Oakwood could have sold land for more, critics say

Before Oakwood Country Club’s directors chose to sell all the club’s property for $1.4 million, they turned down a local developer’s offer to pay more for part of the property.

Some of Oakwood’s members and creditors criticized that choice during a meeting in U.S. Bankruptcy Court in Lynchburg on Wednesday. They said they would be treated unfairly if the bankruptcy court eliminates Oakwood’s obligation to pay them and lets the sale happen.

“It just seems that the best interest of the creditors and the stockholders are not being protected,” said Lewis Marsh, who was president of Oakwood’s board of directors more than 20 years ago. “It seems to me they’ve already turned down a lot better offer.”

Oakwood filed for bankruptcy protection in January, after years of declining membership and revenue. The bankruptcy process lets the club reorganize its business while the court oversees the sale of property and payment of debts. Wednesday’s meeting was arranged to let creditors ask questions about the process and their chances of being paid.

When the club filed for bankruptcy, the board of directors planned to sell the property to Midlothian-based developer East West Partners, also known as East West Communities. The developer would keep the 75-acre golf course for a residential community, but a new corporation would buy and operate the club facility.

This week, Oakwood’s attorney, Richard Maxwell, filed a request for the court to approve the sale to East West Properties for $1.4 million, enough to cover secured debts. Competing bids are due March 25, and a hearing on the bids will be held April 1, according to court documents.

Maxwell told the creditors on Wednesday that if other offers come forward, the bankruptcy court would decide who wins the sale. “If there’s a better offer out there today, bring it,” he said.

George C. “Buster” Walker said that he submitted a proposal in 2008 when Oakwood sought developers for the golf course. He offered $1.5 million for the golf course, where he hoped to build multifamily housing and perhaps a nursing home.

He asked why his offer was rejected in favor of a deal that is now bringing $1.4 million for both the golf course and the club facility.

Last year the City of Lynchburg assessed Oakwood’s property at $3.2 million.

Bill Martin, president of Oakwood’s board of directors, said that Walker’s proposal hinged on having the city rezone the golf course. East West Partners proposed only single-family housing, which does not need rezoning.

Also, East West Partners plans to rent the clubhouse for $50,000 a year and invest up to $700,000 in club renovations as the residential development is built, Martin said after the meeting.

Several creditors objected to the plan to sell the club facilities to a new corporation, Oakwood Swim and Tennis LLC, whose members include Martin, another member of Oakwood’s board of directors, the vice president of East West Partners and one Oakwood creditor.

Esther Woodlee, owner of Mid-Atlantic Tennis Supplies, said Oakwood bought more than $8,000 in supplies from her last spring and never paid for them. She probably never will be paid, even though the new corporation will operate the club with the products her business provided, she said.

She said she felt like Oakwood ordered the products with no intention of paying her.

“We didn’t know we were heading to bankruptcy at that point,” Martin said.

But no payments were made between delivery of the products and the bankruptcy filing, Woodlee said. Before than, Oakwood had been a good customer for years, she said.