Golf Community Reviews

Text Size
Tuesday, April 17, 2012

Cliffs bankruptcy bid process coming to end

Written by 
Rate this article
(0 votes)

        If you were contemplating a bid for the bankrupt Cliffs Communities, your time has come and gone. Term sheets, which outline the details of an offer, were due on Friday, and qualified bidders were to be identified by yesterday, according to the schedule set by the bankruptcy court in Greenville, SC. Saturday is the deadline for more definitive documents to be submitted by bidders, including a membership plan; those docs will determine if the bidders are “qualified.” If more than one qualified bidder emerges, an auction will be held within a few days. On April 28, the successful bidder –- if an auction is held -- will be notified.

        Observers close to The Cliffs believe that the consortium of the Carlile Group, Arendale Holdings and Urbana will wind up with the prize. Penny and Steve Carlile are the possessors of deep pockets as well as property at The Cliffs; Arendale is a subsidiary of the Jacksonville, FL-based Stokes Group, a development company; and Urbana owns a large bit of the

Jim Anthony's lawsuit against Urbana could make the bankruptcy process messy at The Cliffs.

undeveloped dirt across the communities, courtesy of a deal the company did with financially strapped Cliffs founder Jim Anthony. A lawsuit alleging fraud that Anthony filed against Urbana is still pending and could potentially make a mess of things. Unless Anthony is out for blood, the betting here is that case will be settled before the successful bidders begin to execute their plan.

        One other potential messy detail is that any successful bidder must negotiate a settlement with the Cliffs residents who loaned Jim Anthony $64 million to complete construction of promised amenities, including the Gary Player golf course at the community known as Mountain Park. The Carlile group is already negotiating with the group of note holders; however those negotiations turn out, one thing is certain: The terms for the note holders will be nowhere near as generous as Anthony offered (including a seven-year, 12% return on their $100,000 increments). Given that Anthony was able to return only around $7 million (in one annual payment), the note holders may be content with any arrangement that is close to reasonable. However, the bankruptcy court appears to have the last word on how secured debt (the note holders) as well as unsecured (e.g. membership deposits to non-note holders as well) is repaid.

        According to one Cliffs member, a schism between the note holder and non-note holder groups is probably exaggerated.

        “Many non-note holders do not think the note holders need to simply suck it up [the Anthony loan] as a bad investment,” he told us. “There is recognition…that the note holders gave the clubs more time to keep the lights on.”

Read 4971 times Last modified on Friday, 27 September 2013 11:29
Submit to DeliciousSubmit to DiggSubmit to FacebookSubmit to Google PlusSubmit to StumbleuponSubmit to TechnoratiSubmit to TwitterSubmit to LinkedIn
Larry Gavrich

This blog was conceived and is published by me, Larry Gavrich, a former corporate communications executive who founded HomeOnTheCourse, LLC, in 2005.  Our firm advises baby boomers and others seeking a lifestyle in which golf is a major component.  My wife Connie and I own a home in Connecticut (not on a golf course) and a condo at Pawleys Plantation in Pawleys Island, SC, on a Jack Nicklaus layout.  We began our search for our home on the course more than 15 years ago, and the challenges of the search inspired me to research golf communities and write objective reviews of them.