Oct. 21, 2010--Last week, just one day after the PGA Tour completed a tournament at the Sea Island resort in Georgia, a deal was reached to sell the property and resolve its Chapter 11 bankruptcy case.

But as the Nationwide Tour brings a golf tournament this week to the TPC Sawgrass club in Ponte Vedra Beach, a resolution to the Chapter 11 case of the neighboring Sawgrass Marriott Golf Resort & Spa is likely months away.

Sawgrass Marriott's owners filed for Chapter 11 bankruptcy in March and its reorganization plan is in limbo over a dispute between the resort's owner and its major lender over the value of the property.

The resort's facilities include a hotel with 348 guest rooms and three restaurants, golf villas with 160 rooms and a beach club with three restaurants. The PGA Tour's TPC Sawgrass golf club is not part of the resort, but Sawgrass Marriott is an exclusive partner to the golf club, giving resort guests access to the golf courses.

Sawgrass Marriott General Manager Jeff Mayers said the Chapter 11 case doesn't seem to be having an impact on the level of business or the level of service.

"The resort's operations have been very consistent," he said.

The resort is owned by two Irish investment partnerships called RQB Resort LP and RQB Development LP. They bought Sawgrass Marriott for $220 million in 2006 with financing from Goldman Sachs Commercial Mortgage Co. and still owe $193 million to the lender.

But after the recession, the property is now worth far less than the loan amount. Just how much less has been a subject of a bitter court fight between RQB and Goldman Sachs. And until that matter is settled, the Chapter 11 case in U.S. Bankruptcy Court in Jacksonville can not be resolved, RQB says.

"It's a complex asset to value," said Stephen Busey, a Jacksonville attorney representing RQB.

"Once the court determines what the hotel is worth, then we can propose a [reorganization] plan," he said.

Goldman Sachs spokesman Michael DuVally said the firm would not comment on the case.

Even after the Chapter 11 filing, which protects the filer from lawsuits, Goldman Sachs filed a motion in April to foreclose on the resort. But that motion was denied by U.S. Bankruptcy Judge Paul Glenn in June. In court arguments over that motion, Goldman Sachs said an appraisal of Sawgrass Marriott valued the property at $135 million, while RQB placed the value in the $90 million to $100 million range.

A hearing was scheduled in August to determine the proper value. But RQB asked to postpone it, saying in a court filing that Goldman Sachs had withheld information requested by RQB. Glenn agreed to continue the hearing until Oct. 1.

But before the rescheduled hearing, Goldman Sachs asked for a postponement, saying in a court filing that RQB and its investment advisor had failed to timely produce documents. Glenn continued the hearing until December. He also extended RQB's deadline to file a reorganization plan until April 2011. So the bankruptcy case may be several months away from conclusion.

Sea Island Co.'s Chapter 11 case has gone much quicker. The resort owner filed for Chapter 11 in August and at an auction last Monday in U.S. Bankruptcy Court in Brunswick, Ga., an investment group agreed to buy Sea Island for about $211 million. A hearing to confirm the sale and end the Chapter 11 case is scheduled for Nov. 4.

Another resort near Jacksonville also recently settled a Chapter 11 case. The owner of the Omni Hotels & Resorts chain won a bidding war in August in U.S. Bankruptcy Court in Jacksonville to buy the Amelia Island Plantation for $67.1 million. Amelia Island Co. had filed for Chapter 11 in November 2009.

[email protected], (904) 359-4308

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