Situation
In 2010 The Cliff Communities (“Cliffs”) obtained $64 million of financing from its members under a secured note offering. In early 2012, Cliffs was a conglomerate including six premier residential golf and country club developments situated in upstate South Carolina and southwestern North Carolina. Two
additional communities were under development. The master plan included 23,000 acres and over 9,000 residences. By early 2012 CCHG had been in default of the indenture governing its senior secured notes for several months and was in discussions with buyers to sell itself through a Chapter 11 plan process.
Action
GGG Partners took the role of Chief Restructuring Officer (“CRO”) along with supporting interim CFO functions to bring the Cliffs through the Chapter 11. The turnaround was accomplished by providing interim management services to stabilize the business while simultaneously running a formal sale process to sell the Cliffs to a group of investors pursuant to a Plan of Reorganization.
In a swift Chapter 11 process GGG was able to:
- Evaluate management and liquidity
- Operate the clubs and move core assets from non-club entities as needed
- Develop and meet budgets
- Work with counsel and other parties on an Asset Purchase, Plan of Reorganization and related
documents - Negotiate leases and other obligations
- Negotiate a difficult sale due to the nature of the creditors (members)
- Transition the business to the buyer
Results
GGG was able to sell the company through a Plan of Reorganization after only 6 short months. GGG stayed on to perform transition services as the interim CFO while the new buyers put their own management team in place.
TMA Turnaround of the Year Award
GGG then went on to receive the 2013 Small Company Turnaround of the Year award from the Atlanta Chapter of TMA.