Tuesday, November 17, 2009

Amelia Island Plantation files for Bankruptcy

Amelia Island Plantation resort said it will continue to operate while it reorganizes under Chapter 11 bankruptcy, aided by an investment deal with residents of the island.

Amelia Island Co., which operates the Nassau County resort, filed for bankruptcy Friday in Florida’s Middle District of U.S. Bankruptcy Court. A judge immediately issued an order that will allow operations to continue while it reorganizes its finances.

The company said it would not have sufficient cash to meet its Nov. 20 payroll without access to a debtor-in-possession loan facility. It employs more than 825, down 275 positions from its staffing level prior to the recession.

Amelia Island Co. said it had signed an agreement with a group of of wealthy investors who own homes at the Plantation to provide it with $18 million to $20 million debtor-in-possession financing. The Red Leaf Investors, led by long-time resident Robert C. Smith, will provide funding as well as long-term strategic and asset management services in an effort to enhance operations and improve financial performance.

“This debt restructuring will pave the way to the profitable operation of our resort," Jack Healan, president of Amelia Island Plantation, said in a release. "They are providing immediate interim financing with the intent of becoming long-term equity partners in the Company, which we welcome."

Amelia Island Co. also disclosed in its court filings that it is working a deal with Metropolitan Life Insurance Co. to purchase the Amelia Inn, the conference center, spa and two golf courses, Ocean Links and Oak Marsh, for $43 million.

The Plantation has been struggling with slowing occupancy of its rental units and a stagnant leisure and business travel industry since at least October 2008, when it began to suffer from a significant negative cash flow. Revenues have fallen from $75 million in 2007 to an estimated $57 million this year. Profits have fallen from a $7 million profit in 2007 to a “substantial loss” in 2009, according to court documents.

The bankruptcy proceedings follow a failed $60 million investment effort earlier this year with Atlanta-based Redquartz Developments Atlanta, which would have injected much-needed funding for operations of the 1,350-acre resort.

The company estimated assets to be between $50 million and $100 million, equivalent to its estimated liabilities. The filing attached 23 pages of creditors.

“AIC anticipates that the severe decline in business meeting, vacation travel and the real estate brokerage business is not permanent and that its business will recover by 2011,” the company stated in court documents.

The Plantation includes a 249-room oceanside hotel, 49,000 square feet of meeting place, nine restaurants, 23 tennis courts and four award-wining 18-hole golf courses, among other amenities. Its 1,150 condos, 800 homes and 180 lots have an aggregate value of $1.95 billion, according to court documents.

John Holbrook - Realtor Amelia Island, Fernandina Beach & Yulee, Florida
Cell: 904-415-0171 Email: holbrook66@msn.com Web: www.nassaumls.net

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