Crescent Bankruptcy’s Effect on Local Golf Courses Still Murky
Cypress, Pines, and Matanzas said not to be part of bankruptcy, but guess who paid the back property taxes?
Palm Coast, FL – November 18, 2009 – Ever since real estate developer Crescent Resources and 130 of its subsidiaries filed for bankruptcy in June, I’ve been trying to sort out who owns the four Palm Coast golf courses. The Grand Haven Golf Course is listed as an asset in Crescent’s bankruptcy filing (although some records would indicate otherwise). Cypress Knolls, Pine Lakes, and Matanzas are not listed. They are owned by The Grand Club LLC, not a party to the bankruptcy. So why did Crescent Resources, LLC pay the delinquent 2008 property taxes due on these three courses?
I feel as though I’m trying to clean my glasses with aloe impregnated Kleenex. The harder I wipe, the more blurred they become.
At the time of the bankruptcy, I called both the Crescent Resources spokesperson for the bankruptcy as well as MG Orender, President of Hampton Golf, operator of all four golf courses and apparently part owner of The Grand Club, inquiring as to the bankruptcy’s affect on the courses. Both told me that none of the courses were included in the bankruptcy. The spokesperson refused to clarify ownership.
Grand Haven
Current Flagler County records list the owner of the Grand Haven course and clubhouse as Crescent Resources, INC, not LLC. It was Crescent Resources LLC that filed for bankruptcy protection. So maybe it was a separate entity. Digging further, I found that in early 2001 (let’s just refer to Crescent Resources as CR) CR INC voluntarily withdrew its active status with the Florida Dept of State, declaring that it no longer did business in Florida. The documentation indicated CR INC was a Georgia Corporation. Looking into Georgia state records, I found that CR INC was merged into CR Georgia LLC in late 2000. CR Georgia is a party in the bankruptcy and is wholly owned by CR LLC.
A Grand Haven member provided a 2007 Offering of Membership for the Grand Haven Golf Club. The offering stated that the course and clubhouse were owned by Grand Haven Golf Club LLC, a Delaware Corporation. Sure enough, upon inspection, I found such a company registered in Delaware in 2000, about the time LandMar bought Grand Haven. But I also found another company, Grand Haven Golf Club Holdings LLC, registered just six days prior to the bankruptcy filing. Is this just a coincidence?
In a filing subsequent to the original bankruptcy, CR LLC clearly lists the Grand Haven golf course and clubhouse as assets.
The Grand Club
I once wrote about the Grand Club LLC, saying it was owned entirely by LandMar. Shortly after publication of that story, I received a call from a Hampton Golf employee, on behalf of MG Orender. I was informed that Hampton Golf was a part-owner of The Grand Club. Public records list the two Members (an LLC legal designation having nothing to do with club membership) of The Grand Club as Hampton Golf, INC and LandMar Management LLC. Landmar Management LLC is one of the subsidiaries participating in the bankruptcy. It is entirely owned by CR LLC. (Hampton Golf INC and Landmar Management LLC are also the two listed "Members" of Grand Haven Golf Club LLC.)
The on-line tax records of the three Grand Club courses are tagged "bankruptcy." Checking with the Flagler County Tax Collector’s office, I learned that the bankruptcy tag was placed because the county had filed "proof of claim" paperwork with the bankruptcy court citing current 2009 property taxes due. This was done because CR LLC paid the delinquent 2008 taxes on July 31, shortly after CR LLC received $110 million in Debtor In Possession (DIP) financing "allowing the company to continue normal operations during its restructuring and enable the company to meet its working capital and general business needs."
Let’s see. DIP financing was used to pay delinquent taxes for an entity that is said not to be a party in the bankruptcy: done, I’m sure, under the watchful eye of the court. Hand me another Kleenex. My glasses are still blurred.
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Listed as an asset of CR LLC
The first clue was the properties were voluntarily listed as assests, in the court documents. The payment of property taxes was to remove the posibilty of a first position lien, (which would put the property subject to govermental procedings portion of the bankruptcy), holder rights to bid. One package of all properties is what they want at the final resolution, so one buyer can offer the court a cash settlement. They probably have a deal worked out already with another investor that will allow them to stay as part owners and operators. My guess is the former mother company Duke Energy, as they have the most to gain, and cash to do it.