South County GC Closed

Whyner

Russman wrote: »

But is that not what the liquidator will try to do ? He won't give a f--k about the viability or otherwise of the club.
Unless he's a golfer himself

What can he sell?

carman2011

russman, it depends what liquidator is appointed, the directors will propose a liquidator, who will act in the best interest of the club/directors/kavanaghs, all creditors including shareholders will have a vote to accept the directors liquidator or go down the more expensive and painfull road of attacking the club, breaking everything up and appointing their own aggressive liquidator.

carman2011

dangerous golfer wrote: »

No brainer in my opinion so.

I can play comps in SC, without having a DD set up to a millionaires bank account.

u can play open comps in SC, u wont be able to play medals, captains days, matchplays or inter club comps etc.

Russman

Whyner wrote: »

What can he sell?

I would have thought anything thats not tied down and that would find a buyer, which might be tough enough.
I know thats a worst case scenario, but it would be foolish not to consider it. It depends on how hard he wants to work at it.
The easy option may well be sell the machinery etc to the landlords or new "club", but equally for example, another club might want to get some cheap equipment.

Jacket111001

€ 150 by say 500 is € 75000

You can't run a golf course on that.

Running costs of SC are € 1 million approx.

Figures don't add up.

GreeBo

carman2011 wrote: »

russman, it depends what liquidator is appointed, the directors will propose a liquidator, who will act in the best interest of the club/directors/kavanaghs, all creditors including shareholders will have a vote to accept the directors liquidator or go down the more expensive and painfull road of attacking the club, breaking everything up and appointing their own aggressive liquidator.

I guess this was my point.
The creditors want their money back. Strip all the assets for whatever money you can get for them. The Kavanaghs might have to accept the clubhouse for example in lieu of their loans, but thats assuming the liquidator gets as far as the Kavanaghs, how much is owed to revenue?

Unless it can be proven to the creditors that keeping the club as a going concern is the best way for them to get their money back then I reckon it would be sold off. I would still pay the cash to get golf until the end of the year but...

dangerous golfer

As Jacket says, the figures do not add up.

Playing medals and captains days are the least of my worries for the time being.

GreeBo

Whyner wrote: »

What can he sell?

The kitchen for example. You might get €15k for that depending on the size, quality. Any machinery, supplies, you could strip the greens and sell them as sods if needs be.

one ill cat

dangerous golfer wrote: »

No brainer in my opinion so.

I can play comps in SC, without having a DD set up to a millionaires bank account.

That's not technically true. Your handicap is valid on the basis you are a member of a golf club which will be maintaining your handicap. If you are no longer are a member of SC, you will have to transfer your handicap elsewhere or else it will lapse.

Last night, what was discussed was the payment of GUI/ILGU subscriptions, which is something else entirely.

matt-dublin

this will likely be only for the remainder of the calendar year and for course maintenance and insurance only.

Once the next calendar year kicks in members will likely be required to pay a fuller membership sum closer to 1500-2000.

The club for the remainder of this year will run at limited functionality.

The liquidators cant really sell the land or clubhouse because technically it all belongs to the kavanaghs

GreeBo

carman2011 wrote: »

the whole point of the liquidation is that the debts die.
the company is being wound up, so whatever assets their are deemed to be, ie cash on hand, the clubhouse etc, is divied out the creditors.
the preferrential creditors are paid first, this would be redundancies to the staff, then revenue, then the bank, the shareholders are paid last.
The revenue and bank will have to take a hit, its very unlikely there will be anything left to give to the shareholders.
The balance of negative reserves dies when the company is finally wound up.

Also, the 70 per month is just for this year, given 600 members, i would imagine they will charge about 1,100 to all for next year.

the clubhouse is on the land owned by the kavanaghs, who would control all access rights. The best course of action imo would be for the liquidators to sell the clubhouse to the kavanaghs.

(the revenue will usually accept the directors choice for liquidator, as will the bank, it would be in the best interest of all concerned to allow a liquidator who will not tear up the course etc, (all this will do will get more money for the revenue/bank, and knacker the club going forward imo))

with a clean and quicker liquidation, the new proposal will be up and running quicker and we can all be back playing golf on the course soon under this new proposal.

also, the wage bill in our 2011 accounts, including wages to greenkeepers and staff was 466,942 (including social welfare costs), not sure where u got the 1m from.

Someone mentioned 1M earlier in the thread, but even if its .5m. That just got ate your income for this ear.
The debts dont just vanish, they get paid off out of the assets. So now you have no machinery, no kitchen, no trolleys, no printer etc etc etc.

But even ignoring any stripping of assets the liquidator does, how does the club survive for the next 7 months with an income of 0.25m (assuming 500 members pay...which I think is a huge assumption) At current rates thats not enough to pay your wages bill. So you now need to do the same amount of work with at most half the people and possibly no machinery for the course...

