MARVIN, N.C. -- A business development consultant with Firethorne Country Club says the club's owners are shocked that its lender has asked the courts to appoint a receiver to run the property.
The club had Textron Financial Corp.'s approval to try to raise money to repay its debts and invest in its future but then the lender blindsided them because it is losing money itself, said Steve Holmes.
They have retracted from their verbal assertions of working with these folks and blindsided them with some very harsh legal motions, said Holmes, of Signature Coastal Development of Matthews, which has been working with the club since September.
The club and its owners, Howard Nifong and M. Keith Bell, are not insolvent as Textron has claimed in court documents, Holmes said. The club and its management also have been mischaracterized in court filings that say the borrower has misappropriated revenues, he said.
Holmes talked to the Observer in response to stories about how Rhode Island-based Textron has started foreclosure proceedings on the property in Marvin, 5 miles south of Ballantyne. A hearing on Textron's emergency request for a court-appointed receiver is scheduled in federal court in Charlotte on Monday.
Like many country clubs across the country, Firethorne has faced financial difficulties during the recession, Holmes said. But, he said, the club was working on a plan to pay back its debt, boost working capital and invest more money in equipment and sales. The club had a very cordial agreement with Textron to extend them the time to get it done through the end of the year, he said.
Last week, Textron started foreclosure proceedings, saying the club owed $5.5 million on an $8 million loan and that the club hadn't made any payments since June. The company asked for a receiver, in part saying foreclosure proceedings could take longer and result in the club's temporary closing because the property is in both Carolinas, according to court documents. The lender has asked the court to appoint Atlanta-based GlassRatner Advisory & Capital Group as receiver.
Asked Tuesday its intentions with the club, Textron said in a statement Wednesday: The appointment of a receiver is necessary to operate and preserve the property as a going concern, to maximize its value, and to keep the property open and performing during the anticipated multi-state foreclosure process.
An increasing number of golf courses across the country have been foreclosed on or filed for bankruptcy protection in recent years as membership has waned and owners have been unable to refinance.
Holmes said he believes Textron is acting in a predatory and poor manner as it looks to liquidate its assets in a down economy.
Textron, along with GE Capital and Capmark Financial Group Inc., once provided the bulk of financing for golf courses. But few companies are now lending to golf courses. Capmark filed for Chapter 11 bankruptcy protection in October.
Textron Inc., which owns all of Textron Financial's stock, announced in December 2008 that it would exit the commercial finance business, except for financing purchases of its products. The move included its golf mortgage business, which made loans for the acquisition and refinancing of golf courses, according to filings with federal regulators. The company has been aggressively working to liquidate holdings in the lines cut.
Textron Financial's golf mortgage loans outstanding last year dropped 21 percent, or $244 million, from 2008, according to securities filings. Charge-offs last year in the business jumped to $28 million from $2 million.
Textron's brands include Bell Helicopter, Cessna Aircraft and E-Z-GO, which includes golf cars. The parent company lost $31 million last year.
Textron has gobbled up golf courses in the Carolinas lately. In June, it took over two S.C. golf clubs - Eagle's Pointe and Crescent Pointe in Bluffton - and put them up for sale.
Last month, a court-appointed receiver seized control of Bermuda Run Country Club near Winston-Salem at Textron's request. The man who controlled the company had defaulted on an $8 million loan guaranteed by the club.
Firethorne faces additional money problems. The IRS filed a lien against the property in November because the club failed to pay more than $1.5 million in payroll taxes. And last month, builder and developer Harry Grimmer won a $1.6 million judgment against Firethorne owner Sunbelt Financial Group and Nifong and Bell. The judgment stems from a lawsuit filed by Grimmer claiming Nifong defaulted on a separate loan.
Holmes declined to address the IRS debt but said he continues to work on building a comprehensive business plan that would not only pay down all debt but position Firethorne to grow and thrive in the long-term. He said Nifong and Bell are devastated by the developments.
It's an unsubstantiated attack on their principle, their business practices, on their morals, on themselves, Holmes said.
Firethorne Country Club member and Marvin councilwoman Terri Patton said she had no idea the club was in financial trouble. She said the club is a valuable community asset and helps raise awareness about the 4,000-person town. The club, which regularly hosts fundraisers, often asks how it can help the community, she said. The club and town are so intertwined that golf clubs were incorporated into the town's seal to signify the development's importance.
According to the town, Firethorne paid its $1,000-plus personal property tax bill in full last week.
Staff writer Stella Hopkins contributed.
