Sea Trail Golf Resort and Conference Center, a 2,000-acre community built around three golf courses in Sunset Beach, N.C., has become one Chinese businessman’s first venture in the United States.
A man known as Mr. Pan to those in North Carolina doing business with him is behind the $8.5 million purchase of the resort at a Chapter 11 bankruptcy auction Monday in Raleigh, N.C., through his recently created North Carolina company Wealth Spring Industry, LLC.
The sale was affirmed at a hearing Tuesday and is expected to close in mid-July.
“We have known Mr. Pan for a few years and have looked at a few deals and kicked a few tires and this is the first one we have successfully culminated,” said Peter Reichard, one of two managing directors of Tryon Capital Ventures of Chapel Hill, N.C., which represented Wealth Spring in the transaction.
“We were looking around and found it, and brought him down to look at it. He loves golf and I think he fell in love with the property and the opportunity.”
In addition to courses designed by Rees Jones, Dan Maples and Willard Byrd, the resort includes two golf clubhouses, a 50,000-square-foot convention center, 1,300 single- and multi-family homes, 600 stay-and-play villas and rental units, unsold vacant lots and approximately 190 acres of undeveloped land.
Reichard stepped in as Sea Trail’s chief executive officer on Tuesday and will remain in the position for the foreseeable future. He said the courses will remain open and no changes to the existing staff are imminent.
“At this point we feel [golf] is the backbone of the attraction and amenities there,” Reichard said. “We are not golf course managers, and Mr. Pan is not. We want to make this as smooth a transition as possible. We will keep everything and everybody on board and as we get settled we’ll evaluate everything. It’s Mr. Pan’s objective to create a first class facility.”
Reichard replaces Matt Smith of The Finley Group of Charlotte, N.C., who has been overseeing Sea Trail’s operation as the property’s bankruptcy court-appointed chief restructuring officer.
Sea Trail has been operated as an amalgamation of companies through much of its bankruptcy. Christovich and Associates, a Florida company that specializes in taking over at-risk golf properties for lenders and weathering them through tough times, has been responsible for golf operations and appointed Bill Shiles as the general manager.
A subsidiary of Charlestowne Hotels, a hotel and resort management company, has been operating or assisting with Sea Trail’s rental properties, golf packages and the convention center through the bankruptcy process.
“I don’t know that we’ll keep it that way, but we’re not changing anything on the near term,” Reichard said.
Head professional Eddie Pratt and the assistant GM Dana Connelly have endured from the pre-bankruptcy leadership.
“We’re not going in to slash and burn,” Reichard said. “Our commitment to [Wealth Spring] is to be there as long as it takes to stabilize and grow, to get it to a stable place then we’ll move on. Our job will be to get in there and get it turned around.
“… We sort of know where we want to take it. We’re going to come in and do some immediate upgrades, but nothing substantive until we go through a master planning effort.”
Reichard describes Pan as an industrialist who has varied interests, including real estate holdings primarily in China. “He’s done very well for he and his shareholders over there,” Reichard said. “He’s always been interested in something in the United States.”
An offer of $6 million for Sea Trail last month by a subsidiary of the private equity investment firm Cienda Partners of Dallas set the auction in motion. Prospective buyers had until June 12 to submit bids of at least $6.5 million, and two other companies did.
The third participant in the auction, Sea Trail Golf Company Inc, which was formed three weeks ago to bid on the property, offered the second-highest bid of $8.2 million. A North Carolina golf management business is believed to have created the company.
Cienda Partners will be reimbursed its $1 million deposit as well as a fee of $400,000 for being the opening bidder and conducting due diligence.
The $8.5 million sales price covers only about half of the approximate $16 million owed to First Community Bank (formerly Waccamaw Bank) at the time of the bankruptcy filing.
But some other creditors who are owed a total of several more million will also receive some payment, because the reorganization plan approved by an Eastern District of North Carolina bankruptcy judge late last year set aside some parcels of land and assets, including sewer taps, to benefit other creditors in the case.
“Early on in the case we resolved some issues about what property would be sold to pay the different categories of creditors,” said Laurie Biggs, an attorney with Stubbs & Perdue who represented Sea Trail in the case.
Some course members who are losing their golf memberships through the reorganization plan have objected to the plan and indicated they may file an unsecured claim for the lost memberships.
Sea Trail’s longtime owners – consisting of the members of four areas families who founded the resort in 1976 – filed for Chapter 11 bankruptcy protection from creditors in September 2011, and the plan of reorganization hinged on the property’s sale.
“We look forward to welcoming our new corporate parent moving forward with new energy,” said Sea Trail Homeowners Association president John Goodrich in a release.
Contact ALAN BLONDIN at 626-0284.