Deer Track North Course owners still planning redevelopment

The former Deer Track North Course was pulled out of a foreclosure sale last week, and one of its co-owners said he expects to retain ownership of the property and still intends to develop it.

The National Bank of South Carolina has a mortgage lien against the course's owners of nearly $2.93 million stemming from a $2.6 million loan in 2006. The course was on the list of foreclosed properties to be auctioned on Nov. 7, but the bank pulled it from the sale.

“We're negotiating with the bank on the note,” said co-owner McCray Smith. “The foreclosure was what the bank had to do and we're doing what we have to do.

“… Like I've said before, we're going to develop that property.”

The bank's attorney in the case, Tara Nauful of Haynsworth Sinkler Boyd P.A., could not be reached.

The course was originally scheduled to be auctioned off on July 5 after the bank foreclosed on Smith and co-owner Jerry Pettus.

The sale was canceled after the owners filed for Chapter 11 bankruptcy protection for the course in late June, but the case was dismissed on Aug. 19 and officially closed on Oct. 24, reinstituting the foreclosure.

United States Bankruptcy Judge George R. Hodges dismissed the Chapter 11 bankruptcy case, granting a motion by Synovus Banks – The National Bank of South Carolina is a division of Synovus – seeking dismissal.

The case was filed in the Western District of North Carolina after Deertrack Investors LLC – the entity that owns the course – merged with Woodend LLC, another of Smith and Pettus' companies that owns property in North Carolina. The bankruptcy was filed under Woodend.

Hodges ruled the continuance of the Chapter 11 case would be “objectively futile,” and he found the filing to be in “bad faith.”

In his decision, Hodges wrote: “Deertrack has no current business operations, other than the pursuit of litigation. Deertrack has no revenues, no employees, no going concern to preserve. … Quite simply there is nothing to reorganize

“Additionally, a review of the debtor's schedules show that the merged debtor is not operating any business and has no cash flow. Without a reliable source income, debtor cannot sustain a plan of reorganization to pay Synovus and other secured creditors.”

In the bankruptcy, the Horry County Treasurer submitted a claim for $8,287.12, and a bank submitted a claim for $437,000 stemming from property owned by Woodend LLC

Hodges added: “The timing of this bankruptcy was strategically aimed at forestalling foreclosure and hindering the collection efforts of Synovus.”

Smith said he is prepared to file for Chapter 11 bankruptcy protection in South Carolina if it becomes necessary.

Smith and Pettus purchased the course in March 2006 for $8 million, according to court documents, and closed it six month later with intentions of redeveloping the property.

But Horry County Council changed the zoning against the will of its owners from R-7 primarily to a less-dense R-3 at the behest of homeowners in November 2006, and homeowners have a class-action suit against the course owners arguing that there is an easement on the property preventing redevelopment.

Two judges have ruled Smith and Pettus are free to redevelop the land, but the rulings were appealed and the homeowner lawsuit remains active. Smith said an appeal hearing is scheduled in the next two months. Smith also has a countersuit against the homeowners.

Sammy Truett of Surfside Beach and potential partners Dr. Brian Adler and Linwood Foster have been interested in purchasing the 183-acre property and reopening the golf course. They were prepared to attend the July 5 auction.

But Truett said if the course ever makes it to auction and the bank bids at least $2.6 million to protect its interest, his group would be eliminated from contention. Truett's group had negotiated with bank officials prior to the bankruptcy filing.

“I can tell you if the price is $2.6 million we're out. The numbers don't work,” Truett said. “We're not even close to $2.6 million and when we were negotiating with them before we weren't even close.

“… We still think it's a viable project but it's been dragging on for a couple years. Our fire is not burning [to reopen the course] as much as it was six months ago.”