Cliffs Club & Hospitality emerges under Silver Sun Partners ownership

By Caroline Salls

Pittsburgh, Aug. 28 - The Cliffs Club & Hospitality Group, Inc. emerged from Chapter 11 bankruptcy on Tuesday under the ownership of Silver Sun Partners, LLC, according to a news release.

Formed as a partnership between the Carlile Group, Arendale Holdings and SunTx Urbana, the company said Silver Sun Partners provides the Cliffs with the capital to deleverage, operate and improve a network of clubs and amenities.

"The collaborative effort of the Silver Sun partnership and the various stakeholders resulted in a swift resolution to an extremely complex transaction," Cliffs Club chief restructuring officer and GGG Partners, LLC managing partner Katie Goodman said in the release.

"I am confident that Silver Sun provides the depth of capital and management experience to best position the Cliffs for the future."

Effective immediately, Silver Sun Partners will begin club operations under the management of its subsidiary, Cliffs Club Partners, LLC, while leveraging real estate sales and marketing programs through another subsidiary, Cliffs Land Partners, LLC.

According to the release, the partnership has committed significant capital resources that will create immediate stability within the clubs while preserving and enhancing real estate values within the Cliffs Communities.

Cliffs Club Partners is also planning continued amenity improvement and development, which was halted during bankruptcy proceedings, the release said.

Plan details

As previously reported, Cliffs Club & Hospitality Group's plan of reorganization was confirmed on Aug. 17 by the U.S. Bankruptcy Court for the District of South Carolina.

Under the plan, indenture trustee secured noteholder claims will be satisfied through modification of the terms of the notes to provide for repayment of the $64.05 million principal amount without interest in 20 annual payments.

The payments will begin on the one-year anniversary of the plan effective date in the amount of the greater of $1 million or 50% of New ClubCo net cash flow, with a balloon payment of any remaining principal at maturity.

Creditor treatment

In addition, treatment of creditors will also include the following:

• Holders of administrative claims, professional fee claims, debtor-in-possession facility claims and priority tax claims will be paid in full in cash;

• The holder of the indenture trustee bridge loan claim will be paid in full in cash with interest;

• Holders of mechanic's lien claims and administrative convenience claims will be paid in full in cash without interest, costs or fees;

• Holders of other senior secured party claims will receive either cash, cure and reinstatement of equipment leases or the equipment subject to those leases;

• Holders of general unsecured claims will receive a share of a general unsecured claims fund, less a reserve established by a liquidation trustee for administration expenses;

• Holders of club member claims will have the option to join the new clubs or receive a share of a rejecting members fund; and

• Holders of equity interests will receive no distribution.

Travelers Rest, S.C.-based Cliffs Club owns luxury golf communities. The company filed for bankruptcy on Feb. 28, 2012 under Chapter 11 case number 12-01220.

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