Five years ago, Golf Digest named The Bull at Pinehurst Farms, located in Sheboygan Falls, one of the top 70 public golf courses in America. This year, the Jack Nicklaus designed course was almost sold at a sheriff’s sale. The sale was called off minutes before it was scheduled to start because the course’s owners filed for Chapter 7 bankruptcy.
How Did Filing for Bankruptcy Save the Golf Course?
The Sheboygan Press is reporting that a minority owner of the course is attempting to pull together enough financing to buy it. Filing for bankruptcy gives the potential buyers more time to put together a deal. “Richard Hahn — the attorney for The Bull’s creditor, Wisconsin Bank & Trust — said that The Bull and its owners have been unwilling to pay what is actually owed on the loan. The default on the loan is around $4.2 million, but Hahn said the owners are willing to pay about half of that. That won’t cut it for the bank, he said.”
It will be interesting to see what happens to this course for several reasons.
First, we are seeing several courses in Wisconsin close due to golf’s declining popularity. Younger folks find the game too slow, long, and expensive. This is changing the golf industry in a big way.
Due to golf’s decline in popularity, it is going to be harder for developers to get financing for golf course building and development. This puts a crunch on the middle of the market. We’ll always have the American Club on one end of the spectrum, and mini golf in the Dells on the other, but what will be left for the rest of us? This is the second reason it is going to be interesting to see what happens to The Bull.
Finally, this is a very public example of one of the ways Chapter 7 can be used by business owners to help them hold on to their property. In this case, a minority owner is looking for financing in order to buy the property from the majority owners and current creditors. This is not an uncommon occurrence. Business owners frequently use Chapter 7 to get a fresh start or, as in this case, buy themselves some time to get their financial house in order.
Individuals can also use Chapter 7 as a sort of financial reset button. While Chapter 7 bankruptcies are often called liquidation bankruptcies, when an individual files under this chapter it is more about wiping the slate clean of debt than getting rid of excess inventory, property, or contractual obligations.
Who can file for Chapter 7 Bankruptcy?
The ideal Chapter 7 candidate will have primarily unsecured debt (ex. credit cards, medical bills, utility bills, payday loans, etc…) and be current with any secured debt payments such as mortgage and car/lease payments. If this is the case, the individual will typically be permitted to exempt (or keep) most of their personal property.
Our firm files a lot of Chapter 7 bankruptcies, for both businesses and individuals. If you are in financial trouble, and think bankruptcy may be in your future, let’s talk. Contact us today to schedule an initial consultation.