A court in Charleston, SC, has cleared the way for the McConnell Group to purchase The Reserve at Litchfield Beach for $1, plus settlement of the golf club’s debts. Meanwhile, in Richmond, VA, another bankruptcy court may soon determine the fate of the formerly high-end Federal Club, which is now open to the public.
The Charleston judge, according to the Triangle Business Journal, approved The Reserve’s reorganization plan that gives the club to McConnell for $1 plus assumption of the club’s more than $500,000 in debt. Last year, club members voted overwhelmingly to sell to McConnell, a software millionaire who owns five other golf courses in North Carolina, but former members sued for recovery of a larger percentage of their initiation fees, a feature of membership included in the club’s bylaws. The judges ruling seemed to imply that the bankruptcy filing wiped away the equity status of the former members. McConnell, who was looking for another golf club near the beach for the use of his current and future members, does not offer equity memberships.
The sale of The Reserve is expected to close within 30 days.
Meanwhile, according to the online Richmond BizSense, time is running out for the owners of the Federal Club, who owe an area bank $8 million. The club, which cost about $9 million to build a few years ago, probably won’t fetch a third of that at auction in the next few weeks. A group of current members has indicated it will bid around $2 for the property, and they just might get it if no other bidders emerge. Members might have to pony up a reported $13,000 each to secure the club. Their notion is to keep the course publicly accessible until such time as it recoups enough members to return to private status. That could be a long wait.
Perhaps someone should have called John McConnell a couple of years ago.
