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Daufuskie Island Resort & Breathe Spa Lays
 off Remaining Staff, Closes Doors
By Michael Welles Shapiro, The Island Packet, Hilton Head Island, S.C.McClatchy-Tribune Regional News

March 19, 2009 - The Daufuskie Island Resort & Breathe Spa closed its doors this week, laying off what was left of its skeleton staff.

A bankruptcy judge ruled Tuesday that a trustee will be appointed to manage the resort, which could lead to a reopening. A trustee has not yet been named.

"It could be two days or two weeks until a trustee is picked and the resort's back in business," said Russ Brown, chairman and CEO of RBC Enterprises, which develops and sells real estate at the resort.

Brown said owners Bill and Gayle Dixon of San Francisco shut down operations and relinquished control of the club, the latest twist in a complicated bankruptcy case that started in January.

As a result, the Melrose Inn, the Melrose golf course/club house, and ferry operations from Salty Fare on Squire Pope Road on Hilton Head Island have been closed.

In another development, the bankruptcy judge ruled last week that the Dixons could not sell or lease portions of the resort without the consent of a select group of resort members.

Rich Silver, a member involved in a lawsuit against the resort, and Brown both said a lender was willing to loan the Dixons money but only if the bankruptcy judge allowed them to sell or lease its assets freely. The judge would not allow that.

"As a result of this ruling, the one lender that was willing to lend (the Dixons) monies to keep operatingis no longer willing to make that loan," wrote Silver.

Brown said that after the lender pulled out, the Dixons agreed to let the court appoint a trustee.

Brown said having a trustee manage the resort is good news for everyone involved, including the Dixons' creditors.

"It means an independent party, not tied up emotionally, is selected to move forward the resort, which allows the best possible chances for the creditors ... to be paid back," he said.

Brown and Silver said they hope to see the resort, and in particular the popular Melrose golf course, open once a trustee is selected.

"Hopefully, a trustee will be appointed immediately and that trustee can take over very quickly and ensure that at least minimal operations are resumed," Silver wrote.

Brown said the sooner the trustee is named, the better.

Neither the resort members' attorney, Alexander Beard, nor the Dixons' bankruptcy attorney, Ivan Nossokoff, returned phone calls seeking comment.

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To see more of The Island Packet, or to subscribe to the newspaper, go to http://www.islandpacket.com.

Copyright (c) 2009, The Island Packet, Hilton Head Island, S.C.

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