Court Receiver’s Letter Highlights Challenges at Reynolds Plantation

Highly amenitized golf communities face cash flow difficulties as long as the second home and luxury retirement home markets flounder.

"The general corporate overhead expenses have been reviewed in detail and reduced substantially.    These reductions in reoccurring monthly expenses far exceed any reductions which have been made to club amenities.  This process will continue as we identify further savings in general overhead expenses which will not impact the quality of the Linger Longer product nor result in a material impact on the amenities provided to members and owners."

"Receiver’s budgets have been prepared for both lender groups (the Bank of America group and the Empire Financial group) so that arrangements can be made for the timely funding of the substantial operating deficits which still exist and which must be funded during the Receivership.  This process will allow me to maintain adequate cash flow during the Receivership to pay the post-Receivership expenses on a timely basis, and to maintain normal operations for LLDC."

"First, all initiation deposits paid for a new membership will be placed in a segregated account, and will not be commingled with operating funds nor used for operating expenses of LLDC.  These funds will be used to refund membership deposits according to the membership plan. As Receiver, I do not have possession of any of the prior initiation deposits paid by existing members to LLDC, nor am I responsible under my Court Order for them.  However, moving forward under my Receivership and pending the potential sale of the property to a new entity, I will segregate all such new initiation deposits."

"Finally, while I understand the members’ concerns over their prior initiation deposits that were paid to LLDC, I point out that historically all initiation deposit refunds have been made by LLDC when and as due under the existing membership plan.  Since new membership initiation deposits are utilized under the membership plan to pay such refunds when they are due, the existing membership plan essentially is a self-funding mechanism."

"Finally, I would like to resolve any questions about my communications with RIPOC (Reynolds Independent Property Owners Coalition) or other owner groups that express concerns or wish to involve themselves in the Receivership process.  As a Court-Appointed Receiver, I have sole responsibility for the management and disposition of the assets under my Receivership, subject only to lender approval where required in the Order.  I cannot and will not empower or delegate authority to any such volunteer groups.  I will continue to recognize and work with the pre-existing Board of Governors, and its various committees, which are part of the existing membership structure at Reynolds Plantation, as the official advisory Board to LLDC.  I have advised RIPOC and any other new volunteer group that they must submit their issues/concerns/recommendations to the BOG on any matter that is within the existing scope of the BOG.  If any such volunteer group has questions about other areas of my Receivership that are outside the existing scope of the BOG, then those matters can be directed to me and I will address them in my capacity as Receiver, in my sole discretion. "

"With respect to my future course of action at Reynolds Plantation, my attention now will turn to the organization and marketing of the sales effort for the lenders’ collateral.  On this point, my preferred path is to seek consent of all lender groups to offer the collateral for sale as a package.  It is my current belief that a consolidated marketing package is likely to produce the highest value for the collateral, and also the best quality purchaser for the assets.  However, I do not control the decision of the lenders and I cannot guarantee such result.   I am presently organizing the schedule of assets and preparing to list all of them in a consolidated offering, and I hope that the purchaser candidates will  include the premier luxury golf resort owners and developers in the world, but only time will tell as to our success in that regard.  If this initial effort is not successful, then of course various groupings of the assets for disposition must be considered down the road."