You are already building up a lovely overdraft/debt just on day to day expenses which will cripple the club next year. Without a healthy income you cant have large loans, which means no capital expenditure. No new machinery. No urgent drainage works. No bunkers being rebuilt. Which means people are not happy paying the same money for a lesser product.

I'm sorry lads, unless <someone> is willing to invest 2m upfront I just dont see it. Hope Im wrong.

GreeBo

matt-dublin wrote: »

this will likely be only for the remainder of the calendar year and for course maintenance and insurance only.

Once the next calendar year kicks in members will likely be required to pay a fuller membership sum closer to 1500-2000.

The club for the remainder of this year will run at limited functionality.

The liquidators cant really sell the land or clubhouse because technically it all belongs to the kavanaghs

The land does, but does the clubhouse?

one ill cat

Jacket111001 wrote: »

€ 150 by say 500 is € 75000

You can't run a golf course on that.

Running costs of SC are € 1 million approx.

Figures don't add up.

The running costs are not €1 million. It was costing approx €300k to maintain the course, approx €150k in rent to the landlord and €60k on interest to the bank. There are obv utility bills outside of that as well as staffing & restaurant, but then I guess that's up to the Kavanaghs of how much 'extras' they want to have.

Obv they won't be charging themselves rent & there won't be debit interest to be paid to the bank.

Russman

I really hope it works out for the SCGC members' sakes, but I can't see it happening as easily or straightforward as the plans seem.

If all this could be done as stated then almost every club in financial difficulty would try to do it to get rid of the €2m loan they all took out to build clubhouses in the good times, and now can't service.
Unfortnately in this country you can't just magic away debt with no consequences.

matt-dublin

the clubhouse is on the land which is in their posession.

if the company was wound up the liquidators could look to knock it down which would probably cost 100k. and is no benefit to anyone.

it all really depends on who built it as well but i don't really see the course or clubhouse being an asset.

one ill cat

GreeBo wrote: »

The land does, but does the clubhouse?

Whilst the club house was/is an asset of SC 2004 Ltd, it is built on land belonging to the landlords. The only access to this clubhouse is also via land owned by the landlords. Ultimately whilst the bank may have claim to this building, without access to it. it's useless to them.

I'm no expert, but I would have thought that the landlords will get the clubhouse back in their own name as part of the liquidation. Ultimately it'll not be bought by anyone else as it's useless to them unless you want to dismantle it brick by brick & move it somewhere else.

That's not to say there are fixtures within that building that could be sold off, kitchen equipment, furniture etc.

Russman

one ill cat wrote: »

The running costs are not €1 million. It was costing approx €300k to maintain the course, approx €150k in rent to the landlord and €60k on interest to the bank. There are obv utility bills outside of that as well as staffing & restaurant, but then I guess that's up to the Kavanaghs of how much 'extras' they want to have.

Obv they won't be charging themselves rent & there won't be debit interest to be paid to the bank.

Even just the €300k upkeep of the course, for 6 months left in the year thats €150k, still double the theoretical €150 x 500 estimated earlier.

Russman

one ill cat wrote: »

Whilst the club house was/is an asset of SC 2004 Ltd, it is built on land belonging to the landlords. The only access to this clubhouse is also via land owned by the landlords. Ultimately whilst the bank may have claim to this building, without access to it. it's useless to them.

I'm no expert, but I would have thought that the landlords will get the clubhouse back in their own name as part of the liquidation. Ultimately it'll not be bought by anyone else as it's useless to them unless you want to dismantle it brick by brick & move it somewhere else.

That's not to say there are fixtures within that building that could be sold off, kitchen equipment, furniture etc.

That would be a good outcome, but will the landlords buy it ? (or can they afford it ?)

Also, I'm no legal eagle, so am open to correction, but I dont think the landlords can simply say "you can't have access to your asset which is on my land" - thats stealing
There's surely some right of way issue with the driveway ?

matt-dublin

Would this be a leasehold agreement? Would the landlord in this case not be entitled to everything on the land at the time of closure?

this would also explain removal of the machinery etc.

one ill cat

Russman wrote: »

Even just the €300k upkeep of the course, for 6 months left in the year thats €150k, still double the theoretical €150 x 500 estimated earlier.

It's not €150 x 500, whoever came up with that is wrong. A lot of people paid by direct debit so they will be paying a total of €490 each up until the end of 2012 and those that paid up front will be paying €150 total each.

I also believe that once things are up and running again, assuming the course is well maintained that people will be banging down the door looking in for €70 per month until the end of the year.

