Treetops Resort seeking bankruptcy reorganization
The company that owns Treetops Resort and Spa, a well-known northern Michigan golf and ski destination, and features prominent auto industry investors, filed for bankruptcy protection Tuesday, court records show.
Treetops Acquisition Co. LLC, based in Gaylord, filed for Chapter 11 bankruptcy protection Tuesday in U.S. Bankruptcy Court in Bay City, saying that despite an improving operating performance it has been unable to make interest or principal payments on $7 million in long-term debt and still owes back property taxes.
The company said in a court filing on Wednesday that it plans to operate the resort while it restructures under bankruptcy protection and hopes to exit by early next year. U.S. Bankruptcy Judge Daniel S. Opperman has set a Dec. 4 hearing.
The company said it purchased the Gaylord property — including five golf courses, 23 ski runs, restaurants, a golf school, hotel and conference center — for $26 million in 2002.
Richard Owens, the general manager of the company since 2010, said in a court filing the resort has suffered "substantial operating losses and cash flow deficits." The financial problems were "due in part to the declining economy (and the golf resort business generally in Michigan) and, in part, due to poor management."
In 2002, a news release said the investors acquiring the 4,000-acre property included the late former Ford Motor CEO Harold (Red) Poling; former Daimler Chrysler CEO Robert Eaton; Al Wisne, former owner of Pico Corp; John Bates, chairman of Heidtman Steel; Bob Lanigan, former CEO of Owens Illinois; and land-planning pioneer Bob Sierra. The release said golf course designer Rick Smith was leading the group buying the property.
In 2010, it had a loss of $467,000 before debt payments versus a profit of $1.2 million in 2013. Total rounds of golf played rose from 48,843 in 2010 to 96,430 in 2013. Nights stayed rose from 20,967 to 34,303 in 2013. This year, net income is the same, while total rounds of golf played are 89,461 and nights stayed are 31,185.
On a yearly basis, the resort has about 500 employees and contractors and currently has 109 full-time and 158 part-time contract employees.
Gross revenue rose 72 percent from 2010-13 and the company has paid $1.2 million toward delinquent real and personal property tax. It also sold off some unused real estate last year, and for nearly the last two years has sought a debt-for-equity swap to reduce its obligations.
Owens said it is critical the court approve access to debtor in possession financing "to provide a safety valve against adverse seasonal weather conditions depleting its revenues and to assure the general public that (Treetops) will remain open for business and will expeditiously complete its Chapter 11 reorganization in early 2015."
The bankruptcy filing shows Eaton owns a 23 percent stake in the company, while a Wisne trust owns 21 percent. Smith is listed as an owner but has no equity stake in the company.
Golf Magazine has previously awarded the resort a Silver Medal Award, while Golf Digest previously voted the resort 32nd on its list of "Top 75 Resorts in America."