In case anyone ever gives you a choice between bankruptcy and a gang of rampaging frat boys, take the bankruptcy.

Because sometimes you just can’t buy a break, Treetops Resort in Gaylord had to deal with both within two months of one another.

Having closed the book on Chapter 11 a few weeks ago, and having cleaned up the debris from Sigma Alpha Mu well before that, Treetops general manager Barry Owens is uniquely qualified to compare them.

He has also become more qualified than he ever imagined on how to keep employees focused on the small picture instead of the big, potentially messy one.

Though the restructuring damaged some business relationships, he says, it made others stronger. And “it didn’t affect us nearly as much as the fraternity thing did.”

The bankruptcy filing Nov. 25 made local news, and not much of it. When the fraternity ran amok Jan. 17-18, reports echoed coast to coast and probably beyond.

To this point, four of the 120 plunderers from Sigma Alpha Mu have been charged with crimes and one has pleaded guilty. After an initial empty promise to take responsibility, the rest of the young princes are hiding behind their mommies, daddies and lawyers.

The fraternity has paid out all of $25,000, and insurance has covered $200,000 more. With total damages of more than $430,000, Owens says, including the impact on revenue and reputation, Treetops has filed a civil suit.

“I still have people ask me, ‘Those rooms been fixed yet?’” Owens says.

Yes, within about three weeks. But a place that markets itself as a family destination has been yoked to an episode of Boys Gone Wild.

Treetops canceled four other fraternity reservations and won’t book any more, but the photos aren’t going away.

Just a reorganization

On the bankruptcy front, meanwhile, the eight investors who basically owed themselves millions of dollars are now six owners of a company with a book value of $16 million.

There was collateral damage, starting with former minority owner Rick Smith. The celebrity golf instructor and course designer is out, and his golf academy at Treetops will close at the end of the season.

According to court records, some sizable unsecured creditors, including a law firm in Muskegon and a construction company in Vanderbilt, can apply to be paid off at 32 cents on the dollar.

But the employee base remains stable at about 400 people, the turnover through the eight-month process was standard, and Owens has acquired a level of expertise he hopes never to tap again.

“I tried to make sure they didn’t read things first in the paper,” he says.

At the same time, he never made a big deal of it: the Chapter 11 reorganization — “never bankruptcy” — was just a way to ensure they could keep doing what they already were.

“Nobody panicked,” Owens says. Most people wouldn’t understand the legalities anyway, and everyone absorbed two key facts immediately.

“We’re not going to do any layoffs,” he told the staff, “and your check is going to be okay every two weeks.”

Why worry about anything else?

A long memory

Reaction from vendors was more varied — and sometimes more vexing.

After the filing, some insisted on cash on delivery, even if their account balance with Treetops was zero. Where he could, Owens fired them, not because he couldn’t pay COD but because he was insulted.

Others shrugged and kept the trucks moving, including Treetops’ propane supplier.

“It’s kind of scary when they’re in bankruptcy and we’re filling up their tanks,” concedes Chad Hamina of Fick & Sons in Grayling, “because once you fill them, there’s no way to get it back.”

But the companies go back a long way and he had Owens’ word, and those things count.

“I can be a bit of an elephant,” Owens says. He’ll remember who stepped up and who stepped aside.

That’s the business part, though. Now the rain has stopped and the sun is out, metaphorically and otherwise, and it’s time to focus on another partnership — the one northern Michigan’s resorts all have with Mother Nature.



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