Ford’s Colony Country Club, which filed for Chapter 11 bankruptcy protection in March, has begun mediation discussions with lender Prudential at the court’s request.
Country Club General Manager Steve Dreybus sent a letter this week updating members on the bankruptcy proceedings that have led to the current mediation with Prudential. Over the last month, several important hearings at Norfolk Bankruptcy Court have resulted in a motion by Prudential to suspend the bankruptcy proceedings, a motion to determine unsecured creditor class members, and a motion to separate the Marsh Hawke Golf Club and Ford’s Colony Golf Club into two cases.
Suspending the process “could have been disastrous for members with short term cost reduction efforts taking precedence over maintaining member loyalties and satisfaction,” Dreybus wrote, and separating the cases would mean “the members (which are the majority of the unsecured creditors) would effectively have no voice in the reorganization plan involving Prudential.
“We believe the members are critical to the Club’s ability to be successful and should be handled as part of the same proceeding as Prudential.”
He said eventually the unsecured creditor class categories would need to be established, organizing members into premier, platinum, active and resigned members.
The Judge said the process was “becoming too complicated and mired in legal proceedings,” according to Dreybus, and he had therefore asked the parties to consider mediation, which they agreed to.
“The Judge mentioned that mediation … was typically successful and was somewhat hopeful that an agreement could be worked out in this case,” Dreybus wrote. “As mentioned in past updates, the Club and Prudential were close to an agreement at the outset of this process.”
November 4 is the date the parties will report back to the court with the results of the mediation, and the club will need to proceed with a formal plan of reorganization afterwards that creditors will vote on.
Dreybus concluded, “we believe that our financial and operational plan is sound, viable, and in the best long term interest of our membership and the property owners living in Ford’s Colony. It is important that our members stay involved and work through the Creditor’s Committee to ensure that your voices are heard and your interests are protected.
“Since we announced the filing of Chapter 11 protection in March, our members have continued to show strong support for this Club. Thank you so much for this loyalty. We understand that we must continue to earn this and certainly do not take your support for granted.
“I simply believe that our members and this community have been very well served by current ownership and would ask for your continued support during this reorganization phase.”
Ford’s Colony developer Realtec has hit numerous financial stumbling blocks over the past year or more, losing 36 parcels in a trustee’s sale in August after failing to pay its debt to Citizens and Farmers Bank. Realtec has also had financial difficulty with its Ford’s Colony community in Rocky Mount, North Carolina, when foreclosure led to the closing and reopening of that community’s golf course at the beginning of this year and an unrelated default on a $7.2 million loan to BB&T the year previous, according to the Rocky Mount Telegram.