One of the most exclusive private golf clubs in South Carolina has filed for bankruptcy, setting the stage for its sale to a group led by the owner of the NFL’s Houston Texans.
Johns Island-based Briar’s Creek Golf LLC, which does business as The Golf Club at Briar’s Creek, sought protection from creditors late Tuesday.
The owner of the manicured 18-hole layout off River Road listed assets of about $1.56 million and liabilities of $37 million, according to the court filing. The asset figure does not include the Rees Jones-designed course and the unsold home sites. The real estate values were not known Tuesday, according to a document filed with the U.S. Bankruptcy Court.
The club blamed the last recession for its financial ills. One of the biggest problems was a big drop in dues and other revenue as members dropped out during the prolonged rough patch, said founding member Michael Martin, who signed the 139-page bankruptcy filing.
“The club has weathered the golf market downturn of the last four to five years, however, the club needed to regroup in order to ensure its long-term success,” Martin said in a statement Tuesday. “The details of the proposed plan have been presented to club founders and members, and feedback is positive that the restructuring will allow the club to flourish.”
Other founding members at Briar’s Creek include the billionaire Houston Texans owner and former energy industry executive Robert McNair, who has a home on nearby Kiawah Island. The University of South Carolina graduate is leading an investor group that’s seeking to buy the assets for $11.3 million and invest another $2 million into a new debt-free private club.
In a statement, McNair said Briar’s Creek “is a business. And sometimes, in order to be successful, a business must reset. We hope our purchase proposal will ultimately be approved through the bankruptcy court process and allow us to chart a new path toward success.”
McNair won’t be making any drastic changes, club officials said. The plan is to retain the existing 50-worker staff and management. Active members and qualified former members will be offered memberships in the new club.
The purchase agreement filed Tuesday calls for McNair and his investors to pay $7.4 million in cash for the course, clubhouse, equipment, undeveloped home lots and other assets.
Also, the buyers would assume $3.9 million in secured debt owed to another founding member, Edward L. Myrick Sr., and repay $2.9 million owed to a local bank. Myrick is a Florida resident who sold the 300 acres that make up Briar’s Creek. He’s also part of McNair’s newly formed Briar’s Creek Holdings, which wants to finalize the purchase by June 30.
McNair would not publicly discuss the purchase before it is approved by a judge, according to a spokesman for the law firm that represents his buyout group.
The Texans owner and his investors said in court documents the buyout is “fair and reasonable” and is in the best interests of creditors and members. Competing bidders willing to pay at least $500,000 more will be able to submit counteroffers.
Opened in 2002, Briars Creek was named “Best New Private Course” for that year by Golf Digest.
The bankruptcy filing will enable the club to renegotiate or reduce its $31 million in unsecured debt.
About $26 million of that is made up of refundable initiation fees and loans from club founders and several dozen members. Those liabilities are now worth a fraction of their face value.
Under the sale terms, active members and former members will likely get back a tiny portion of their mostly seven-figure initiation fees. The exact amount has not been determined.
“That’s a good question,” said engineering firm owner Tony Berenyi, who recently resigned from Briar’s Creek.
At its peak, the price of entry was about $100,000, and the monthly membership dues ran as high as $1,000. Briar’s Creek said the initiation refunds will based on a pro-rated formula after factoring out administrative costs and other expenses, assuming the sale goes through.
Contact John McDermott at 937-5572.