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Reorganization Update Meeting April 19th
Creditors Committee
Answers to CCMA Questions Presentations from April 19th Meeting (Creditors' Committee, Affiniti) |
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Prudential's Final Plan |
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Affiniti's Ford's Colony Management Proposal |
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Debtor's Chapter 11 Filings |
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Prudential's Chapter 11 Filings |
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CCMA Objections to Plans (debtor's, Prudential's) |
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Creditors' Committee MOU |
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CCMA Position Paper |
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CCMA Member Benefits |
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Parcels Surrounding The Clubhouse |
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CCMA Chapter 11 - Messages |
CCMA MEMBERS MEETING UPDATE
It appears that we will have a very large number of members attending next Tuesday’s meeting with Prudential, Affiniti and the Creditors Committee.
We tried to secure the auditorium at the high school but unfortunately that was not available so we will stay in the pavilion. In order to provide a comfortable meeting environment we will be holding two meeting sessions. The first will start at 4 pm and end by 5:30 pm; the second will start at 6:30 pm and end at 8 pm.
In an effort to balance the attendance at each session we are requesting the following; members whose last names begin with A thru M should plan to attend the 4 pm session and members whose last names begin with N thru Z should plan to attend the evening session. We have left an hour open between the sessions for those members who still want to enjoy burger nite at the club either before or after your meeting session.
We apologize for any inconvenience this may cause, and ask for your cooperation in helping make these meetings informative for all of us.
Thank You,
CCMA BOD
All members and those with advanced payments are invited to a very important meeting at 4 pm on Tuesday, April 19th in the pavilion. Presentations will be made by Prudential, Affiniti Golf and the Unsecured Creditors Committee. Prudential and the Creditors Committee will provide an overview of the Reorganizational Plan and Affiniti Golf will provide an overview of who they are and share their approach to managing a country club. Information on Affiniti can be found on the CCMA website (Click here).
At the end of the presentations there will be a Question and Answer session.
It is expected that the meeting will be over by 6 pm, in plenty of time for members to still enjoy burger nite in the Members Grill or “All You Can Eat” in Harry’s.
Once again, thank you for all your support during this process and we hope to see you Tuesday 19th.
CCMA BOD
The Debtors, Prudential and the Official Unsecured Creditors Committee reached an agreement to bring the bankruptcy case to a close. A status hearing was held today and the agreement was presented to the Court. As part of the agreement, the Debtors are withdrawing their Chapter 11 Plan and Prudential and the Committee will move forward with their Plan. Prudential and the Committee will amend their Plan to reflect some of the financial agreements that were reached with the Debtors. The Court moved the confirmation hearing up to May 3, 2011. It is anticipated that the amended Chapter 11 Plan will be sent out next week. The court still requires a vote to be taken and we estimate that you will have 7 - 14 days to exercise your vote. Under the settlement agreement, new management under the direction of Prudential will be put in place on May 3, 2011.
Thank You
CCMA BOD
Today the court approved, with some minor changes, the Disclosure Statements from the Debtor and Prudential / Creditors Committee. This clears the way for the voting process to begin. The exact timeline for this process will be known within the next few days. The court also ruled that each plan will have it's own ballot, a third party Solicitation firm will be used to conduct the mailings and vote tabulations. In addition, the court ruled in favor of Prudential's position, which was supported by the CCMA's attorney, that "all" members should be allowed to vote. This means that all 900 members will have the opportunity to participate in deciding the future direction of our club. As more details on the voting process become available, we will let you know
Finally the court set May 18th as the date for the Confirmation Hearing.
Thank You,
CCMA Board
On Wednesday March 16 there was a Bankruptcy Court hearing regarding the Disclosure Statement filed by Prudential and the Unsecured Creditors Committee and the Disclosure Statement filed by Ford's Colony Country Club and Marsh Hawk Golf Club and various objections filed to each of the Disclosure Statements. The CCMA objected to items in both Disclosure Statements.
The objections that the CCMA filed were to address many of the issues that the Board believed, and many of you voiced, were unclear. The unsecured Creditors Committee, FCCC, and Prudential also filed objections. The Judge approved some objections, denied some and ruled that some should be argued at a reorganization plan confirmation hearing yet to be scheduled.
Each party also told the Court that there were modifications they intended to make. The Court ordered the parties to file amended Disclosure Statements with the Court by March 25. Objections to the amended submissions are due March 29 and a hearing has been set March 31. A confirmation hearing cannot take place until the Disclosure Statements are approved by the Court. Should the Judge approve the amended Disclosure Statements then he will set a date for a confirmation hearing. We know that this process is taking a long time.
Please be assured the CCMA is continuing to monitor and communicate member concerns to all of the parties in members' best interest. Let us take this opportunity to thank you for your support.
You may view the Disclosure Statements referred to above and Objections of all parties on the CCMA website at fc-ccma.org/
Sincerely,
CCMA Board of Directors
Dear Members,
As you are aware, during the last few weeks there has been a great deal of legal activity on the Chapter 11 case, all of which will hopefully bring us closer to a final resolution. The CCMA Board decided that it was necessary for us and our attorney to be present at the last three court sessions to see and hear firsthand what was transpiring. In addition, during the last session our attorney was able to address the court and express to the Judge the frustration that we all feel that this process is still not resolved.
