Decades ago high-caliber golf club memberships were quite attractive investments to those with ample disposable income who were lured by the promise that they could recoup a portion of their membership fees in the future.

Now, post-recession, there is an abundance of golf clubs, fewer people are golfing, water restrictions are threatening the existence of courses, and many golf clubs—for many different reasons including significant deferred membership liabilities—have been forced to declare bankruptcy. San Diego attorneys Mikel R. Bistrow and Christopher Celentino, partners at Ballard Spahr have represented numerous golf clubs in bankruptcies, and currently represent the homeowners association in bankruptcy proceedings for the Crosby at Rancho Sante Fe golf club.

They have experience in Chapter 11 cases with courses in Colorado and with one in Indianapolis that set the stage for a new model in how to deal with your members when facing bankruptcy.

“I think the trend years ago was: File the case, get out of your deferred membership liability, start over with a fresh club and hope people come back and play,” Celentino said. “I think the model today is: Don’t poke your members in the eye with a sharp stick. Invite them to the table to be part of their own solution and allow them to rationally understand the economics of how the business has changed.”

Related Practices

Bankruptcy, Reorganization and Capital Recovery