STOCKTON, Calif. — The 108-year-old Stockton Golf & Country Club has filed for chapter 11 bankruptcy a day after a notice was posted threatening foreclosure of the popular golf course and event venue, club managers told ABC10.
The Chapter 11 reorganization filing comes as the business deals with a debt estimated by the Bank of Stockton at around $8,182,023.
"Foreclosure was never an option and was never something that the board was ever going to let happen," Stockton Golf & Country Club manager Rick Schultz said less than 24 hours after the business filed for reorganization. "The club received a notice of foreclosure over a month ago, and the date for the trustee sale was posted as Oct. 17, but the club never intended to allow that to happen as we were working with our legal team."
Much of the debt, according to Schultz, was incurred after the club decided to build a bigger clubhouse in 2006. After the new clubhouse was built, the 2008 recession hit, which meant a decrease in membership.
"The club took out probably a bigger loan and built a bigger clubhouse than it ultimately should have -- just got a little over-leveraged," Schultz said. "There's this sort of the death spiral that a lot of clubs get into where they just don't have enough capital reinvestment money once they get done paying operations, that as the course worsens and conditions worsen, members tend to leave."
Schultz says club owners already voted to approve the sale of the club. He hopes that the bankruptcy filing and sale will improve the venue, boost membership and keep the landmark business alive.
"Both of these groups will put in a couple million dollars back into the facilities quickly and in essence, that will rejuvenate the club," Schultz said. "We have hundreds of meetings, business meetings, we have charity events. I mean, we have, how many weddings do we have where people get married? I mean, this is really probably the busiest and nicest banquet center in Stockton."
The Stockton Golf & Country Club was founded in 1914. In addition to operating as a golf course and hosting member-only events, the venue is also frequently used by businesses, nonprofits and individuals to host fundraisers, receptions, weddings, golf tournaments and other public events.
Among the organizations that frequently use the club for events is the club's own creditor, the Bank of Stockton.
"I think we have numerous interested parties that would buy it and then reinvest and really get the club back in pristine shape," Schultz said. "It's an exciting time for us because we feel like this is the point where we've got a chance to really succeed rather than tread water for the decade that the club has been doing lately."
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