The Judge has set February 28th as the due date for all Re-Organizational plans and March 16th as the next court date to review the plans and continue the request from Prudential for a stay. We plan to attend the session on March 16th and are prepared to review any Re-Organizational plan against the membership’s Position Paper which we published in January.
Last June we made an appeal for contributions to a Legal Fund. Over 400 members contributed $11,500. So far we have committed to spend over $10,000 and it is apparent that additional funds will be needed. Therefore, we are requesting that the members consider making an additional contribution of $25 per member.
Please deposit your check, made out to the CCMA, in the locked box in the computer room or mail the check to CCMA Treasurer, Henry Theloosen, 162 Waterton, Williamsburg, VA 23188.
Thank you for your continued support.
Frank McMorrow
Dan Desmond
Barry Golliday
Henry Theloosen
John Tinker
Craig Stambaugh
On February 1 and February 2, 2011, The United States Bankruptcy Court presided over the continued hearings on:
1. Prudential's Motion for Relief from Stay (through which Prudential sought leave of the Bankruptcy Court to foreclose); and
2. The Debtors' Motion for substantive consolidation (through which the Debtors sought to merge FCCC and Marsh Hawk Golf Club into one entity).
Though there were other matters on the Court's docket, these two were the most important.
Prudential and the Debtors each presented further evidence in support of their respective positions during the February 1st hearing. On February 2nd, the Court heard final arguments from each of the parties on the Motions.
After completion of the arguments, the Judge declared that he was ready to rule on the motions. The Judge prefaced his rulings with several observations. He recognized that the Debtor and Prudential are highly invested in the property. He also reemphasized that a viable Club is vital not just to the members, but to the community as a whole. He further expressed his regret that the parties had not been able to reach a consensual arrangement. Finally, the Judge noted his disappointment at the lack of progress in this case, and his belief that some resolution must be achieved before another season passes.
With regard to substantive consolidation, the Court explained that such a request was an extraordinary remedy, and that there had been no compelling evidence to support it. Therefore, the motion was denied.
With regard to the Motion for Relief from Stay, the Court likewise indicated that there was not sufficient evidence to justify granting that remedy at this point and agreed to allow the Debtors to proceed with a Plan for Reorganization with the condition that this be done promptly. The Court set a deadline of February 28, 2011 for any party to file a Plan of Reorganization and an accompanying Disclosure Statement. The Court also shortened the standard notice period for consideration of the Disclosure Statement (which is similar to a prospectus in that it is designed to provide enough information for creditors to vote on the Plan of Reorganization it accompanies). The hearing on consideration of any Disclosure Statement is scheduled for March 16, 2011 at 9:30 a.m. Prudential's Motion for Relief from Stay was carried over to that date as well.
The Committee will continue our efforts to determine whether a consensual plan is still possible.
On Saturday, January 29 Mike Tiernan issued a message to all members titled "Chapter 11 Update". The message summarized the Debtors' perspective on the current posture of the Chapter 11 case and provided members a proposed Chapter 11 Plan of Reorganization.
Regrettably, the summary contained inaccuracies regarding the position taken by the Debtor, Prudential and the Unsecured Creditors' Committee, and the posture of this case. The Committee believes that several of these inaccuracies need clarification so that all members understand what is facing the Club and how we got here.
First, any suggestion that the delays in this case are attributable to the Committee is simply false. The overwhelming majority of the pleadings in this case were filed by either the Debtor or Prudential. The only responses filed by the Committee were (i) an objection to Prudential's Motion for Relief from Stay (the pleading whereby Prudential requests permission to foreclose); and (ii) an objection to the Debtor's Motion to separately classify creditors. The former was withdrawn, while the latter was upheld by the Court. (The Committee can provide the official Court listing of pleadings in this case upon request.) At no time, however, has the Committee ever requested a delay in these proceedings.
Until the parties entered judicial mediation in October of last year, the Committee had taken a "wait and see" approach. It requested only that any proposed plan (i) provide a fair and equitable payout to unsecured creditors; and (ii) put measures in place to insure that the Club is operated with financial transparency and otherwise in a fiscally responsible manner. The perceived means for achieving these results have changed as the Debtor's bankruptcy case has progressed. The Committee's suggestions have, until just a few weeks ago, been rejected.
Second, the suggestion was made that the Committee's Memorandum of Understanding with Prudential was agreed to in order to force a foreclosure of the Club. This was not the case. The Committee agreed to the Memorandum of Understanding to provide some protection to creditors and FCCC members in the event that an agreed plan was not reached and foreclosure occurred.
In the proposed Plan the Debtor has included several provisions advocated by the Committee. But all stakeholders must recognize the success of a Plan depends on the ability of the Club to deliver quality service while meeting the financial terms. The Committee has viewed the 2011 financial plan, but has yet to see the five-year plan which it requested. The Plan shared with you showed that the financial terms needed to satisfy Prudential are much tougher in the latter years of the Plan, and still require either a sale of the Club by the end of year five, or a refinancing of the Club. Importantly, it is likely that the Court will also assess the financial viability of the Plan before approving it.
