View Mobile Site
 

Ask the Expert

Signal Photos

 

Players Club in bankruptcy

Members unsure whether their money could be lost

Posted: October 4, 2008 8:03 p.m.
Updated: December 6, 2008 5:00 a.m.

Golfers practice teeing off at the Tournament Players Club in Valencia on Friday. The club's parent company, LandSource Communities Development, LLC., has filed for Chapter 11 protection.

 

In these times of big bailouts and bankruptcies, it’s hard to make par.

For the Tournament Players Club at Valencia golf course it means delivering a high standard of quality at the front door while coping with bankruptcy issues unfolding in the back room.

Ever since 16-time PGA Tour event winner Mark O’Meara smashed the first golf ball off the tee on June 26, 2003, TPC at Valencia became the anchor of the West Ridge community.

From that sunny moment, when the shutters were opened on a vista that looks east over Santa Clarita atop layers of low rolling hills by Stevenson Ranch, the club made a name for itself as a member of the prestigious PGA Tour.

Its name, however, is included on a less prestigious list of debtor companies itemized June 8 by its parent company LandSource Communities Development, LLC. when it filed for Chapter 11 protection in a U.S. bankruptcy court on the East Coast.

Newhall Land & Farming owns TPC at Valencia and LandSource owns Newhall Land.  Both local companies were included in the debtor company list filed by LandSource.

On Friday, TPC at Valencia takes center stage at the LandSource bankruptcy hearings in Delaware.
At issue is the club’s Membership Deposit Refund Program which allows members to cash in their memberships.

In a season of unprecedented bailouts and bankruptcies, LandSource lawyers hope to get a mini-bailout of sorts when they ask the judge for permission to keep the club’s membership program going while trustees wrangle with how to pay millions of dollars to hundreds of creditors.

If TPC at Valencia is the heart of West Ridge, then its members — many of whom live near the course — are its life blood.

Newhall Land notified TPC members that their membership money tops this week’s agenda in bankruptcy court.

“We’ve notified members and we absolutely value their commitment and fully intend to honor their memberships,” said Marlee Lauffer, director of communications for Newhall Land.

LandSource lawyers fear a run on memberships similar to a run on banks when people with money at stake feel their investments are threatened.

Members are key
An avalanche of members demanding their money back would be disastrous for the club, LandSource lawyers argue in their motion.

The Tournament Players Club at Valencia boasts about 330 members.

Memberships range from a Junior rate of $25,000 demanding monthly dues of $380 to a Corporate membership valued at $65,000 requiring a $485 a month paid in dues to corporate designees.

If all memberships were held by junior members, it would amount to as little as $8.25 million. If all were corporate members that amount would be more than $21.4 million.

She said membership money was not placed in a fund.

“The membership money goes into the operating budget,” TPC spokeswoman Marlee Lauffer said. “It pays the cost of maintaining the club.”

Through their memberships, TPC members are subsidizing costs to maintain the course and defining a lifestyle for West Ridge.
“The TPC is a very high-standard golf course,” Lauffer said.

‘Just hope and pray’
Maintaining that high-standard in these tough economic times is challenging for most residents and businesses in Santa Clarita Valley.

More than a dozen of TPC’s neighbors who share the same 91381 zip code declared bankruptcy, with 68 of its neighbors in foreclosure and another 86 facing foreclosure, according to www.foreclosure.com.

Don Fleming, general manager of Valencia Acura, signed up as a TPC member the minute the first golf ball left the tee.

“It seems like all businesses are affected these days. Of course, it’s a concern,” he said about the  bankruptcy. “I just hope and pray that nothing goes wrong.”

Comments

Commenting not available.
Commenting is not available.

 
 

Powered By
Morris Technology
Please wait ...