Hawthorns Golf and DIP lenders object to confirmation of HGCC plan

By Kali Hays

New York, Oct. 21 – Hamilton Proper Partners Golf Partnership, LP, which does business as Hawthorns Golf & Country Club, objected to the confirmation of HGCC Lender, LLC’s proposed plan of liquidation, according to an Oct. 20 filing with the U.S. Bankruptcy Court for the southern District of Indiana.

Hawthorns debtor-in-possession lenders, Horizon III, LLC, Horizon Two, LLC and Sunset LLC, also filed a joint objection to the HGCC plan.

According to Hawthorns’ objection, the sale in the HGCC plan is “overly rushed” and the company has done no marketing to boost potential interest in the proposed sale.

In addition, Hawthorns said HGCC’s right to a credit bid for the assets should be limited and that the inclusion of unreasonable fees should be disallowed; it also claimed that the proposed asset purchase agreement is deficient, according to the objection.

As previously reported, Hawthorns withdrew its second amended plan of reorganization on Oct. 16 and the court said that its approval of HGCC’s disclosure statement would remain in effect.

Under HGCC’s plan, the lender is acting as the stalking horse bidder for the assets.

HGCC’s 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 a value equal to the replacement of initiation fee refund rights to members, plus a value equal to the amount of pre-paid credits honored, plus a 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 prevailing bidder, it intends to operate the assets as a private golf club providing current members and resigned members of the existing club rights and benefits in connection with the new club, depending on the terms of the final asset purchase agreement.

HGCC said these benefits could include the ability to exchange current unsustainable deposit refund rights for a new, more sustainable deposit refund right under new club membership documents.

A hearing to confirm HGCC’s plan is scheduled for Oct. 29.

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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