Hawthorns Golf lender wins court approval for asset sale procedures

By Caroline Salls

Pittsburgh, Sept. 25 – Hamilton Proper Partners Golf Partnership, LP lender HGCC Lender, LLC received court approval of the bid procedures for its proposed sale of substantially all of the company’s assets, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of Indiana.

In July, Hamilton, which does business as Hawthorns Golf & Country Club, and HGCC filed competing plans for the company’s Chapter 11 case.

As previously reported, HGCC’s plan calls for a sale of Hawthorns’ assets, with the lender serving as the stalking horse bidder.

HGCC’s stalking horse bid includes a $5.5 million cash component, of which $5 million will be paid via an offset/credit against the HGCC secured claim if that claim is still outstanding and paid in cash if not, plus a $500,000 cash payment, plus value equal to the replacement of initiation fee refund rights to members, plus value equal to the amount of pre-paid credits honored, plus value equal to the assumption of assumed contract and lease liabilities, plus the value of a projected $1.34 million capital improvement commitment.

If HGCC is the buyer, up to $500,000 of the cash payment will be designated for payment of administrative, priority tax and priority unsecured claims and the costs and expenses of the plan agent and his professionals.

To the extent that the total of those claims and expenses is less than the designated amount, HGCC will be entitled to a refund of the difference.

HGCC said it believes the total purchase price is valued at more than $7 million.

If HGCC is not the high bidder, it will receive a $165,000 break-up fee.

Competing bidders must be able to establish a $1 million reserve for capital improvements, deferred maintenance and working capital and to meet the operational requirements of the golf club, including evidence of unrestricted and available cash on hand of at least $7 million pre-closing and at least $5 million post-closing.

The cash component of initial overbids must be at least $5.8 million. Subsequent bids must be made in minimum increments of $100,000.

The deadline for competing bids is 5 p.m. ET on Oct. 27.

If the HGCC plan is confirmed and competing bids are received, an auction will be held immediately after the confirmation hearing, which is scheduled for Oct. 29 through Oct. 31.

Hamilton Proper, the Indianapolis-based owner of private membership golf club Hawthorns, filed for bankruptcy on Jan. 24, 2014. The Chapter 11 case number is 14-00461.

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