Oct. 11, 2010--Bankrupt Sea Island Co. will go on the auction block today in Atlanta, moving the luxury resort operator closer to an end to 80 years of family ownership and to new ownership by an out-of-town partnership.

Whichever one of two partnerships emerges as the buyer from bidding that will increase in $1 million increments will bring a Northeast-West Coast view of ownership to the company.

The Jones Family that has controlled Sea Island Co. and its flagship The Cloister for three generations will yield ownership, possibly in November, to either a partnership of Oaktree Capital Management of Los Angeles and Avenue Capital Group of New York City or of Starwood Capital Group of Greenwich, Conn., and Anschutz Entertainment Group of Los Angeles.

The bidding to determine which of the competing partnerships gets to buy The Cloister and Ocean Forest Golf Club, both on Sea Island, and The Lodge, Island Club at Retreat and the company's administration building, all on St. Simons Island, will begin at 11 a.m.

It will be conducted at the downtown Atlanta law firm of King and Spalding, which represents Sea Island Co.

Determining which of the final bids is better will be up to the Sea Island Co. board of directors. Along with money, other terms, such as the initial offer by Oaktree-Avenue to retain current employees, will be factors.

A bid higher than the $197.5 million that Oaktree-Avenue offered at the time Sea Island Co. filed for bankruptcy protection Aug. 10 in a packaged plan that had the support of major lenders would mean more money to be distributed to creditors.

"We are certainly hoping for a spirited and competitive auction," said Jordi Guso, an attorney representing a committee of unsecured creditors, or those without collateral to secure their claims.

Under the proposed plan to settle Sea Island Co.'s debts, based on the initial Oaktree-Avenue offer, unsecured creditors would recover about three percent of what they are owed and secured bank lenders, which could foreclose on Sea Island Co.'s real estate if they chose, would receive about 30 percent of what they are owed.

In total, Sea Island Co. owes creditors more than $1.1 billion.

At the time of the August bankruptcy filing, the Oaktree-Avenue partnership had reached an agreement to purchase Sea Island Co. for $197.5 million.

But Sea Island Co. received a higher competing bid, triggering the auction.

That bid from Starwood-Anschutz emerged early in bankruptcy hearings.

Starwood Capital Group, which until 2000 controlled such hotel brands as St. Regis and W, has been aggressively buying distressed properties during the recession. Anschutz Entertainment Group owns the Los Angeles Kings of the NHL, the pro soccer Los Angeles Galaxy and other sports franchises.

Sea Island Co.'s finances faltered after it spent lavishly to rebuild The Cloister, and shifted its target market from well-off Southerners to the global ultra -rich, and, before national real estate markets collapsed, counted on real estate sales to offset operating losses at its resorts.

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