Lakota Canyon Golf Course owners file Chapter 11, but golf season still a go
Warrior Acquisitions LLC, owner of New Castle’s Lakota Canyon Golf Course, is currently undergoing a reorganization and leadership changes after the company and its affiliates filed for Chapter 11 relief earlier this month.
Lakota Canyon Ranch Homeowners Association Board President Mark McDonald said the clubhouse and golf course will continue to operate this season, and he expects the course to be ready to open sometime in April.
He added that there is no indication the Chapter 11 filing will have a negative impact on homeowners or the HOA in any way.
While the Lakota Canyon Ranch HOA owns the recreation center and pool in the New Castle neighborhood, after agreeing to purchase it for $625,000 last year. Warrior Acquisitions owns the golf course.
Financial challenges and a need for company reorganization led to the Chapter 11 filing on March 4, according to a company press release.
“After careful and diligent consideration, the company believes that Chapter 11 provides these amazing companies the best opportunity to reorganize for the benefit of all of stakeholders while continuing to faithfully serve its many customers,” Jeremy Rosenthal, Warrior’s Chief Restructuring Officer and Principal with Force 10 Partners, said in the release.
Rosenthal also serves as the financial advisor and investment banker for the company.
Warrior owns 18 golf courses throughout the country, and declines in the golfing industry has impacted several of its properties, he said.
Warrior Acquisitions’ managed courses generated approximately
$13 million in annual revenue over the past few years, but generated an operating loss of approximately $680,000 in 2018, according to Rosenthal.
In his declaration of support of the Chapter 11 filing, Rosenthal explained that the nationwide downturn in the golf industry created a challenging business environment for Warrior over the last few years.
An overall decline in the number of players, an increase in cost of water and labor to operate golf courses, an overabundance of golf courses, escalating labor costs and the increasing price of equipment, as well as poor weather in 2018, are among the reasons he cited for the decline.
He also points to a “lack of management depth and professional financial support,” as factors in the chapter 11 filing.
“Warrior Golf failed to make a $500,000, semi-annual interest payment on March 1, 2019 [on promissory notes] and simply does not have the liquidity to honor its obligations under those notes,” Rosenthal explained.
Chapter 11 should allow Warrior to maximize the value of its assets, while seeking to reorganize their businesses, according to Rosenthal, as the company intends to stabilize its operations and become more fiscally sound overall.
He added that the expectation is that Lakota Canyon will open and have a full season.
“We look forward to people playing Lakota for a long time,” he said in a separate interview. “We now have the resources and managerial attention to invest in the Lakota community and make sure the golf course and amenities are top notch and meet the needs of the valued customers.”
According to the press release, the company has liquidity to fund operations and its debtor-in-possession financing has been approved.
The U.S. Bankruptcy Court has also authorized the payment of employee wages and benefits, payment to vendors and suppliers going forward.
Attempts to contact Warner and Jennifer Mercer, listed as the communications contact for Warrior Custom Golf, but were not answered prior to the publication of this article.
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