Following a brief hearing Wednesday morning, a judge placed two troubled Charlotte-area golf courses that owe creditors millions in the control of a third party.
The move sets the table for possible foreclosures on Skybrook Golf Club in Huntersville and Charlotte Golf Links on Providence Road. Hunting Dog Capital, a company specializing in business loans, is trying to recover almost $7 million it loaned to the two courses last year.
Owner Jeff Silverstein, a California businessman whose Carolina Trail golf courses have been dogged by complaints of unpaid wages and back taxes, did not appear in court to challenge his lenders on Wednesday.
Is there anyone here for the defendants? asked Superior Court Judge Yvonne Mims Evans. After lawyers and spectators looked around the courtroom, she determined that no one was there to represent the golf courses.
Evans ordered the golf courses placed in permanent receivership, a situation in which a company is found to be insolvent and a third party called a receiver is appointed to administer their business. Skybrook and Charlotte Golf Links were placed in temporary receivership late last week.
The failure of the defendants to appear and agree or disagree is sufficient cause to sign your order, Evans told attorney Andrew Tarr, of Robinson, Bradshaw & Hinson, who is representing the lender.
Silverstein did not return a phone message from the Observer seeking comment Wednesday.
In court, Tarr told Evans that since last week, Silverstein has continued to transfer money from the golf courses to other companies he owns. Such transfers would violate both the agreement with Hunting Dog Capital and a temporary restraining order issued last week forbidding anyone from transferring the courses property.
The defendants are insolvent, Tarr said in court. Despite the (temporary restraining order) ... they continue to disburse funds.
Silverstein controls the Carolina Trail courses, which also include Birkdale Golf Club, Highland Creek Golf Club, The Divide Golf Club, The Tradition Golf Club and Waterford Golf Club in Rock Hill.
After the hearing, court-appointed receiver Andrew Bolnick said he is still evaluating whether all employees at Skybrook and Charlotte Golf Links will be retained, and whether paid memberships will be honored.
Were going to take a look at all that, he said. Everythings being evaluated.
A golf professional who works at Charlotte Golf Links told the Observer he had been told memberships at the two courses would become invalid, possibly as soon as this weekend. According to the Carolina Trails website, memberships range from $1,495 for an individual annual membership to $3,990 for a three-year family membership.
Billy Casper Golf Management, the company brought in to oversee the golf courses operations, has declined to comment on what will happen with memberships.
Birkdale Golf Club was shut down briefly last month, after failing to pay $64,990 in state taxes. The club reopened days later after paying the money. According to court documents, lenders and vendors have also sued Birkdale, Skybrook and Charlotte Golf Links for hundreds of thousands of dollars worth of equipment and services for which they claim they were not paid.
Loans total $6 million
The latest round of troubles for Skybrook and Charlotte Golf Links stems from two loans totaling $6 million the companies took out from San Francisco-based Hunting Dog Capital last year.
According to the lawsuit, both courses defaulted on their loans twice by March this year. They also disregarded terms in the loan documents forbidding Silverstein or anyone else from depositing golf course revenue from Skybrook or Charlotte Golf Links in bank accounts other than those controlled by the lender.
Since March 2013, the (golf courses) have continuously disregarded the terms, the lender said in the lawsuit. Instead, the companies have continued to deposit revenue into deposit accounts ... other than the existing account and are making disbursements from the unauthorized deposit accounts without seeking authorization.
Most recently, the lawsuit accuses Silverstein of transferring at least $86,020 between May and July from the Skybrook and Charlotte Golf Links bank accounts to other companies controlled by Silverstein or to his employees.
Hunting Dog also provided the Charlotte Golf Links with financing this year when it couldnt meet its financial obligations, according to the lawsuit. On July 9, the company agreed to lend the course $16,666 as a cash advance to cover its rent. Two weeks later, Hunting Dog advanced it $75,389 to cover local property taxes it couldnt afford.
A July 22 email from Silverstein to Hunting Dog general partner Todd Blankfort said Charlotte Golf Links would repay the property tax loan, either out of operating cash flow and/or an investment that a new partner makes, according to the lawsuit.
None of the companys loans have been repaid, the lawsuit said.
It appears that the five other Carolina Trail golf courses are still operating normally. An emailed special sent Tuesday offered six rounds of golf for $99 at any Carolina Trail course not including Skybrook or Charlotte Golf Links.
Portillo: 704-358-5041 On Twitter @ESPortillo
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