Preditory Loansharke Parke Bank

Golf Club Shuts Down

http://www.nj.com/gloucester/index.ssf?/base/news-5/125662022652160.xml&coll=8

Tuesday, October 27, 2009

By Siobhan A. Counihan
scounihan@sjnewsco.com
The Gloucester County Times

WOODBURY The Woodbury Country Club has been shuttered as it seeks to settle millions of dollars in debt through Chapter 7 bankruptcy, but it could be reopened next year by a group of members looking to purchase the property through a liquidation auction.
The historic golf club which had its liquor license suspended this summer, before celebrating its 112th anniversary experienced a brief reprieve from financial difficulties when it seemed like a prospective lender could provide a new opportunity for financing.

"Nothing developed in that regard," said Ira Deiches, the attorney representing the club in federal bankruptcy court. "And the cash flow was simply not sufficient to keep even the current operation going forward. So the board exercised what I think was a reasonable management decision and decided to close the club."

Deiches said that members had been invited to retrieve their clubs or other property from the Delaware Street clubhouse, "so there would not be difficulty for them when and if a trustee is selected to secure the building."

"And we will be working with the bank to take the necessary steps to secure the premises and winterize the course and do what needs to be done," Deiches said.
Parke Bank, the primary creditor in the federal bankruptcy case, is not responsible for the club's closure, Deiches said.

"I think it's important to set something straight: The operation has been terminated," Deiches said. "There will be no more golf at the country club. The board voted to do that. That is not the result of anything that Parke Bank did or did not do."

Gerald O'Connor, a member and bond holder of the club, explained that the previous board of directors incurred a great deal of debt when they had the golf course's greens redone, relandscaped and rebuilt a number of years ago.

"That was extremely expensive," O'Connor said. "That's what saddled the club with a couple million dollars in secure debt. The club had very little if any debt previous to that restructuring of the greens."

He did not specify how much debt the country club is currently carrying.







The club's aging membership also lead to financial instability, as members dropped off and stopped paying dues.
"That was the major cause of the debt burden, which made the club untenable in this much slower economy," O'Connor said.


When the club's members voted in July to file for Chapter 11 bankruptcy, O'Connor said, they also authorized the board of directors to proceed with Chapter 7 bankruptcy if necessary.
They attempted to reorganize under Chapter 11 bankruptcy for several months, but club members were notified over the weekend that the club would be shuttered as they went into Chapter 7 bankruptcy.
"We had an investor that seemed viable," O'Connor said, "but their funding did not come through in the way it needed to be. That's when the board decided this was not going to work. There was just too much unsecured debt to make this viable."
O'Connor, a financial advisor who's also worked as a banker, explained that Chapter 11 doesn't discharge debts but allows a company to reorganize itself. With Chapter 7 bankruptcy, the filer is liquidated.
"A judge is assigned to the bankruptcy, and that bankruptcy judge is the one who determines what can or cannot be done," O'Connor said.
Under Chapter 7 bankruptcy, the country club will likely be auctioned off to the highest bidder so that creditors can be paid back.
If that's the case, O'Connor said he foresees a group of members buying the property and reestablishing the country club sometime next year.
"There are a solid number of members who are in the financial position to do so and have the interest to do so," O'Connor said. "It's just a case of, unfortunately, until the court goes through their process, we have to sit on the sidelines and wait until we're in a legal position to come in and say, ÔHey, we'd be interested in buying the bank's debt and taking the country club back.'"
City Council President Barry Sloane said that would be the best solution possible.
"I think that anybody who lives around there or in the immediate neighborhood is going to want to maintain the country club," Sloane said. "I'm in the neighborhood, and I certainly value it as a centerpiece of this area of town. So it can be somehow maintained or resurrected, that would be really beneficial."
Sloane said it's "a shame that they've had to go this direction" and blame it on the stalled economy.
"I know it's been a part of the social fabric of Woodbury for years and years," Sloane said. "It's a shame to see a tradition like that go."