The Committee has been informed on several occasions that agreement had been reached by the Debtors with Prudential, only to have the Debtor later state that the proposed agreement "is not workable" for some reason. It now appears that the Debtor, being unable to reach an agreement on all terms of the proposed settlement, intends to take the terms they find most acceptable and try to have the Bankruptcy Court force them upon the other parties.
We invite any member to contact us with questions (jaswbowlin@verizon.net or bakergroup@cox.net ). We will continue to keep you informed as warranted by new information.
Creditors Committee
On Tuesday, January 18 the Bankruptcy Court in Norfolk heard evidence on (i) the Debtors' motion to consolidate the Ford's Colony Country Club and Marsh Hawk Golf Club entities into one entity for purposes of the bankruptcy; and (ii) Prudential's motion for "Relief from Stay" which, if granted, would permit Prudential to proceed with foreclosure. Neither of these issues was resolved at the January 18th hearing, and further evidence as well as arguments will continue on February 1. The Court also heard arguments from both parties on a motion by the Debtor alleging that Prudential is not the correct party to request the right to foreclose. This argument is based upon the terms of an agreement between Prudential and Textron, who was the original holder of the note (Prudential acquired a 97.25% interest in the note in 2007). This argument also remains unresolved and will be considered at the February 1 hearing.
Since the fall of 2010, the Unsecured Creditors' Committee has advocated for a consensual Plan of Reorganization between the parties — the Debtors, Prudential, and the Committee. For those of you unfamiliar with the bankruptcy process, a Plan of Reorganization is a contract or agreement between a debtor and its creditors which describes how the creditors will be repaid, and otherwise governs the conduct of the debtor after bankruptcy. A Plan of Reorganization must be approved by the Bankruptcy Court and by a majority of the creditors. There are certain circumstances under which a debtor can gain approval of a Plan objected to by a majority of the creditors. Those circumstances, however, impose requirements upon a debtor, and thus in the opinion of the Committee, would not likely apply in this case.
Because of developing concerns over whether a consensual Plan was possible, the Committee began discussions with Prudential in December 2010 in order to explore alternative means of (i) assuring that this case moves forward; and (ii) providing stability to the Club. These discussions resulted in a Memorandum of Understanding between the Committee and Prudential which was finalized at the end of 2010. A copy of the Memorandum was introduced into the Court records as part of the January 18 proceedings.
First and foremost, the Memorandum recited the Committee's desire that the three parties – the Debtors, Prudential and the Unsecured Creditors' Committee – reach agreement for a consensual Plan before the Court session on January 18. Absent such an agreement, the Memorandum provided that the Committee would support Prudential in its position seeking Relief from Stay, and oppose substantive consolidation. The terms of the Memorandum likewise outlined the terms upon which Prudential would purchase unsecured claims, and the general course of action Prudential would take in the event of its takeover of Club operations – again assuming that no agreement was reached between the parties by January 18.
Although January 18 passed without an agreed upon Plan, the Unsecured Creditors' Committee will continue its discussions with both the Debtor and Prudential before the next session of the Court on February 1. The Committee did discuss "transparency", treatment of unsecured creditors and other issues with the Debtor on January 21. The Debtor indicated it was largely in agreement with specific Committee points on financial transparency. It is still possible that a three-party agreement can be reached, but to date it has been elusive. The Committee is discouraged with the pace of the process and recognizes that uncertainty is not in the best interest of the members, the general community and the creditors. We will do what we can to resolve these matters to the best of our abilities.
The CCMA thru its attorney, Tarley Robinson, PLC, has issued a Position Paper to the three lead legal firms handling the Chapter 11 proceeding. The three firms represent the Debtor, Secured Creditor and the Creditors Committee. The purpose of the letter was to respond to the courts desire to hear from the membership and to go on record with the court regarding the concerns and expectations of the membership going forward.
The letter states very clearly our overall objective for our club, our position on club ownership, the ongoing role of the CCMA and finally it delineates the parameters under which a Re-Organizational Plan would be acceptable to the CCMA and the membership. (Click here to view postion paper)
If you have any questions on the paper feel free to contact the CCMA via the “Contact Us” link below.
Thank You,
CCMA Board
Update January 2, 2011
The following is an update on upcoming Chapter 11 proceedings. On January 10 the Court will hear arguments on the consolidation of the entities (Ford's Colony Country Club and Marsh Hawk Golf Club). On January 18, the Court will receive a status report on the development of any Plan of Reorganization and may continue a hearing on Prudential's Relief from Stay motion. As in the past we will apprise you of the results of these hearings.
Our Legal Fund drive has been a huge success. By the end of 2010 we had received over 415 contributions (45% of members) for a total of $11,300. We spent just under $4,000 which leaves $7,300 to cover 2011 expenditures. It is our sincere hope that it will not be necessary to spend this money, but we will do so if we believe it would be in the best interest of the members.
Notwithstanding the uncertainty created by Chapter 11, membership support of the club has been exceptional. It is very apparent to all the parties involved with the Chapter 11 process that the membership at FCCC, while neutral in terms of future ownership, has voted with their wallets and hearts in support of an ongoing and financially viable club. It is our sincere hope that we are coming to a conclusion on the Chapter 11 process, hopefully within the first quarter of 2011. In the meantime let’s continue to enjoy and support “our” club.
