The following statement was sent out over the weekend to “members” who had paid for a membership in the new golf club that AGP was creating at the former Oakmont Golf Club.
We hope our update today answers some of your questions. To do that, we’d like to be more transparent about some background information. When we took over operations of the Club in early February we had approximately $250,000 in cash earmarked for “startup” and contingency. At the time it seemed like enough. The golf course had been closed since early December and we knew it would take time and money to get ready to open early March. But we felt we were well financed.
As we all know, COVID hit and we did not open as planned. We could not get any County permits nor many contractors to execute our clubhouse plans. Restaurants remain closed to this day. As Members, you all knew our plan relied on linking great golf course conditions with membership programs and amazing food/beverage. But we never had the chance to get going. We plowed through our start-up money quickly. The County shut down our maintenance restoration efforts and we had to restart all that again once things loosened up. We took out a $250,000 PPP loan that really helped for a while but we exhausted all of that money quickly on payroll. Near the end, all we had left was your Member prepaid money. It seemed wrong to burn through that money only to still have to walk away. With no end to our financial hardships and negative cash flow in sight, we decided to terminate the lease.
Two days after vacating the property we were hit with a formal complaint and hearing date from the NLRB. I don’t intend to share any information on any of that other than to say we disagree in the strongest terms with their accusations and financials demands. However, we won’t learn until October how their internal Administrative Judge rules on this case and if there may be a financial obligation attached to AGP 2. We also don’t know what the status of our $250,000 PPP loan liability is, nor what other parties will do or pursue against AGP 2.
Our attorneys (plural) have all advised that we file for bankruptcy and turn over our remaining cash to a court to then determine who gets what. We have been advised that the one thing we cannot do is pay some obligations ahead or in favor over others. We have to freeze our cash. The role of a Bankruptcy Court is to sort through financial obligations and impartially decide who gets paid what.
Unfortunately, I am updating you today to let you know the decisions related to satisfying any prepaid membership obligation related to AGP 2 will be handled by the Bankruptcy Court. Once I have more information for you on timeline and process I will let you know. We have good records of what we billed and what members paid, all of which will be turned over for the court to review. Any communication from the court will be forward to you as it becomes available.
This is all new for us and have no experience with any of it. We will continue to keep you informed as we ourselves learn what to expect.
Advance Golf Partners Two LLC
It may be news to many in Oakmont that AGP created a sub-entity entitled “AGP 2 LLC” (Limited Liability Company) in their relationship with OVA/OVPC. From this statement that is the entity that is filing for bankruptcy. And though they are addressing their golf club membership with this statement, little information has been provided to OVA members who contributed $193,146 through their $8.50 per member per month social membership dues payment.
AGP claims they arrived with $250,000 cash and later procured a $250,000 PPP loan. They also received the social membership amount above as well as the unspecified golf “membership program” fees and the green fees and other revenues they collected once the golf courses opened in May. Altogether these funds would total over $700,000. They further claim that “near the end, all we had left was your Member prepaid money.”
A final point: the statement says, “two days after vacating the property (in July) we were hit with a formal complaint and hearing date from the NLRB.” While this seems to imply that this was their first notice of the NLRB action in the two cases pending, an Initial Letter of a potential labor issue with NLRB was dated 2/28/20.