After filing for Chapter 11 bankruptcy protection, Porters Neck Country Club will remain open as usual and seeks to restructure the organization to emerge stronger as a club, officials said.
“This was a difficult decision,” David Adams, president and chairman of the board of trustees at the club, said in a letter to club members. “After careful examination of all the possible routes forward, the voting board members unanimously determined it was time to take this path to ensure the continued operation of the club we all enjoy.”
Golf, dining, sporting, fitness or social activities at the country club, 8403 Vintage Club Drive, are not expected to be interrupted, and the club has not had any reduction in staff, Mandy Shuffler, director of membership marketing and communications with the club, said in an email Friday.
Some of the events and issues leading up to the bankruptcy filing include damage from Hurricane Florence and Hurricane Dorian, frequent isolated flooding events, litigation with the club developer since 2014 and having its membership initiation fees retained by the developer, according to the letter.
The club is working with Jason Hendren, a lawyer with Raleigh-based Hendren, Redwine & Malone firm, to represent it in the bankruptcy. According to the letter, Hendren has experience in bankruptcies involving private golf courses.
Efforts to reach Hendren for more information on what the club’s restructuring will look like were not successful as of Friday afternoon.
According to the Eastern District of North Carolina court filing Thursday, the nonprofit has at least 200 creditors.
The creditors that have the largest unsecured claims, which are not backed by assets as collateral, include some in Wilmington:
- Big Sky Design Inc., 4037 Masonboro Loop Road, $3,934
- Coastal Chemical & Paper, 2045 Corporate Drive, $4,777
- Diversified Energy, P.O. Box 10192, $5,967
- Port City Staffing, P.O. Box 7660, $10,528
Others list addresses in Raleigh, Atlanta and Charlotte:
- Chambliss & Rabil, Raleigh, $38,983
- Clubessential, Atlanta, $7,727
- Coca-Cola Bottling Co., Charlotte, $4,130
- Mid-Atlantic Specialties Inc., Raleigh, $30,932
- U.S. Foods, Charlotte, $19,163
The court filing does not include information on claims by secured creditors, or a person or entity that is an insider, such as relatives, general partners and directors or officers.
According to a 2018 IRS database, Porters Neck Country Club reported it had more than $10.7 million in assets, nearly $5 million in income and $4.78 million in revenue, at the time of the IRS filing.
While Hurricane Dorian did not cause extensive damage to most of the Wilmington region, it did leave more than 70 trees downed around the club, and water intrusion problems at the clubhouse and sports facility, the letter stated.
Hurricane Florence last year left the club with $7.5 million in losses, $6 million of which should have been covered by its insurance policy, according to a public adjuster, but the club received only $750,000 by Allied World Assurance Company, according to a civil action filed by the club in March.
The club reached an undisclosed settlement in its lawsuit against Allied World Assurance in August.
General Manager Jason Seehafer will continue in his leadership position, and McConnell Golf, a Raleigh-based golf owner and manager that has been operating the club since May, will also continue its management role at the club.
The only change that members will experience involves payment options, officials said.
The club has asked members to stop automated deposits and to send payments via mail because of the bankruptcy filing, which requires current accounts to be closed and new bankruptcy accounts to be opened.
One way that members can help the club is to continue to use the facilities and make purchases, according to the letter to members.
“The club relies on cart rental fees, greens fees, dining payments, pro shop sales and other incidental revenue that is received from your use of the club,” the letter stated. “This is the best way to support the club through this process, which we hope will be resolved as soon as possible.”
The club will host a meeting with club members to discuss the filing before the end of the year. For the court case, there will be a meeting of creditors Oct. 24 at Randy D. Doub Courthouse, 150 Reade Circle, Greenville.