Creditors' Committee Update November 17, 2010
On November 17, 2010, the United States Bankruptcy Court conducted a hearing on:
Although there were other matters on the Court's docket, these were not as important.
As we have noted previously, the Debtor, Prudential and the Creditors' Committee have spent a considerable amount of time since mediation on October 28 attempting to reach an agreement for a consensual plan of reorganization. Unfortunately, the parties were not able to reach an agreement.
Prior to the November 17 hearing, to facilitate agreement, the Committee had offered to waive its primary request of the Debtor concerning governance. This request was a seat on the Debtor's board of directors appointed by the CCMA to provide membership an oversight role. This offer was conditioned on the Debtor reaching a business deal with Prudential that would allow the case to move forward and a firm agreement on adequate financial transparency in the future.
On November 16, The Committee was informed by the Debtor's counsel that the Debtor and Prudential could not reach an agreement. Furthermore, the Debtor and the Committee have yet to agree on what is required to provide meaningful financial transparency. The Committee will continue to seek an agreement with the Debtor on this issue going forward.
In addition, the Committee, which had opposed Prudential's request to foreclose, reached an agreement with Prudential under which Prudential would not immediately foreclose on the golf course in the unlikely event that it prevailed on the Motion for Relief from Stay. This understanding essentially provided the Committee up to 4 months to work out either an agreement with the parties or propose to the Court an acceptable plan of reorganization in order to avoid having the golf course put up for sale. To obtain Prudential's agreement to hold off on any foreclosure, the Committee agreed to waive its objection to Relief from Stay and take a neutral position, leaving the matter to be addressed between the Debtor and Prudential in Court on November 17.
Because the Debtor was shouldering the defense to the Motion in any event, the Committee's agreement with Prudential insured that both members and creditors were not harmed regardless of how the Court ruled. In short, it kept the hearings from becoming an "all or nothing" prospect for the creditors and the Club.
At the end of the hearing on November 17, the Court ruled against Prudential on the Motion for Relief from Stay. However, the Court noted that the members, residents and the creditors needed some assurance that this process would move toward prompt resolution. To that end, the Court also denied the Debtor's request for an extension of the exclusive period during which only it could file a plan of reorganization. The Court decided not to rule on the classification request until a plan is produced.
The Court reemphasized the importance of resolving this case and particularly recognized the membership as critical to financial viability.
In summary, FCCC remains in operation and the Debtor can continue it efforts to produce an effective reorganization plan. The Creditors Committee can work with the Debtor and Prudential collectively or separately to produce a Plan for the Court's consideration. The next Court date is December 13 to hear arguments on the value of Prudential's claim against the Debtor's assets. On January 13 the Court will hear arguments on the consolidation of the entities (Ford's Colony Country Club and Marsh Hawk Golf Club). A status report on the development of a comprehensive Plan of Reorganization and any alternative Plans is scheduled for January 18.
The Committee's overall objective remains that the Club be financially viable, well run and continue to be an important asset for members and residents. In this the way, the unsecured creditors would also have the possibility for some return. The Creditors Committee continues to believe adequate financial transparency is a vital component of an acceptable Plan.
On Thursday, October 28, 2010, the Creditors Committee, Prudential and FCCC participated in judicial mediation. The purpose of the mediation was to resolve the various matters in dispute among the parties. As most of you know, the Creditors Committee's has focused on the:
Possibility of some return to unsecured creditors, most of whom are members or former members
Objective that the Country Club which emerges from this process is well run and financially sound.
After many hours Thursday, it appears than an agreement has been reached capable of achieving both results.
Counsels for each party are scheduled to provide a status report to the court on November 4. The objective is to move as quickly as possible to work out the details of the framework resulting from the mediation. Once the final terms of the agreement have been reached, they will be circulated to you as well. In the interim, we wanted the membership to know that FCCC bankruptcy once again appears to be moving forward.
Sam Bowlin
President
Over the past few weeks, the Debtor, Prudential and the Creditor's Committee filed various pleadings with the United States Bankruptcy Court. A number of these pleadings were directed at terms or provisions which would determine when or if the Debtor could emerge from bankruptcy. At the outset of the hearing held on September 16, the Judge questioned whether judicial mediation would assist the parties in reaching a compromise. The parties agreed to this suggestion.
The objective is for the parties to reach a solution by November 4. The effect of this action is that the Debtor's exclusive period to file a Reorganization Plan will continue until then and other issues before the Court will be continued pending the results of the mediation efforts.
Separately, the Creditor's Committee has filed a motion requesting approval to engage a golf consultant to assist in reviewing the Debtor's financial operations.
Dear Members,
The Reorganization Plan is due by September 30 and we anticipate that we will need the services of our attorney to help us evaluate the Plan's impact on the membership. If this becomes necessary, it is important that we have funds in hand.
We are requesting a contribution of $25 per member to offset the cost of counsel.
As of August 22, we have received $8,325 from approximately 38% of the members. We sincerely thank those that have responded and have posted the list of donors on the CCMA website and board in the computer room.
