investors for $7.4 million in cash. If approved, members would recover less than half of what they’re owed in order to bring the club out of bankruptcy.
The plan to sell The Golf Club at Briar’s Creek in Charleston, S.C., out of bankruptcy faces a crucial test: a vote from some of the club’s members, The Wall Street Journal reported.
In a court order signed Monday, Judge John Waites of the U.S. Bankruptcy Court in Charleston, authorized lawyers for Briar’s Creek to send the course’s sale proposal to current and former club members who are expecting to recover less than half of $13 million in owed refunds, WSJ reported.
The proposal would sell the club to investors for $7.4 million in cash. Under the plan, investors—led by Houston Texans football team owner Bob McNair—would take over the private, 18-hole course, WSJ reported.
Judge Waites promised to look over the voting results from members and other creditors at a May 13 bankruptcy confirmation hearing, WSJ reported.
C&RB reported on the club’s bankruptcy filing in February (“The GC at Briar’s Creek Files for Bankruptcy, Faces Sale“).
The course, which employs about 50 people, filed for Chapter 11 bankruptcy protection on February 9, saying it hasn’t been able to persuade more than a handful of people to build homes on its lots. The community, spread over more than 900 acres, has only eight developed housing lots, according to court documents. The club, which has about 210 members, also saw its membership shrink during the economic recession, WSJ reported.
“Given the already high price point of membership…further increases in dues and fees would encourage more member resignations,” the club’s lawyers said in court papers.
The club was founded by McNair, General Electric Co. Chief Executive Jeffrey Immelt and more than a dozen other people. The club initially kept a low profile, marking its entrance by only a small wooden sign emblazoned with the symbol of a bird. But as the club struggled to increase members, it hired a consultant and placed advertisements in magazines and on highway billboards, WSJ reported.
The club took in $2.6 million in revenue in 2013 and $4.1 million in 2014, according to court papers. But revenue from membership fees, dues, user fees, food and beverage sales and pro shop sales “have not been high enough to sustain its business,” the club’s lawyers said in court papers.
Money from the club’s sale would pay some of the club’s debts, including a $2.9 million loan owed to Southcoast Community Bank, WSJ reported.
Aside from McNair, the proposed buyers include, Edward L. Myrick Sr. and John D. Carifa, both of whom also currently own a piece of the club. As part of the deal, Myrick would forgive a roughly $3.9 million loan he had extended to the club, WSJ reported.
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