Some Decisions Made in Ford's Colony Club Bankruptcy

Tuesday, November 23, 2010

Last week, a bankruptcy court judge decided to allow Ford’s Colony Country Club to proceed with its Chapter 11 filing, but it also ruled that more people could have input in the reorganization progress.

 

Ford’s Colony Country Club has been in mediation talks with lender Prudential for the past several weeks but couldn’t reach consensus, according to an email from the Creditor’s Committee (a forum for members who are due advances from the club). Prudential had made a motion to stop the bankruptcy proceedings, which failed in court last Wednesday. The judge also denied the Club’s request to deny other parties a chance to file a plan for reorganization, which means Prudential or the Creditor’s Committee could offer their own plans if they so choose.

At the hearing, “the Court reemphasized the importance of resolving this case and particularly recognized the membership as critical to financial viability,” according to the Committee’s email that was sent out Monday.

The Club will continue to operate until a plan is set, and the Committee can work with the Club and Prudential collectively or separately to come up with a reorganization plan to present to the judge, who will receive a status report on the progress 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,” according to the email. “In this the way, the unsecured creditors would also have the possibility for some return.”

The Committee and the Club’s current owners haven’t yet agreed on what is required to provide “meaningful” financial transparency, which the Committee is pressing for as the case progresses. “The Creditors Committee continues to believe adequate financial transparency is a vital component of an acceptable Plan,” the email concludes.

The committee consists of an attorney paid for through Club operating funds, two active members and two resigned members.

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 Ford's Colony Country Club and Marsh Hawk Golf Club.