|By Josh McCann, The Island Packet, Hilton
Head Island, S.C.McClatchy-Tribune Regional News
Dec. 2, 2009--The fate of the bankrupt Daufuskie Island Resort & Breathe Spa should be clear by the end of the year, a spokesman for the trustee overseeing the case said Tuesday.
The resolution of the almost yearlong case could help shape Daufuskie, a sparsely developed 5,000-acre island accessible only by boat.
The case took two turns last week, when:
--A hearing to authorize the sale of "substantially all" the resort's assets was postponed for a second time at the request of trustee Robert C. Onorato, this time until Dec. 30.
--Onorato filed a plan to distribute proceeds from the resort's sale.
Onorato had hoped other potential buyers would emerge with legitimate offers exceeding the $49.5 million offered by Montauk Resorts of North Carolina, but none has, spokesman Tobin Spirer said.
Other potential buyers still can submit offers untilthe hearing, Spirer said.
"On Dec. 30, God willing, the court is going to transfer the assets to a purchaser," Spirer said. "No one in their right mind is going to stop this sale, because there ain't nothing better out there."
The sale hearing is 10 a.m. at the Beaufort Federal Building, 1501 Bay St.
Onorato's plan for the proceeds also is being reviewed by the court.
Onorato disputes all or part of two large secured claims, one for about $27.75 million by Carolina Shores LLC and another for about $34.6 million by Bill Dixon, a former owner of the resort.
Onorato's plan would leave about $12.45 million for unsecured creditors-- about 25 to 40 cents on the dollar for their claims. About 600 unsecured creditors have made claims for at least $16 million, Spirer said.
Spirer expects creditors to object to the trustee's plan. Such objections are not unusual, he said.
Although some creditors might not be paid in full, the trustee worked to secure the highest and best offer possible, Spirer said.
He said the sale would represent a significant milestone for Daufuskie.
"It will revitalize a place that's been lying dormant for years," Spirer said. "It's critically important to the island and its viability in the years going forward."
Once one of the island's largest employers, the resort includes two golf courses, tennis courts, several restaurants, the Melrose Inn, 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.
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Copyright (c) 2009, The Island Packet, Hilton Head Island, S.C.
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