SAVANNAH -- Sea Island Co. has filed for federal bankruptcy protection with a plan to sell its luxury resorts that have been secluded getaways on the Georgia coast for wealthy travelers and American presidents since 1928.
The family-owned company filed a plan to reorganize in federal court Tuesday, saying it was unable to repay more than $600 million owed to lenders including Synovus Bank, Bank of America and Bank of Scotland after the economic meltdown took a toll on Sea Island's resort and real-estate businesses.
According to court filings, Sea Island hopes to emerge from bankruptcy protection by selling its four resorts, three golf courses and two private clubs for $197.5 million to a group of investors represented by two private firms.
If the judge approves the plan, the new owners would be investment managers Oaktree Capital Management and Avenue Capital Group.
Bill Jones III, Sea Island's chief executive officer, said in a statement that the company's vacation holdings will remain open. The sale plan calls for Jones, whose grandfather helped start the company in the 1920s, to stay on as CEO.
"We are very pleased to have reached an agreement with an investment group that has come to know Sea Island well and appreciate what made us special from the start," said Jones, who called the sale to investors "the best outcome."
Sea Island, a 2-by-5-mile stretch of private beaches and ancient oaks 80 miles south of Savannah, got its start as an exclusive getway in 1928 when Jones' grandfather, Alfred Jones Sr., opened the Cloister resort with his partner, Howard Coffin.
The Joneses took over the business after Coffin committed suicide in 1937.
Under the Jones family, Sea Island has maintained a rugged veneer with thick stands of ancient oaks and roaming alligators while marketing itself as a secluded vacation escape for the wealthy.
Sea Island Co. is the largest private employer in coastal Glynn County with 1,400 workers.
Woody Woodside, executive director of the Brunswick-Golden Isles Chamber of Commerce, said he was relieved to learn the resorts would remain open.
"It's paramount that they do," Woodside said. "They touch about every family and business in this community in some direct or indirect way."
Sea Island's prominent guests through the decades have included Presidents Calvin Coolidge and Dwight D. Eishenhower.
In 2004, President George W. Bush brought the leaders of the world's wealthiest nations to Sea Island for the Group of Eight summit. The island also is where Bush's parents honeymooned in 1945.
After the summit, Sea Island underwent a major expansion and renovations aimed at luring even wealthier customers, a project that wrapped up in 2007.
The result was room rates at the Cloister starting at $395 a night, with suites going as high as $5,000 a night.
In its court filings, the company said it planned to pay off loans for the renovations by selling vast acreage of undeveloped coastal land it owns.
The collapse of the real estate market spoiled those plans, and the sour economy also took a chunk out of Sea Island's resort business.
By the end of 2009, the company was in a deep financial hole. Court filings show Sea Island Co. by the end of 2009 with assets of $603.7 million and liabilities totaling $825.2 million.
The company said in a statement that it hopes to emerge from bankruptcy by the end of this year.