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The Cliffs Files for Bankruptcy Protection on Tuesday

The Cliffs Files for Bankruptcy Protection on Tuesday

We’ve all read about how the economy has taken a huge bite out of corporate sponsorships at all levels of professional and amateur play. Many golf communities across the country are hurting or scrambling to seek revenue wherever they can find it as golf and country club real estate markets continue to see unstable sales figures.

On Tuesday another golf community – this one a HUGE ONE and one that has ties to both North and South Carolina – filed for bankruptcy protection. The Cliffs Club & Hospitality Group Inc., part of developer Jim Anthony’s golf and luxury home company, filed for bankruptcy protection.

Interestingly, the Chapter 11 filing in U.S. Bankruptcy Court in South Carolina did NOT include Anthony’s parent company, The Cliffs Communities Inc., based in Travelers Rest. The filing actually came on behalf of ClubCo, which is a Cliff’s subsidiary that actually owns the golf courses as well as the related amenities. ClubCo was the chief debtor listed in the filing although court records indicated that there were additional debtors including as many as eight LLCs that each filed voluntary petitions for relief under Chapter 11 and the attorneys involved have asked that they be jointly adminstered.

Obviously the filing is convoluted as these debtors have listed “thousands of creditors” that constitute more than $100 million in debt, with some creditors owed as much as $800,000.

Sources with The Cliffs nor Anthony’s people are talking at this point but one bit of news that is coming out of the Tuesday filings is the fact that Steve Carlile, a businessman from Marshall, Texas – who owns property at The Cliffs – has previously stated that he expects to take control of Anthony’s golf course projects once ClubCo emerges from bankruptcy.

Earlier in February, Anthony reported that The Cliffs would be reorganizing and that he fully expected to give control of his golf course projects to Carlile and his partner/wife (Penny) who committed to move ahead with a Gary Player designed course in Greenville County.

Negotiations have been ongoing for months and ClubCo’s Board and management staffers agree that the Carlile Group offered the best plan for the future of the golf clubs with terms that best addressed all of the creditors “fairly”.

Several of Cliff’s Communities, Inc properties were to be sold at a public auction on March 5th and as of now it is not clear how the Tuesday bankruptcy filing would affect that auction – if at all.

That auction was ordered to satisfy a $24 million judgment and foreclosure action against Anthony and his company.

The Cliffs is bordered by hundreds of thousands of acres of protected woodlands, three national forests and one national park, and the communities offer luxury homes and home sites in a variety of settings.

Anthony’s company includes three mountain communities in Greenville County — The Cliffs at Glassy, Cliffs Valley, and The Cliffs at Mountain Park — as well as three lakeside communities at The Cliffs at Keowee, and two mountain developments just outside Asheville, The Cliffs at Walnut Cove and The Cliffs at High Carolina, a project to include a golf course designed by Woods.

As the economy went south in 2008 the financial and legal challenges continued to grow for Anthony and The Cliffs.

Work had stalled at the Cliffs at High Carolina, the planned Woods-endorsed golf community that sits on roughly 3,000 acres between Fairview and Swannanoa. Plans called for 1,100 home sites and a golf course designed by Woods.

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