|By Josh McCann, The Island Packet, Hilton
Head Island, S.C.McClatchy-Tribune Regional News
September 25, 2009 - The bankrupt Daufuskie Island Resort & Breathe Spa has at least one qualified potential buyer.
A bankruptcy court judge on Thursday scheduled a hearing for Oct. 28 in Beaufort to consider trustee Robert C. Onorato's motion to sell "substantially all" the company's assets.
Montauk Resorts of North Carolina has offered $49.5 million, but its offer is subject to qualified competing bids that would trigger an auction, according to court documents.
At least four other potential buyers are reviewing or preparing bids, Onorato said Friday.
A judge's order Thursday established procedures for the sale.
Any offers after Montauk's must be at least $50.1 million, and any subsequent offers must be at least $100,000 more than the previous highest bid.
To continue with its bid, Montauk must put down a deposit of $250,000 that is due Monday and would be refundable through Oct. 21, Onorato said.
Montauk is managed by former NFL-player-turned-developer Mike Bass, said Chuck Scarminach, a Hilton Head Island attorney who represents the company.
Bass could not be reached for comment Friday.
Bass tried to buy the resort about three years ago, but was rebuffed by its owners, Onorato said.
He lives in Gainesville, Fla., and plans to move to the area if his latest bid is successful, Onorato said.
Onorato said Bass wants to restore the resort's first-class status.
"We're going to sell this thing one way or the other by the 28th," Onorato said. "Right now, he's the odds-on leader."
A new owner could be in a position to help determine the future of Daufuskie, a sparsely developed 5,000-acre island south of Hilton Head Island that is accessible only by boat.
Once one of the island's largest employers, the resort includes two golf courses, tennis courts, several restaurants, the Melrose Inn and an equestrian center and entitlements to develop more than 500 residential and commercial parcels.
The Melrose Co. built the resort in the 1980s. The resort has changed hands several times, most recently when Gayle and Bill Dixon of San Francisco bought it in 2002.
The Dixons' Daufuskie Island Properties, which owns the resort, filed for bankruptcy in January, listing $88.2 million in liabilities and $97.1 million in assets.
Onorato was named trustee in March. Since then, he and his representatives provided information to scores of potential buyers and met with more than a dozen, according to a motion Onorato filed Sept. 15. He and a broker continue to talk with other potential buyers, all of whom are being encouraged to submit competing bids, according to the motion.
Montauk's offer is "the highest and best offer received by the trustee to date," according to the motion.
If that bid succeeds, Bass would get the resort at far less than its replacement cost, but he would have a lot of work to do before it can thrive, Scarminach said.
"He just sees it as a real gem," Scarminach said. "I'm sure he's smart enough to figure it all out."
Once a sale is made, the resort could reopen with an investment of $8 million to $13 million, Onorato said.
Onorato characterized Bass as soft-spoken, big-hearted and ideally suited to the task of operating within an often-divided island community.
"A nicer person you'll never meet," Onorato said. "He's the right personality for this, provided he's got all his ducks in a row."
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Copyright (c) 2009, The Island Packet, Hilton Head Island, S.C.
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