Cliffs meeting clarifies new ownership

        The Cliffs Communities board and its new owners met with Cliffs members Wednesday evening to explain the decision to award the financially strapped development to Steve and Penny Carlile, according to a member who attended the meeting. The Carliles intend to plow most of any money they make from The Cliffs back into the golf communities’ amenities and operations.

        The board indicated that the Carliles, who have no experience in planned development management, were the only bidders of five who agreed to step aside if a better bid than theirs came along. The bidding process was opened after Cliffs founder Jim Anthony defaulted on a $64 million loan from his club members. If someone steps forward with terms the Cliffs board believes

offer a better opportunity for the communities, then the agreement with the Carliles clears the way for acceptance. In that case, the Carliles would receive a $1 million break-up fee, less than half of what the other bidders were willing to accept, according to the Cliffs board. Other aspects of the Carliles’ proposal that swayed the board were their plan to pay back note holders on a faster schedule than other bidders; the most favorable terms in providing “debtor in possession” financing” (which provides for the Carliles to have the “senior” debt, or first lien, on the property until the bankruptcy court renders a final decision); and, most generously, the Carliles’ willingness to plow most of the cash flow they generate back into the clubs. Other bidders anticipated retaining a large percentage of any profits in coming years.

        On the issue of a continuing role for Cliffs founder Jim Anthony, the Carliles indicated they have had no business dealings with Anthony other than their purchase of lots at Walnut Cove and High Mountain, site of the unfinished Tiger Woods golf course, and they have not worked with him on their proposal to take over the communities. They reserved the right to call Anthony in as a consultant at their own personal cost, but that he will have neither a management nor ownership position under their ownership.

        The Carliles’ primary home is in Marshall, TX, where the family fortune was made in oil and gas and where most of their family currently resides. They have made a big leap from owning a lot on a Carolina mountain to buying a huge development that spans 10 locations and thousands of acres. With a reported 20 bidders circling the bankrupt Reynolds Plantation in Georgia and the Carliles' apparently generous terms, it is easy to envision additional bids ahead for the Cliffs Communities.