Since these funds will protect the interests of all members, we are asking all members who have not yet contributed to send a check payable to The CCMA. Please mail it to our treasurer, Frank McMorrow, 124 Portland, 23188; drop it into the locked box in the computer room; or hand it to a CCMA Board Member.
Any unused funds will be refunded at the end of the Chapter 11 process.
Thank you for your help.
Sam Bowlin
Dan Desmond
Barry Golliday
Gale McCune
Frank McMorrow
Warren Wright
On July 22 the United States Bankruptcy Court held hearings on the following matters:
(i) an objection by Prudential Industrial Properties, LLC to the Creditor's
Committee's Application to Employ Counsel
(ii) a Request by Marsh Hawk and Ford's Colony Country Club to continue using
funds to operate through October
(iii) a Request by the Debtor to extend the time it has to file a Plan of
Reorganization.
Prudential's objection to the Creditor's Committee hiring counsel was limited to an argument that no funds upon which Prudential has a lien (known as "cash collateral") should be used to pay counsel fees. The Court noted Prudential's objection but approved the appointment of Mr. John McIntyre as Counsel to the Creditors Committee. Any ruling on fees to be paid to Mr. McIntyre will be deferred for subsequent review.
The next matter heard was a motion to use Prudential's cash collateral to continue operations. After reviewing the Debtor's cash plan for August through October, the cash plan was extended with the exception that the Court requires greater definition of projected capital improvements totaling roughly $45,000. The Debtor noted that it did not think Prudential has an interest in the majority of cash being generated from operations and so future motions of this nature may not be necessary.
Finally the Debtor was granted an extension to the end of September to file its Plan of Reorganization. Subsequent to the Court hearing, the Committee met in Mr. McIntyre's offices to discuss preparations for reviewing the Reorganization Plan as it becomes available. As we indicated before, the Creditor's Committee will actively participate in the formulation of the Plan to help insure that the rights of creditors are represented.
Sam Bowlin
President
Creditors Schedule Amendment - Member Advances
On June 30, 2010 the Debtor's Counsel filed an amended schedule with the United States Trustee that lists Creditors that have claims for member advances. Individuals concerned should have received a mailing regarding the amended schedule. A Proof of Claim form is not technically required if the claim is listed accurately, and is not listed as "disputed", "contingent" or "unliquidated". Nevertheless, filing a Proof of Claim form is a good idea. Any Creditor listed who desires to rely on the schedule has the responsibility for determining that the claim is listed accurately and that it continues to be accurately listed in the event that the Debtor' schedule is amended in the future. The filing deadline remains July 28, 2010.
Reorganization Plan
On July 1, 2010 the Debtor's Counsel entered a motion requesting that the Debtors exclusive period for preparing a Chapter 11 Plan be extended until September 30, 2010 and the period for soliciting acceptance of the plan be extended to November 30, 2010. The filing cited several reasons for this motion, including complexity of the case and need for sufficient time to negotiate a plan, and asked the court to schedule a hearing on July 22 or soon thereafter to enter an order extending these periods. This type of request is typical in a Chapter 11 case.
The Creditors' Committee anticipates that the Debtor will begin to formulate a plan within the next 30 to 60 days, once it has obtained an appraisal of the golf course. The Committee will, of course, actively participate in the formation of the plan to help insure that the rights of creditors are fully represented.
Sam Bowlin
President
The Creditor's Committee met on Friday, June 18 and elected Phil Radcliffe as Chairman. Thereafter, the Committee continued its review of the Club's financial information. Over the next few weeks, the Committee will continue to work with the Club in order to substantiate the past and current status of operations at the country club. The Committee expresses its thanks for the time and cooperation of those involved.
In addition, the Committee addressed the numerous questions which members have raised about filing proofs of claim. The Committee suggests that any person believing he or she has a claim should file a proof of claim form prior to the July 28 deadline. Filing is necessary to receive a distribution in the Chapter 11 case if you are owed any amounts from Ford's Colony.
FILING A PROOF OF CLAIM
If individuals wish to file a claim, go to: http://www.vaeb.uscourts.gov/scripts/formsqry.exe ,then click on Form #10 (Proof of Claim).
The form should be sent via Certified Mail to: Attention Clerk of the Court, U.S. Bankruptcy Courts, Eastern District of Virginia, 600 Granby Street, Room 400, Norfolk, Virginia 23510-1915.
A link to the form required is also found on the home page of the CCMA website: www.fc-ccma.org.
The case names and numbers needed for the form are: Ford's Colony Country Club, Inc. /Case number 10-50633-SCS and Marsh Hawk Golf Club, LLC /Case number 10-50632-SCS.
Also, Jay Legum, in the Trustee's Office, is a good resource if you have any questions about filing. His phone number is (757) 441-6012 and his e-mail address is Jay.W.Legum@usdoj.gov.
Sam Bowlin
President
CREDITORS COMMITTEE
I know most of you are aware of the untimely death of Jim Neidhart last week. Jim was Chairman of the Creditors Committee and provided us with his 35 years of experience and expertise dealing with bankruptcy issues. Our thoughts and prayers continue to go out to Jim's family.
The Creditors Committee needs to press forward with its responsibilities even with this tragic loss. The Committee members selected Phil Radcliffe as new Chairman and we will meet again this week to further plan our next steps, including reviewing debtor financial information and consulting in the formulation of the reorganization plan.
