Golf bankruptcy
What is the Meaning of golf Bankruptcy:
What is the meaning of the word golf bankruptcy? This is the first question that comes into the mind of reader at once. Thus, it is very important that we first understand the meaning of the gold bankruptcy. It relates to the filing of the bankruptcy protection by the golf course operator in the United States. The application for the bankruptcy protection was filed under the chapter 11 of the U.S bankruptcy law. Let us see who was the golf operator that files for bankruptcy in next part of our discussion.
The golf operator:
The golf operator that filed the application for the bankruptcy protection under the chapter 11 of the bankruptcy was the company Crystalin LLC. It is a company that controls the two areas of golf courses. These two areas are the Crystal Highlands in Festus and the other area is the Incline Village in Foristell. As there is the reason behind every company going for the bankruptcy, here also, there was a reason for the filing of the bankruptcy application. The reason was the sum of money that the company owed to its various creditors. The sum was around $9 million.
The other aspect that needs to be understood here is that the above named company is not independently run company and instead, it was being run by the St Louis based Sports and Fitness Management Corporation. This corporation was headed by Mark Beckham. This corporation also manages two other golf courses. Apart from this, it also heads eight health quarters of the various fitness centers across the nation. Even the Americas Exposition part situated at St Louis is also being managed by this corporation.
The filing of the bankruptcy application:
The application for the bankruptcy protection was filed by the corporation on February 22. The reason cited by the corp. at the time of filing the application was that it was the best available step in from of the corporation as far as the interests of various parties viz. Crystalin, its various creditors and the other parties involved.
The largest creditor of the Crystalin at the time of filing the application was Citizens National Bank, situated at Maplewood. The amount of money that was outstanding in the books was about $4.1 million at that time. The amount that the company owed to the Health quarters of Incline Village was about $2.7 million. There was also a claim of the Healthquarters of Crystal Highlands, which was about $1.2 million. Apart from these,
there was also a claim of Jefferson Bank in Eureka of about $965,000. This was not the all. The company also owed an amount of about $200,000 to the Sports and Fitness. These were the inter company loans that were made for the improvements of the golf properties. Thus, it can rightly be said that the company owed huge sums to its various creditors and this was the reason why the company filed for the bankruptcy under the chapter 11. Apart from all these, the Selma Properties, which is a unit of Union Pacific that owns the land where the Crystal Highland sits, was also a part of the deal. The value of the lease was however not specified.
The company also made the statement that neither the Crystal highlands nor the Incline village is being sold by the company and the operators of the golf course are not affected by the filing of the bankruptcy under the chapter 11 of the U.S bankruptcy law. All its customers had faith in the company. However, the company did not reveal the main force that compelled the company to file a bankruptcy protection application under the chapter 11 of the U.S bankruptcy law. The comments of the other golf course operators pointed out that it was due to the overloading of the various golf courses in the region.
As far as the golf courses are concerned, there was a rainy spring last year. Thus it affected the profitability of the golf course. To make the situation worse, there was also the economic downturn in the nation as well. These were basically responsible for the erosion of the profits of the golf courses. The Sports and Fitness witnessed a drop of between 7% to 10%. If the drop is calculated in terms of money, it was about $500,000 to $9.5million. Thus, it can be said that drop was drastic one and it is one of the main reasons for the company declaring for the bankruptcy.
Apart from this, the saturation of the golf courses in the area, about which we also talked about earlier, was also responsible for the bankruptcy filing. The bankruptcy filing by the company indeed gives signals to the other golf course operators in the region.
This was not the only case of bankruptcy filing by the golf operators. Another company known as the Family Golf Centers Inc. that owns the Hiland Park in Queensbury also filed for the bankruptcy.
So, it can be said that there were some golf course operators that filed for the bankruptcy protection under the chapter 11 of the U.S bankruptcy law. But the matter is very serious. There are not doubts about this, whatever is the reason. The other golf operators in the area are also having the same fears. Some of these golf companies are in the business of realty developing also and this is the reason why the appropriate attention is not being given to the various golf courses. With the number of golf courses increasing in the area and the last spring being the rainy one, the financial health of the various other golf courses is also not good. Thus, some immediate steps have to be taken to avoid the bankruptcy of more golf course companies and operators otherwise the day is not very far when there would be a mass bankruptcy declaration by the various golf courses in the United States.
Golf courses needs remedy:
After reading the above article, it is quite clear that the amount of money that the various golf course companies and the various other operators is increasing day by day whereas the profitability of these golf courses is witnessing a decreasing trend. Moreover, the presence of many golf courses in one area has also put pressure on the operating companies. All the golf course companies and the other related parties as well as the government should some find some way out before the golf companies collapses. This is what the golf bankruptcy was all about.
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