Amelia Island Company

Amelia Island Co. in Chapter 11 bankruptcy

By Michael Parnell, News-Leader

Amelia Island Co. has filed for reorganization under Chapter 11 bankruptcy proceedings. There will be “business as usual” at the Amelia Island Plantation resort while the company reorganizes and firms up its finances.

Amelia Island Co. announced Friday it has signed an agreement with a new investor group, Red Maple Investors, LLC (RMI), to help ensure the future of the 1,350-acre resort.

The investor group, all residents of the island, "delivers immediate interim financing and long-term financial planning and expertise while assuring the uninterrupted operation of the resort," a press release stated. As part of the agreement, the Amelia Island Co. will restructure its debt and liabilities in bankruptcy court.

"We're pleased that RMI truly believes in our vision for the future, as well as our commitment to a resort community that exists in harmony with nature," said Jack Healan, president of Amelia Island Plantation, in the press release. "The resources they bring to our relationship will provide the continued high-quality service of the resort that our leisure and conference guests have come to expect when they visit us and that our club members and property owners enjoy every day."

RMI is a group of high net-worth Amelia Island Plantation homeowners investing in Amelia Island Co. with the goal of building a financially healthy company. The group was formed and is led by 19-year resident Robert C. Smith.

"Our investors believe in the potential for the long-term success of Amelia Island Plantation and are pleased to be able to provide the needed financial and strategic support to accomplish this in a professional and thoughtful way. All of us in RMI want to protect this little paradise we have come to love. And we are willing to put up our own money to assure its success far into the future," said Smith in the press release.

"This debt restructuring will pave the way to the profitable operation of our resort. They are providing immediate interim financing with the intent of becoming long-term equity partners in the company, which we welcome," said Healan. "We have a great group of people in RMI, and we look forward to the opportunity to deliver an even stronger customer experience as well as providing stable employment to our staff."

One of the RMI investors is John A. Griswold, president of Harbor Hotel Investors, LLC. Griswold has more than 30 years' experience in the ownership, operation and management of hotels and resorts.

There will be no "interruption" in Plantation management, employees were told, though changes are coming. The News-Leader has learned that longtime Amelia Island Co. vice presidents Norman Bray, who is retiring, and Richard Goldman, who has resigned, will be leaving before year's end. Goldman will become director of the Convention and Visitors Bureau in St. Augustine.

Employees were told in an e-mail distributed Friday that "the signing of the local investors and the restructuring of our debt in Chapter 11 is a very good thing for the company, our customers and our employees. It means business as usual. ..."

Employees were told there would be "adequate financing to sustain operations at current levels, including maintaining facilities and amenities like golf courses, tennis courts, restaurants, spa and shops.
"Staffing will be maintained commensurate with business levels.
"AIP remains an AAA 4-Diamond, independent resort."

Chapter 11 protection "will affect how much vendors and other creditors are paid on past invoices and debt. ... Those vendors who continue to do business with the Plantation will be paid on a current basis," the company wrote employees.

There have been numerous job terminations this fall, and remaining employees have had their pay cut 40 percent after mandatory furloughs.

Amelia Island Co. owns all of the resort and recreational facilities and amenities on Amelia Island Plantation, including the Amelia Island Club. Both are affected by the bankruptcy filing.

The Amelia Island Plantation Community Association is the homeowners' association under Florida law that owns, manages and maintains roads, common areas and provides for security, landscaping, drainage and the like. That association is funded by property owner assessments and is not directly impacted by the filing.

Plantation residents have been invited to informal coffees all next week at which representatives of the company and new investors group will explain the consequences of the changes.

A proposed merger with the Atlanta subsidiary of an Irish development company fell apart earlier this year as the economy soured. Redquartz Developments Atlanta, a real estate investment company affiliated with Redquartz Developments, Ltd., of Dublin, signed a memorandum of understanding in January that could have led to $60 million in improvements at the Plantation.

The deal was to give Redquartz Developments Atlanta 51 percent of equity in Amelia Island Co., giving it majority control. The Cooper family, which has owned the company since 1978, would have retained the remaining 49 percent.

The plan was to upgrade and expand the Plantation's infrastructure and increase the number of international visitors. There are plans to build new hotels and other amenities and to modernize current facilities, most of them dating back several decades, but they have not been implemented for lack of financing.

Richard L. Cooper, an Ohio businessman who died last year at 82, purchased the Plantation property from the Sea Pines Co., in 1978. Sea Pines Co., which developed Hilton Head Island, S.C., originally bought 3,000 acres on the south end of the island that was proposed for a strip mine but ultimately ran into financial difficulties in redeveloping it.

Healan was an accountant with Sea Pines Co., and he and Bray, also with Sea Pines, have been part of Plantation management for more than three decades. The company is now owned by the Cooper family trust.

Chapter 11 is the chapter of the U.S. Bankruptcy Code that permits reorganization and is not intended to lead to liquidation. While the company would not pay most of its debts at full value, its primary debtor is more likely to be repaid.

That is an arm of Prudential Financial Services Inc., which holds liens on much of the Plantation property and its buildings. Under the debtor-in-possession, or DIP, financing provided by law for companies in Chapter 11, Prudential's security is senior to other debts, equities or securities issued by the company and will be repaid first.

Prudential Financial Services Inc., headquartered in Newark, N.J., is a worldwide company with businesses in life insurance, annuities, retirement services, mutual funds, investment management and real estate services. Its brand symbol is the rock, inspired by the Rock of Gibraltar.

Story created Nov 13, 2009 - 13:16:30 PST.

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