OK, here is what I know.
Country Club of the South is literally a chip shot away from my club's 15th tee and from my driving range to drive to their back entrance is 7/10ths of a mile. However, we could not operate on more different private club models.
CCoS is member owned, HAD an ID of $35,000 at one time and the current monthly obligation if you include all mandatory fees, minimums, capital charges is $783.33 (or it was a few months ago). When the market for IDs fell out last year it crippled higher end privates that had not quite made it as an elite (Atlanta Athletic, Peachtree, Cherokee...) and needed initation fee income to operate. There are members with over $100,000 in assessments and original capital "invested" in the club and Tuesday will wipe all those investment dollars out
What I know about the note is straight from Brad Beard, the club's banker at Bank of North Georgia (Synovus) and is public record. Interestingly, I had approached Brad about banking my club in 2006 during my renovation and was turned down because they would have had too much concentration of club debt in one area. I also called to give Brad the "needle" a bit about picking the wrong club
Heritage Golf Group, led by Bob Husband, has the inside track with the bank right now. Heritage Golf Group owns and operates White Columns, Atlanta National and Polo Golf and Country Club in the north metro area. They also manage/own many TPC properties all over the CArolinas, Texas, Florida and Michigan. They are known as "high end" operators.
They were chosen among several companies (Affiniti Golf Group and Sequoyah Golf--the Canongate Group as they are better known in Atlanta) by the bank to manage the club and eventually assume the note. The bank also said no to Troon Golf as they wanted a local company.
The bank may have offered a discount on the note a while back but I don't think it was 40%. I spoke to Brad myself about making an offer on the note as there were interested people and Brad knows I am in the business and right next door. Absolutely no discount of the note was offered and the note is a bit more complicated than a straight note of $9.5.
Actually, the note is structured in such a way that credit default swaps and rate swaps mean the note is actually between $9.3 and $11.25 MM. The "basic" number today based on rates is $10M. The bank, based on their outside analysis believes the club can service the debt if properly run and based on some numbers I've seen I don't think that is too much of a stretch. It is hard to describe how pooly run this member owned club was.
The conventional wisdom is this: No one will bid on the loan and the bank will bid its own note and take back the club and turn over the day to day operations to Heritage whom it hopes will find other financing to take the bank out in 3 years or so.
However, the latest rumor is that while the bank is not discounting the note, they would stay in and finance the project with as little as $2.5 in equity put in. I have no doubt that there are many wealthy people in CCoS, however they have not been able to organize a group to date and every time your hear of a member group bragging, er, talking about "just buying the place ourselves" when it comes time to write that check there are never enough guys to pull it off.
This Tuesday at either 141 Pryor Street or 7700 block of Roswell Road anyone can bid on CCoS. An auctioneer will call out an opening bid and the games begin. If you win the bid you must have certified funds for 15% of the sale price on that day and you have 30 days to pay the balance or lose your deposit. Again, the rumor is the bank will finance 75% of it for you but I assume you would want to work that out first before raising your hand