I think the estimate of next years subs being €1500-2k are too high, although time will tell what they will be & obviously that could well depend on how many people go back/join as new members over the next few weeks.

Also, the landlords have gained the asset of a golf course, & ultimately it'll be their business what their bottom line is.

TheGrump

one ill cat wrote: »

Whilst the club house was/is an asset of SC 2004 Ltd, it is built on land belonging to the landlords. The only access to this clubhouse is also via land owned by the landlords. Ultimately whilst the bank may have claim to this building, without access to it. it's useless to them.

I'm no expert, but I would have thought that the landlords will get the clubhouse back in their own name as part of the liquidation. Ultimately it'll not be bought by anyone else as it's useless to them unless you want to dismantle it brick by brick & move it somewhere else.

That's not to say there are fixtures within that building that could be sold off, kitchen equipment, furniture etc.

No need to dismantle it. The liquidator could sell it off to a third party and they could rent it back to whichever golf club exists there in the future. Whether anyone would take this risk though is doubtful.

one ill cat

Russman wrote: »

That would be a good outcome, but will the landlords buy it ? (or can they afford it ?)

Also, I'm no legal eagle, so am open to correction, but I dont think the landlords can simply say "you can't have access to your asset which is on my land" - thats stealing
There's surely some right of way issue with the driveway ?

The building was built whilst they owned the land, I imagine the lease agreement will cover where they stand with regards to this. I'd be hugely surprised if the landlords were legally obliged to provide access to this building though.

matt-dublin wrote: »

Would this be a leasehold agreement? Would the landlord in this case not be entitled to everything on the land at the time of closure?

I would agree with this, but then it's certainly not my area of expertise.

matt-dublin

one ill cat wrote: »

The building was built whilst they owned the land, I imagine the lease agreement will cover where they stand with regards to this. I'd be hugely surprised if the landlords were legally obliged to provide access to this building though.


I would agree with this, but then it's certainly not my area of expertise.

It would explain why the machinary and other assets were removed overnight

one ill cat

TheGrump wrote: »

No need to dismantle it. The liquidator could sell it off to a third party and they could rent it back to whichever golf club exists there in the future. Whether anyone would take this risk though is doubtful.

This would need to be done with the cooperation of the landlords though as there was a clause in the lease meaning the land would revert back to them. Afaik that clause will stand & from their proposal their intention is to maintain the course themselves, not lease it out as a golf course to someone else.

Paulusmaximus

Paulusmaximus wrote: »

Would it be conceivable that the company which closed yesterday (SCGC), are going to walk away from whatever debts they have, and the same or similar people involved will set up a new company, rearrange a new lease with the landowners, buy machinery etc from the old company and offer a reduced membership fee to previous members, and start afresh next month?

Its not the first or last time i'd have seen this sort of practise in this country.

i have no basis for the above and its only a thought i had.

Above a post i made last week. Is this effectively what has happened? It's great for the joe soap members that they will still have a club and can get their golf and be part of a club, but the practise of people in business in ireland going into liquidation one day and reopening under a differen alias /company with debts cleared a few days later is ridiculous.

AldilaMan

It's highly unlikely that 500 members will cough up €150 each (or the DD equivalent for those paying by DD). Those that paid up front will certainly consider it as they will see their investment for the rest of the year gone. Those on DD will take a long hard look and not having lost any more than 1 month's payment may leave. If the projected income from the levy falls short you might well see a scenario where they're coming back in 3 months looking for another €150.

This is like buying shares where you see the price fall and decide to average down by buying some more shares. If the price of the shares fall further then you've lost more money and not saved any.

I personally would want some assurances that the golf club would continue till at least the end of this year and without recourse to the members for a further levy before parting with any more cash.

TheGrump

one ill cat wrote: »

This would need to be done with the cooperation of the landlords though as there was a clause in the lease meaning the land would revert back to them. Afaik that clause will stand & from their proposal their intention is to maintain the course themselves, not lease it out as a golf course to someone else.

Just to clarify, I was only refering to the clubhouse itself not the course. As in the liquidator could sell the clubhouse to a third party that then leases it back to the Kavanaghs who are running the golf course.

tiger14ki

Believe the Machinery was on
a Hire Purchase agreement so Liquidator should not be able to touch it

tiger14ki

Jacket111001 wrote: »

€ 150 by say 500 is € 75000

You can't run a golf course on that.

Running costs of SC are € 1 million approx.

Figures don't add up.

The plan going forward is to have enough revenue through the DD membership and new members just to cover the costs of the maintenance of the course. There is no Club Pro, no bar or restaurant staff - just the basi upkeep of the cousre in decent nik until we can get off the ground again

dangerous golfer

I just want to reiterate the best comment of last nights meeting, big shout out to the old boy Raymie.