From the Ford’s Colony Country Club Creditors’ Committee :
On November 17, 2010, the United States Bankruptcy Court conducted a hearing on:
- Prudential Industrial Properties, LLC (Prudential’s) Motion for Relief from Stay. This Motion sought permission of the Court to allow Prudential to foreclose on the golf course;
- The Debtors’ Motion to extend the period of time during which only the Debtor could file a plan of reorganization; and
- The Debtors’ Motion to create various classes of creditors for purposes of proposing a plan for reorganization.
As noted previously, the Debtor, Prudential and the Creditors’ Committee have spent a considerable amount of time since mediation on October 28 attempting to reach an agreement for a consensual plan of reorganization. Unfortunately, the parties were not able to reach an agreement.
Prior to the November 17 hearing, to facilitate agreement, the Committee had offered to waive its primary request of the Debtor concerning governance. This request was a seat on the Debtor’s board of directors appointed by the Country Club Membership Association (CCMA) to provide the members.an oversight role. This offer was conditioned on the Debtor reaching a business deal with Prudential that would allow the case to move forward and a firm agreement on adequate financial transparency in the future.
On November 16, The Committee was informed by the Debtor’s counsel that the Debtor and Prudential could not reach an agreement. Furthermore, the Debtor and the Committee have yet to agree on what is required to provide meaningful financial transparency. The Committee will continue to seek an agreement with the Debtor on this issue going forward.
In addition, the Committee, which had opposed Prudential’s request to foreclose, reached an agreement with Prudential under which Prudential would not immediately foreclose on the golf course in the unlikely event that it prevailed on the Motion for Relief from Stay. This understanding essentially provided the Committee up to 4 months to work out either an agreement with the parties or propose to the Court an acceptable plan of reorganization in order to avoid having the golf course put up for sale. To obtain Prudential’s agreement to hold off on any foreclosure, the Committee agreed to waive its objection to Relief from Stay and take a neutral position, leaving the matter to be addressed between the Debtor and Prudential in Court on November 17.
Because the Debtor was shouldering the defense to the Motion in any event, the Committee’s agreement with Prudential insured that both members and creditors were not harmed regardless of how the Court ruled. In short, it kept the hearings from becoming an "all or nothing" prospect for the creditors and the Club.
At the end of the hearing on November 17, the Court ruled against Prudential on the Motion for Relief from Stay. However, the Court noted that the members, residents and the creditors needed some assurance that this process would move toward prompt resolution. To that end, the Court also denied the Debtor’s request for an extension of the exclusive period during which only it could file a plan of reorganization. The Court decided not to rule on the classification request until a plan is produced.
The Court reemphasized the importance of resolving this case and particularly recognized the membership as critical to financial viability.
In summary, Ford’s Colony Country Club remains in operation and the Debtor can continue it efforts to produce an effective reorganization plan. The Creditors Committee can work with the Debtor and Prudential collectively or separately to produce a Plan for the Court’s consideration. The next Court date is December 13 to hear arguments on the value of Prudential’s claim against the Debtor’s assets. On January 13 the Court will hear arguments on the consolidation of the entities (Ford’s Colony Country Club and Marsh Hawk Golf Club). A status report on the development of a comprehensive Plan of Reorganization and any alternative Plans is scheduled for January 18.
The Committee’s overall objective remains that the Club be financially viable, well run and continue to be an important asset for members and residents. In this way, the unsecured creditors would also have the possibility for some return. The Creditors Committee continues to believe adequate financial transparency is a vital component of an acceptable Plan.
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Filed under: Ford's Colony | Tagged: fords colony country club bankruptcy |
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