Famous Island Getaway Packs its Bags for Chapter 11

By: Timothy McFarlin | Published: September 14th, 2010 | Category: Bankruptcy

The Sea Island Company, owners of a Georgia, luxury resort located on Sea Island and all of the island’s land, has filed for Chapter 11 bankruptcy protection in a Federal court located in Brunswick. The company says it plans to “emerge from Chapter 11 by selling its resorts, golf courses and private clubs”—for a hefty $197.5 million.

The company, which owns property off of the island limits on Saint Simons Island, in its filing, said it is unable to pay off more than $482 million in its debt for renovations and expansions which were completed nearly three years ago.

Sea Island has been host to the wealthy and famous.  Six years ago, former president George W. Bush hosted the G8 summit there and only four years later, in 2008, the Sea Island Co. let go of roughly 500 of its employees.

Then last year, it was announced the company defaulted on its loans, calling for banks to step in and restructure its loan package.  Also expressed in the company’s filings was the battle to pay off debts selling undeveloped land, during the country’s economic crash and slow recovery.

Last July, the company announced Synovus and Bank of America assisted in the restructuring of a $400,000,000 loan package.  Then, earlier this year, Sea Island defaulted on the restructured loan deal—making it the second default in less than a year.

Back in February, the company hired Goldman Sachs to develop financial plans and strategies including the potential sale of the company itself.  In going through Chapter 11 bankruptcy, it is selling its assets to Oaktree Capital Management as well as Avenue Capital Group.

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