CHAPTER 11 FILINGS
Filings should continue to be minimal over the next few weeks. The next court hearing is on the continued use of cash collateral by the Club, scheduled for July 22. The debtor reorganization plan is due August 1.
PROOF OF CLAIM FORMS (Reminder)
The deadline for filing is July 28, 2010. A link to the form required is found on the home page of the CCMA website: www.fc-ccma.org . The case names and numbers needed for the form are: Ford's Colony Country Club, Inc. /Case number 10-50633-SCS and Marsh Hawk Golf Club, LLC /Case number 10-50632-SCS. Also, Jay Legum, in the Trustee's Office, is a good resource if you have any questions about filing. His phone number is (757) 441-6012 and his e-mail address is Jay.W.Legum@usdoj.gov.
MEMBER BENEFITS
Member and resident support continues to be critical to the future of the Club. Again, our overall objective is a well managed, financially viable Club, with three courses, that provides quality service to membership and continues to be an important asset that adds value to the Ford's Colony Community.
Sam Bowlin
President
CREDITOR'S COMMITTEE
The Creditor's Committee has approved employing John McIntyre, of Wilson & McIntyre PLLC, from Norfolk as counsel to represent the Unsecured Creditor's Committee. An important next step for the Committee is to arrange a meeting with the Debtors, their counsel and the Committee Counsel.
CHAPTER 11 FILINGS
The filings in the Marsh Hawk Golf Club and Fords Colony Golf Club have been minimal over the past 2 weeks. The Debtor has filed information concerning its financial report for the month of April that shows the Club was modestly profitable for the month.
PROOF OF CLAIM FORMS
As we have said before, we cannot represent claims of individual members. If individuals believe they need legal advice, they should consult with an attorney to protect their interests. However, if individuals do wish to file a claim form, Mr. McIntyre provided information on the filing process when he spoke to us two weeks ago.
The steps are as follows: Go to website http://www.vaeb.uscourts.gov/scripts/formsqry.exe, then click on Form #10 (Proof of Claim).
If you wish to file, the form should be sent via Certified Mail to: Attention Clerk of the Court, U.S. Bankruptcy Courts, Eastern District of Virginia, 600 Granby Street, Room 400, Norfolk, Virginia 23510-1915.
The deadline for filing is July 28, 2010.
MEMBER BENEFITS
As we have said before, protecting member benefits is a primary concern. Also, member support continues to be critical to the future of the Club. Our overall objective is a well managed, financially viable club, with three courses, that provides quality service to membership and continues to be an important asset that adds value to the Fords Colony Community. We will continue to keep you informed on the progress.
Sam Bowlin
CCMA President
MEETING WITH JOHN McINTYRE
On Thursday, May 13, approximately 75 FCCC members met with John McIntrye, a bankruptcy attorney. He provided background on Chapter 11 filing and information on the claim filing process and answered questions about status of individual members. Based on feedback from participants, the meeting went well.
CASH COLLATERAL
A Final Order permitting MHG (the club) to use cash collateral to continue to operate was entered by the Court on May 3, 2010. It permits MHG to make disbursements in accordance with a Budget attached to the Final Order. MHG is not to exceed the disbursements by more than 5%. The Final Order permits MHG and the Lender to agree to increases in the disbursements without having to have court approval. The Final Order automatically terminates on July 31, 2010 unless:
A hearing is set for July 22, 2010 at 11:00 a.m. on the continued use of cash collateral.
CREDITORS’ COMMITTEE
The Creditors’ Committee has approved the employment of counsel to represent the Unsecured Creditors’ Committee.
Sam Bowlin
CCMA President
MEETING WITH ATTORNEY - THURSDAY, MAY 13, 10 AM - S & T CLUB
To help individual members with possible claims (e.g. Membership Advances), the CCMA has arranged for John McIntyre, an experienced bankruptcy attorney, to be at the Swim & Tennis Club on Thursday, May 13 at 10 AM to discuss, in general, your status and possible options. We apologize for the short notice, but wanted to have this meeting at Mr. McIntyre’s first availability.
His firm is willing to represent individual members or groups of members who decide to secure their own legal counsel.
Our attorney advises us that the CCMA By-Laws require the CCMA to represent the rights and privileges of all members. We cannot represent claims of individual members. If any members believe they need legal advice, they should consult with an attorney to protect their interests.
CREDITORS’ COMMITTEE
The United States Trustees Office has formed a creditors’ committee in the Marsh Hawk Golf Club, LLC and Ford’s Colony Country Club, Inc. Chapter 11 filings and we can now confirm that the CCMA will have formal representation on the committee. The committee members are: Jim Neidhart, Sam Bowlin, Tom Hughes, Phil Radcliffe and Don Baker. All of the members are homeowners and are present or resigned FCCC members. The creditors’ committee is empowered to do the following pursuant to the United State Bankruptcy Code:
The creditors’ committee is meeting next week to interview attorneys to act as counsel to the creditors’ committee.
MEMBER BENEFITS
To restate what we have said before; protecting your member benefits is our primary objective. All concerned continue to express the importance of maintaining the club facilities and golf courses, and the importance of members to the future of the club.
