The owners of Florida's Sawgrass Marriott Resort, the site of the US PGA Tour's Tournament Players Championship, has sought bankruptcy protection from creditors including Goldman Sachs Group.
RQB Resort listed assets and debt of US$500 million ($716 million) each in Chapter 11 documents filed this week in US Bankruptcy Court in Jacksonville, Florida. RQB Development also sought protection.
The resort is the home of the TPC Sawgrass golf club where Tiger Woods apologised last month for his marital infidelity. The 508-room hotel resort has rights to 85 per cent of starting times each day to the Players Stadium Course through 2089.
In July 2006, Goldman Sachs Commercial Mortgage Capital LP helped finance the US$220.5 million purchase of the 65-acre resort by RBQ Resort and RBQ Development.
TPC Sawgrass, which didn't file for bankruptcy, is the headquarters of the US PGA Tour. Its Stadium Course, built to accommodate spectators, hosts the tour's Players Championship. The tournament has a US$9.5 million purse.
The course is known for its 17th hole. Architect Peter Dye, a member of the World Golf Hall of Fame, placed the green on an island in a small lake.
It has since become a magnet for pro and weekend golfers, who hit some 120,000 balls each year into the surrounding water.
The course was ranked ninth on Golf Digest's list of America's 100 Greatest Public Courses for 2009-2010.
RQB Resort is the owner of the hotel and cabana club. RQB Development is the owner of the golf villas, the spa and related development rights.
"The current economic recession and associated disruption in the debt and equity capital markets have been extremely challenging for the debtors," RQB said in court papers.
The resort is the exclusive partner to the PGA Tour's Tournament Players Club at Sawgrass, known as TPC Sawgrass, court papers show.
The new owners spent US$30 million upgrading the resort, according to court filings. Sales rose 10 per cent in the first full year. Then the economic decline reduced the number of conferences, which account for 65 per cent of sales.
The resort's revenue for 2009 was US$42.6 million down from US$56.7 million the previous year, according to court papers.
Goldman, which is owed about US$192.5 million as of January 10, hasn't been paid since August.In June, the owners hired Perella Weinberg Partners to broker a solution with Goldman. In October, Goldman told the owners it wanted to foreclose.
After talks, the owners hired Jones Lang Lasalle to raise capital to help pay Goldman. The capital raising "was significantly compromised" when Goldman issued "without notice" an acceleration note on December 14 and filed a foreclosure complaint in state court on or about January 8.
Jones Lang Lasalle "has generated several qualified investors, but has not yet had an adequate time to test the market place for additional investors," court papers show.
The owners said the company may emerge from Chapter 11 "in time for the stabilisation of the economy in 2011."