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June 26, 2012
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Cordillera Club files bankruptcy

Editor's note: This bankruptcy and litigation only involves the Club at Cordillera and has nothing to do with the Lodge and Spa at Cordillera, which is a separate entity and remains open for business.EDWARDS - Cordillera's owners filed bankruptcy Tuesday morning, the day a $12.7 million loan was due to a local bank.Club at Cordillera Club owner David Wilhelm and his Wilhelm Family Partnership management company signed for the loan with Alpine Bank on June 26, 2009, when they acquired the club from Felix Posen, court documents show.In all, Wilhelm owes Alpine Bank $19.4 million in two loans - one for $12.7 million and another for $6.7 million, according to testimony in an earlier hearing.Court documents show that Cordillera's owners asked for Chapter 11 bankruptcy protection Tuesday morning in U.S. Bankruptcy Court in Delaware, which is where the company is incorporated.Cordillera makes its first court appearance Wednesday morning in Delaware before Judge Christopher S. Sontchi."This is a chance to reorganize and bring the Club back to its prominence," said Dan Fitchett, the Cordillera Club's chief executive officer. "The court system will take charge and help guide us through this process."The Wilhelms and some Cordillera Club members have been locked in litigation for more than a year."We were certainly not surprised," said Cheryl Foley, one of the plaintiffs in legal action against Wilhelm and the Club. "It's unfortunate that we could not come to some sort of an agreement," Foley said. "... We're putting together our legal position and we will be participating in the bankruptcy proceedings."Those filing Chapter 11 are seeking to financially reorganize."We had hoped to avoid filing Chapter 11, but we were unsuccessful in reaching a mutually acceptable agreement with certain stakeholders in the community," said Wilhelm, chairman of the Club at Cordillera. "The process will allow the Club to operate its ongoing business while it resolves the outstanding conflicts and prepares a plan of reorganization to emerge a healthier company."One of four courses openFor the second year in a row, Cordillera's Valley course is the only one of the four Cordillera golf courses open, along with that course's facilities. Everything else is closed, Fitchett said."We are maintaining all the courses and all the physical buildings," Fitchett said.And that's were the lawyering began.Last spring Wilhelm promised to open all four golf courses, but opened only the Valley course and laid off dozens of workers.Some of the members sued him in a class action lawsuit, saying that if he was going to open 25 percent of the golf courses by opening one of four courses, they wanted 75 percent of their dues back. The Wilhelm Family Partnership collected $8 million in membership dues last year and paid themselves almost $1 million, while failing to open three Cordillera golf courses. The members say that violated the membership agreement.The lawsuit asks that the 2011 dues be repaid and that all the membership deposits be refunded. It could total $108 million.Wilhelm sued the members for $96 million, claiming they were trying to drive him out so they could take over.In the meantime, Cordillera Club memberships are at 223, Fitchett said Monday, down from more than 650 two years ago. An annual Club membership costs $12,500, Fitchett said."It's no secret that there has been a lot of activity relative to litigation," Fitchett said. "We've experienced a high degree of dialogue between a small number of members and the owners of the Club at Cordillera."Wilhelm and the members have been unable to reach an agreement, even though they have met a "significant" number of times, Fithcett said.Fitchett said he had in employee meetings all morning Tuesday.It's a matter of stopping the momentum, Fitchett said."We're trying to reorganize and recapitalize. We are bringing new money into the partnership, new financing," Fitchett saidAlfred H. Siegel will serve as the court-appointed chief restructuring officer. He served as trustee of the IndyMac estate and as chief restructuring officer of Circuit City.They filed bankruptcy to stabilize their finances and "enable a solution with the organization's adversaries," said Christopher Celentino, one of Cordillera's attorneys with Foley & Lardner LLP."If we do not reach a settlement, we will pursue the litigation," Celentino said.Interim financing is expected to be in place later this week, and to be fully financed by July 15, Cordillera said in a statement.Staff Writer Randy Wyrick can be reached at 970-748-2935 or rwyrick@vaildaily.com.


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The VailDaily Updated Jun 27, 2012 04:27PM Published Jun 26, 2012 07:39PM Copyright 2012 The VailDaily. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.