Sam Bowlin
CCMA President
As stated in our last update, this past Thursday was the Creditors Meeting which was held at the U. S. Trustee’s Office in Newport News. The purpose of the meeting was a review of the schedules and exhibits submitted by the Debtor. The Trustee started the session with his own list of questions and once he was finished, he opened the floor for all present to ask direct questions of the Debtor.
The following are the highlights from the meeting:
. Main Attendees were: U.S. Trustee, Club management, Club’s Attorney, CCMA, FCHOA, several ex club members, and Acushnet (via phone)
. The U. S. Trustee asked several questions regarding the corporate history of the company, ownership, insider and affiliate debts, number of employees, salary ranges, overview of membership and background on member Advanced Payments.
. CCMA requested representation on the Creditors
Committee
. 90 day extension to Cash Plan approved by Court (this allows the Club to
continue to operate and use its cash to pay bills). On July 22, 2010 the club
will go back to court and seek approval for another extension. This procedure of
the Debtor seeking and the Court approving the continued use of cash is normal
in Chapter 11.
. The Financial extension plan continues to assume no changes in member dues and no changes in our member benefits.
. Club management acknowledged the importance of the membership and stated that, in order to keep the membership intact, the club must be maintained in excellent condition.
.Club Management is also preparing to secure an updated appraisal on the property (three golf courses, driving range, club house, parking lots)
. Early this year a fair number of our members prepaid their annual dues, trail fees and walking fees. Prepaid Member dues are recognized as a liability on the financial schedules submitted by the club. When these payments were made by the members the full amount was recognized as a liability and each month one twelfth of the total is recognized as Revenue. The Prepaid Trail Fees and Walking Fees were all taken into Revenue in January. Club management stated that they remain very confident that the club will continue to operate and, therefore, will be able to honor these 2010 prepayments.
. Confirmation that expenses related to the Chapter 11 proceeding (Court costs, filing fees, Attorney fees and other Professional fees) will be paid out of the club’s revenue. While this news may come as an unpleasant surprise to some of our members, this is standard practice and these are necessary expenditures within Chapter 11.
. We inquired about what recourse the membership has in case our member benefits, service levels at the club, or golf course conditions begin to deteriorate. The U.S. Trustee advised us to confer with our Attorney on this issue. We will be reviewing this issue with the CCMA’s attorney and will keep the membership updated.
. Advanced Payments – all ex members of FCCC have or will be contacted by Debtor’s Attorney with information on how to file a claim, deadline is apparently July 28, 2010. All seem to concur the overall dollar value of the Advanced Payments is +$4 million. (See paragraph below on upcoming meeting)
. Per FCCC attorney discussions with Prudential are
ongoing, cooperative, with expectation of a successful outcome later this year.
This is a positive sign which we will monitor very closely.
. The club is working on a reorganization plan which they hope to finish within
60 – 90 days.
. Next Status meeting (business review) with Trustee set for July 22, 2010. CCMA
plans to be in attendance.
. Only trade vendor in attendance (via phone) was Acushnet.
. On Friday we learned that a formal Creditors Committee will be established and the CCMA is awaiting confirmation that we will have representation on this committee.
On a separate note, the CCMA, in conjunction with our attorney (Susan Tarley), has communicated with John McIntyre. John is an experienced bankruptcy attorney who is willing to come and meet with all the members who have made “Advanced Payments” (Bondholders) to discuss, in general, the claims of individual members. In addition, he will answer any questions members have about this subject and his firm is willing to represent individual members or groups of members who decide to secure legal counsel. We are hoping to schedule this meeting within the next two weeks.
Lastly rest assured that the CCMA is doing everything it can to stay on top of this very difficult situation and will provide the membership with all the salient information as soon as possible. The Chapter 11 process, by nature, generates a huge amount of data and while we all would like to know all the background, nothing is more important to us than preserving our member benefits and our member experience at Ford’s Colony.
If there are questions that you would like to ask please use the link at the CCMA website and we will respond to you as soon as possible.
Sam Bowlin
President
Background:
Ford’s Colony Country Club, Inc. (“FCCC”) and Marsh Hawk Golf Club, LLC (“MHG”) each filed petitions under Chapter 11 of the United Bankruptcy Code on April 1, 2010 in the United States Bankruptcy Court for the Eastern District of Virginia, Newport News Division. The filings assert that Marsh Hawk Golf Club, LLC is wholly owned by Marsh Hawk Holding, LLC, and that Marsh Hawk Holding, LLC is wholly owned by Ford’s Colony Country Club, Inc.
Summary of Filings:
FCCC and MHG filed a joint motion to use cash
collateral. The lender, Prudential Industrial Properties, LLC (“Prudential”) has
a lien on all assets of MHG, including, any cash receipts of MHG. Therefore, MHG
is required to have approval to use the cash to continue operating the business.
