Members might bail out Federal Club

A group of members at an upscale golf club in Hanover County has started studying how to buy the golf course if the current owners/operators can’t turn the business around.

According to two members at the Federal Club who spoke on condition of anonymity because of the early stage of the negotiations, the members are hiring a lawyer and negotiating with the Bank of Essex, which is owed about $8 million and has asked the bankruptcy court to end the bankruptcy protection. If that happened, the bank would likely foreclose on the course and operate it until it can find a buyer.

The $9 million, Arnold Palmer-designed course opened three years ago and has never been profitable. It is currently not paying its loan to the Bank of Essex. On March 24, a judge will rule on whether the Federal Club can remain in bankruptcy protection and continue to stave off creditors. (You can read more on that in an RBS story here. )

“Hopefully the current owners can emerge from bankruptcy protection. But from what we see in the public filings, we are concerned they may not be able to do that,” said one member. Read more

Bank makes play to take over golf course

The biggest lender to an upscale golf course in Hanover County wants to take the course back from the owners/operators.

Essex Bank, which is owed about $8 million and is not receiving payments, filed a motion in bankruptcy court Wednesday asking a judge to remove the Federal Club from bankruptcy protection.

“The Bank intends to assume management of the Golf Course, the surrounding property, and intends to fund the Golf Course’s on-going operations until a buyer can be found,” the filing says. Read more

Federal Club lets public tee up

A struggling upscale country club in Hanover County is now open to the public, but the change of course might come too late.

The Federal Club, which filed for Chapter 11 bankruptcy protection in October, opened last week to golfers who pay to play the Arnold Palmer-designed course. Greens fees are $65 in the off-season and will rise to $75 in April ($95 on the weekends).

For comparison, the Independence Club is $60 for a weekend during the off-season, and Kingsmill’s River Course is $90 during the off-season and $160 starting in April. Read more

Golf course files bankruptcy

The Federal Club, a $9 million Arnold Palmer golf course and upscale housing development in Hanover County, has filed for Chapter 11 bankruptcy protection.

The course, which opened three years ago, lists assets of less than $50,000 and liabilities of between $1 million and $10 million, according to the bankruptcy filing. The company owes $4.96 million to unsecured creditors, many in Richmond. Read more

Monday Q&A: Ray Tate’s new game

For the rest of the month, BizSense will be running periodic stories about the business of sports. Please send us related news tips.

Eight years ago, Ray Tate, a former head football coach at the University of Richmond and a longtime entrepreneur, helped assemble 625 acres in Hanover County and spent $9 million building The Federal Club. The private country club opened three years ago as one of the only courses around with bentgrass, a mark of quality for golf nuts.

But then the economy turned south, and sales of home lots slowed dramatically. Read more