Bankruptcy Filings for Some Ginn Company Entities in Florida
Tesoro and Quail West are affected by yesterday’s filings. The filings do not include the Quail West golf course and clubhouse.
Palm Coast, Florida – December 24, 2008 – If you have bad news, its best to put it out on a slow news day. On Christmas Eve day, employees and members of two Florida Ginn communities, Tesoro and Quail West, learned that the ongoing credit default negotiations with Credit Suisse have resulted in Bankruptcy filings by Ginn-related entities at the two locations. At Tesoro, all unsold lots, the clubhouse and two golf courses are part of the filing, as are the unsold lots at Quail West. The Quail West golf course and clubhouse are owned by the Quail West Foundation which was not part of the filing.
Properties at Tesoro, in Port St. Lucie and Quail West near Naples are included in a $675 million default of a credit facility with Credit Suisse. The other two Ginn developments under the Credit Suisse lien are Ginn sur Mer in The Bahamas and Laurelmor near Boone, NC.
Five separate Ginn entities filed Chapter 7 on 12/23:
1. Ginn-LA St. Lucie Ltd., LLLP (Case # 08-29769-EPK)
2. Ginn-St. Lucie GP, LLC (Case # 08-29770-PGH)
3. Ginn-LA Quail West Ltd., LLLP (Case # 08-29774-EPK)
4. Ginn-Quail West GP, LLC (Case # 08-29775-PGH)
5. Ginn-Quail West Beach, LLC (Case # 08-29776-PGH)
In the listing of attorneys for case # 08-29769-EPK (number 1, above) it also lists counsel for Credit Suisse, Cayman Islands Branch. The LA in Ginn-LA refers to Lubert-Adler, Ginn’s Philadelphia-based financial partner that reportedly owns 80% of each Ginn project. Robert Gidel, with close LA ties was named president of Ginn in the summer of ’07. Reportedly, he is calling the shots.
In a letter dated today, Tesoro Club Manager JR Congdon states, "As of Tuesday, December 23rd, four of The Ginn Company entities filed for Chapter 7 Bankruptcy in the United States Bankruptcy Court in West Palm Beach, Florida. The entities that filed for bankruptcy own all of the unsold lots, the clubhouse, and the golf courses at Tesoro. We will continue to operate as usual until a suitable buyer purchases the club."
"Drew Dillworth has been appointed The Trustee for The Tesoro Club entities in bankruptcy. Earlier today, Mr. Dillworth met with the employees and management team at The Tesoro Club. He advised them of the impact of the bankruptcy, and of his intention to operate the Tesoro facilities in the ordinary course of business, until a new owner can be found for the Tesoro Club and the other entities in bankruptcy. The Trustee advised that while the bankruptcy cases are Chapter 7 cases, they will be operated similar to a Chapter 11 case."
"The Trustee intends to conduct a meeting with all The Tesoro Club Members after the holidays to advise you of the impact of the bankruptcy and to answer any questions you may have. You will be notified of the exact date, time and location of the meeting as soon as the date is set."
"During our meeting with the Trustee and management team, we recognized that we all: employees, homeowners, club members and lenders, have a vested interest in making this process a success."
"The continued support of our members is critical to our future outcome. The continued payment of your club and property owner association dues and the support of the club’s activities and amenities will help the Trustee to maintain The Tesoro Club’s business operations. This is vital, in order to attract a financially secure purchaser to develop The Tesoro Club to its intended prominence."
As of this posting, the Ginn Company has not responded to a request for comments. The fact that the filings were Chapter 7 (liquidation) rather than Chapter 11 (reorganization) implies that the Ginn Company will no longer be involved. However the trustee’s comments that the process will be handled "similar to a Chapter 11 case," makes it clear that the value of unsold properties is best protected by continuing operation of the facilities.
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Chapter 7 come 11
The dice have hit the wall and come back snake eyes. The end is here for those filed for liquidation under 7. The 11 is continuing operation while assest are listed against debts. Then comes 7 if nothing remains to operate the 11. The court is now in charge so at least the public and especialy owners that bought from Ginn will have an idea of what’s left of the it. Then they can place their bet or cash in and go on to the next game. The ghost of Christmas past on Hilton Head Island has shown its face.
JUST THE BEGINNING
I WATCHED THE HILTON HEAD TUMBLE..WHERE ARE THE BUMPER STICKERS?
And the Rest??
So I wonder what this means for the rest of the communities under the loan specifically Sur Mer and Lurelmor? Is Ginn going to continue with those communities or is the BK for those coming as well?
Toby, have you heard anything new?
sad…
Tesoro was destined to become a great place to both work and live-very sad how things turned out.
I still can’t figure out how somebody like Harvey Congdon (his real name)could hang on to his job for this long. He was hired as the the Golf Pro, then the original G/M quit-so he got it by default.
Who ?
WHo gets the properties if Lubert Adler firm owns 80% or so of the assets ? Is there neck on the chopping block for backing Ginn Company . WHat roll do they play in footing the bill for the work that has been completed on the Ginn sur Mer project . Would it be possable for another firm to pick up the pieces and move forward ? I am very curious where this all ends . Alan Maiden
Reply to Alan
In a Chapter 7 bankruptcy, the assets are sold by the bankruptcy trustee to satisfy creditors. Secured creditors (in this case Credit Suisse) get paid first, then unsecured creditors. Shareholders (owners) typically end up with nothing.