A preliminary hearing was held on April 5, 2010 resulting in an agreed upon
order permitting the use of cash collateral on an interim basis and subject to
certain terms and conditions. MHG is permitted to use the cash collateral for
approved expenditures and may not exceed the total of the approved expenditures
by more than 5%. MHG is required to submit weekly reports. The interim order is
in place until the earlier of (i) the final hearing which is set for April 28,
2010 at 11:00 a.m. in Norfolk at 600 Granby Street, 4t h Floor, Courtroom 1,
Norfolk, VA; (ii) conversion to a Chapter 7 or dismissal; (iii) appointment of a
trustee; or (iv) on the motion of a party in interest if MHG fails to comply
with the order. The interim order recites the current amount claimed by
Prudential as $17,050,564.00 of principal as of 4/2/10 plus
accrued and unpaid pre-petition interest of $619,463.34, plus fees, other lawful
costs and charges and a yield maintenance claim of approximately $4,602,475.27.
The debtors filed their Statement of Financial Affairs and Schedules which provide information on debts, assets, outstanding contracts and recent financial activities. These documents were filed on April 22, 2010. We have not had the opportunity to review these documents in detail and will update you once we have done so.
The debtors meeting of creditors (or Section 341 meeting) is scheduled for April 29, 2010 at 1:30 p.m. It will be held at the Office the United States Trustee at Peninsula Business Center II, 11751 Rock Landing Drive, Suite H1, Newport News, VA The meeting of creditors is a meeting where the United States Trustee makes certain inquiries of the debtors. Creditors also are given the opportunity to ask the debtor questions about their debts, assets and intentions. The meeting is open.
Discussion with the United States Trustee’s Office:
We have talked to the Attorney Advisor in the
Office of the U.S. Trustee.
Presently, there had not been any discussion about a creditors committee. This
does not mean that there will not be a creditors committee. It may be
considered. Once the final hearing on the cash collateral is heard this issue
should be evaluated.
At our request, Tarley Robinson, PLC is monitoring the recent Chapter 11 filings of Ford’s Colony Country Club and Marsh Hawk Golf Club for the CCMA and alerting us to the issues and events that could have an impact on our members.
Presently there are two pending hearings. The first is a final hearing set for April 28, 2010 at 11:00 a.m. at the United States Bankruptcy Court in Norfolk, VA on the debtors’ request to use cash collateral so they may continue to operate the club and golf course. The second is a meeting of creditors, which is scheduled for April 29, 2010 at 1:30 p.m. at the Office of the United States Trustee in Newport News, VA. Frank McMorrow and I will be attending the creditors meeting.
The debtors filed their Statement of Financial Affairs and Schedules on April 22, 2010. These documents provide information concerning the debtors’ debts, assets, recent financial activity and contractual obligations. The attorney has not had opportunity to review these documents.
Separately, recognizing that the FCCC was
experiencing financial difficulties, the CCMA began a contingency planning
effort in February to take a leadership role on behalf of the members. As a
first step, we prepared a Briefing Book containing a number of documents that
showed:
The revenue importance of the members (estimated to be about 67% of FCCC annual
revenue)
The key member benefits
The key competitors in the Williamsburg area and the FCCC competitive advantages
The 2009 Survey to show areas of potential FCCC revenue upside
The Social and Golf Associations calendars to show the vitality of the FCCC
This document has already been useful in helping to make our case for membership
on the Creditors Committee. An abbreviated version will be made available to the
membership shortly.
In a Chapter 11 case, the debtor has an exclusive period of 120 days to file its Chapter 11 Plan. This time period may be extended. As we said before, and will say many times in the future, Chapter 11 cases usually move along slowly.
We will continue to communicate with you on the status of the case as events and issues emerge. In the mean-time, we urge you to continue to support the FCCC.
Sam Bowlin
President
Since Ford’s Colony Country Club filed for Chapter 11 on April 2, the CCMA Board has met three times to discuss the implications of the Chapter 11 filing and the role CCMA should play to best represent members interests. Over the past 2 weeks, we have:
Talked with resident members with experience in
this subject area who have offered to help
Identified a number of issues of interest to members on which we need legal
advice before we can proceed
Begun formulation of a communication plan to keep members informed of developments, within the legal constraints of this process
On April 14, we had our initial consultation with our legal counsel (Susan Tarley) on CCMA's rights, responsibilities and options. Based on her advice, our next steps are:
She will talk with the U.S. Trustee about obtaining CCMA membership on the Creditors Committee. This is very important for us to stay informed.
Continue to monitor the process, attend key upcoming meetings and plan to communicate regularly with members.
Hold off on having a general membership meeting until we have more essential information
It’s important to bear in mind that Chapter 11 is a complex and involved procedure which could last a long time. We find ourselves at the very early stages of this process and our primary concern is to see that the club continues to operate and continues to provide our members with the level of service that our membership deserves. As stated above, we will also continue to pursue and explore all legal options open to us and seek membership representation in the legal proceedings. We believe that by focusing on these two objectives our ability to protect our member benefits will be maximized.
We will have more to report by Friday of next week.
In the meantime, we urge you to continue to enjoy and support the Club
Sam Bowlin
President
Since the CCMA Board became aware of the FCCC filing for Chapter 11 Reorganization last Friday, April 2, we have met with Club management. Management assured us that all benefits will be maintained and we offered our cooperation and support for a successful outcome.
It is important to understand we are very early in this process and have much to learn.
The CCMA Board urges members to continue to support the Club.
We will keep you informed as the process evolves and will continue to represent your best interests.