Several groups associated with LakePoint Sporting Community filed for Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the Northern District of Georgia in Rome.
At the crux of the filing is a new restructuring plan put in place by Rimrock Capital Management, a California hedge fund that took over the complex in 2016.
In a press release statement, LakePoint CFO Bob Zurcher said games and tournaments will go on as scheduled during the bankruptcy proceedings. There are no planned changes to current management, he said, nor will there be any interruptions in payments to employees and vendors.
Several facilities and venues at LakePoint, including the Champions Center, are not included in the Chapter 11 petition.
Rimrock has brought in Dan Berman, senior managing director of GlassRatner Advisory & Capital Group LLC, to help LakePoint with restructuring and workouts.
"The recapitalization will strengthen the company’s financial picture so LakePoint can grow and flourish," he is quoted in a press release. "It creates financial certainty and stability for the project and puts LakePoint on a clear growth trajectory."
The announcement wasn't exactly shocking to Bartow County Administrator Peter Olson.
"They let us know quite a while ago that there would probably be a bankruptcy filing, but it's all part of their conversion of the debt to the equity," he said. "And just working out the legalities of the new structure of the entity, so there's no surprises from our end."
Emerson Mayor Al Pallone said he doesn't anticipate the filings jeopardizing the future of any planned developments in and around LakePoint.
"We're still confident that once this whole process goes through its motions, I think it's 120-150 days for the full process going through court, we're expecting them to still land on their feet and they'll continue moving," he said.
Per a court filing, Rimrock is expected to draw up a plan that will "enable the debtors to adjust their respective balance sheets while at the same time allowing [LakePoint Land LLC's] legacy investors to retain an equity interest."
That restructuring will be managed by Arnall Golden Gregory LLP, an Atlanta based firm, as well as Garden City Group (a subsidiary of Atlanta's Crawford & Company) and Vantage Point Advisory Inc.
Filings suggest LakePoint may have as many as 49 creditors, with liabilities ranging from $10-$50 million. Among those listed as creditors with unsecured claims include Sports Parks of Georgia LLC ($1.06 million), Wilwat Properties ($1.02 million) and TriCapita LLC ($334,000.)
According to the initial bankruptcy filings, both a disclosure statement and Chapter 11 plan is due by Oct. 9.
"I don't think there's a lot of uncertainty or risk in the bankruptcy hearings," Olson said. "That's because they spent a lot of time working with all the other creditors and equity to come up with a plan everybody could consent to — it's not like they're involuntarily flinging this thing into bankruptcy and are expecting a long fight amongst all the creditors. They've done their homework and talked to all the equity owners and proposed a structure."
The companies petitioning for Chapter 11 bankruptcy are LakePoint Hospitality LLC; LakePoint Merchandise LLC; LakePoint Sports South LLC; LakePoint Land LLC; LakePoint Land III LLC; LakePoint Land IV LLC; LakePoint Services LLC; and LP Housing LLC.
"They've apparently worked out an agreement amongst those owners — that was the predicate to filing," Olson said. "They've been working for the last several weeks or months, really, to get some kind of consensus amongst the other equity owners so there wouldn't be a big battle ... my understanding is this is going to be a fairly quick in-and-out restructuring kind of bankruptcy."
Pallone said he does not envision Rimrock putting LakePoint on the market — but even if they do, he said the economic impact on the local community wouldn't be too dire.
"The worst case is they turn around and sell it to somebody else," he said. "To me, the worst case still isn't anything as bad ... it's still going to be a development and we're still going to have this road going through the north campus and that's going to be very valuable. Somebody would come in and do something with it."