South Carolina Country Club Owner Files for Bankruptcy Protection
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South Carolina Country Club Owner Files for Bankruptcy Protection

March 8, 2012


The Cliffs Club & Hospitality Group Inc., which peddled in the construction of golf courses and luxury homes in South Carolina, is headed to bankruptcy court to remedy its debts, according to a report from The Greenville News.

The bankruptcy filing surprised many observers in South Carolina, as the company was part of developer Jim Anthony’s rapidly growing real estate holdings, and had recently been lauded as a South Carolina business success story.

The primary creditor listed in Cliffs Club’s Chapter 11 bankruptcy filing was ClubCo, a subsidiary of Cliffs Club that owns and operates several golf courses and other amenities in various developments owned by Anthony.

It’s not uncommon for the primary creditor in a corporate bankruptcy filing to be a subsidiary of the filer, but it does reveal some interesting internal tensions between Cliffs Club and it operating partners.

In addition to ClubCo, the Cliffs Club bankruptcy petition listed several other companies to which it owed money. These creditors included several golf and country clubs which may also be forced to file separate bankruptcies in a South Carolina federal court.

Collectively, these debtors themselves have "thousands of creditors" and are facing more than $100 million in debt, which is further complicated by the companies’ "large and complicated" capital structures. In other words, big bucks are involved.

Claims by creditor against the golf courses and country clubs include several individual claims topping the $230,000 mark, and the largest tipping the financial scales at $800,000.

Predictably, the recession took a heavy toll on country clubs across the country, as wealthy consumers curtailed their spending on luxury goods. The Cliffs Club saw plummeting revenues in the last few years, which, coupled with its rapid expansion, ultimately crippled its ability to meet its obligations to its numerous creditors.

Under Chapter 11 bankruptcy, the company will likely be allowed to restructure its finances so it can keep operating during and after its bankruptcy filing.

Chapter 11, thus, is somewhat similar to Chapter 13 bankruptcy, which often allows filers to restructure their own debts so they can keep working and stay in their current home during and after bankruptcy.

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