Spanish Trail golf club resolves bankruptcy
Moments before an in-court auction scheduled for Tuesday afternoon, the Spanish Trail Country Club Inc. resolved its Chapter 11 bankruptcy by ceding ownership of its land and facilities to its main lender in return for continuing to operate as it has for the past quarter-century.
The terms call for Hermitage Management LLC, a unit of mortgage holder Jackson National Life Insurance Co., to take title of the prestigious golf and country club and cancel a $17.9 million debt. Jackson National will lease the property back to the nonprofit club and give members an option to buy it back within four years for $7.5 million.
The club will also agree not to file another bankruptcy case should it run into financial trouble again.
"We're back in business and accepting members," said Bill Paulos, a principal of Cannery Casino Resorts and Spanish Trail member who made a $6 million offer. "The lender is happy. The club is happy. The homeowners association is happy. It's a great kumbayah day."
Many of the 30 members at the hearing shook his hand or hugged him afterward; one male member kissed him.
"He forced (Jackson National) to make the deal because he wouldn't pay more than he thought it was worth," club board President Mark Hedge said.
Jackson National's attorneys did not comment.
On Monday night the company submitted court papers promising to bid at least $7 million and hire an outside manager for the 249-acre club, with its 27-hole golf course, swimming pool, tennis courts and dining room.
Jackson National indicated that it valued the club, surrounded by the separate Spanish Trail gated community, at $10 million.
The club's troubles started five years ago, when it borrowed $15 million from Jackson National for renovations. As the recession started to bite and drive golf courses across Las Vegas into the rough, the high-priced Spanish Trail saw membership decline by about half.
The club defaulted on the loan in July 2010, but went nowhere in restructuring the debt. Although the club produced positive cash flow on operations, Jackson National's move to foreclose triggered the bankruptcy in August 2011.
Since then, club leadership slashed dues and say membership has started to rebound, though they did not provide numbers. They also acknowledge exclusivity no longer works, as the club will cast a wide net for new members.
Contact reporter Tim O'Reiley at
toreiley@reviewjournal.com or 702-387-5290.
