Jeremy Rosenthal, principal with Calif.-based Force Ten Partners LLC who was brought in to act as Warrior\u2019s chief restructuring officer\/financial advisor, added, \u201c(Warrior Custom Golf) has been working diligently to focus the business on providing high quality custom golf clubs, helpful customer service and impeccable golf courses so that we can thrive in today’s challenging golf market.\u201d<\/p>\n
Warrior noted the company has \u201cample liquidity to fund operations\u201d and its $2.55 million debtor-in-possession financing has been approved, according to the Bloomberg story. The U.S. Bankruptcy Court also has authorized the payment of employee wages and benefits, payment to vendors and suppliers going forward in the ordinary course and the continuation of all customer programs, among other things, according to the company.<\/p>\n
So how did Warrior Golf find itself in this rough patch of finances? In a court declaration, Rosenthal cited bad weather and golf\u2019s declining popularity as two reasons for the company\u2019s financial hardship.<\/p>\n
The same \u201cchallenging environment\u201d other golf industry participants have faced in recent years, a \u201clack of management depth and professional financial support\u201d and debt obligations contributed to the filing, Rosenthal wrote in a court declaration filed earlier this month.<\/p>\n
What also spurred Warrior Golf\u2019s bankruptcy filing was a $1.35 million Manatee County (Fla.) court ruling last December against the company, stemming from Warrior Custom Golf and affiliated employees allegedly misleading and soliciting more than $1 million in investments from an elderly man for almost a decade.<\/p>\n
The complaint filed last October in the Circuit Court of the Twelfth Judicial Circuit details how in 2007 a Warrior Custom Golf representative allegedly called 86-year-old Cecil Mellinger in an attempt to sell him discounted golf clubs. When Mellinger \u201cexpressed disinterest in the golf clubs, Flaherty, as authorized agent for Defendants or someone under his direction and control,\u201d according to court documents, \u201cconducted a bait and switch with Mellinger, thereby proposing a possible investment opportunity promising Mellinger that a $5,000 investment would be worth $20,000 in three years with WCG.\u201d<\/p>\n
These investments were for the purchase and construction of U.S. commercial golf courses, and Mellinger made an initial investment of $15,000 \u201con or about June 1, 2007,\u201d according to the complaint.<\/p>\n
Over the next nine years, the complaint goes on to note, Warrior\u2019s numerous LLCs solicited money on 23 different occasions, totaling $1,099,990 by the time it ended May 4, 2016. To make matters worse, Mellinger suffered a stroke which impaired his cognitive abilities in the summer of 2013, yet, \u201cWCG and its subsidiaries continued to solicit money from Mellinger after he suffered his stroke,\u201d according to the plaintiff\u2019s court documents. As of Sept. 1, 2017, the investments were converted to promissory notes worth roughly $422,352.<\/p>\n
In mid-February, after filing an emergency motion to stay the execution of the $1.35 judgement, Warrior Custom Golf was granted the stay condition on posting a \u201cgood and sufficient bond in the total amount of $500,000 on or before March 4, 2019,\u201d according to the court order.<\/p>\n
That very deadline day was when the defendants filed for protection under Chapter 11 of the U.S. Bankruptcy Code.<\/p>\n
As a report in the website www.bankruptcydata.com<\/a> put it: \u201cThe Debtors lacked sufficient funds to post the full amount of $1.3 million while they challenge the default judgment and, thus, the appropriate option was to file bankruptcy to prevent further execution on the Default Judgment, preserve their businesses as a going concern and avoid the preferential judgment lien filed against the Royal St. Augustine Golf Club in St. Augustine, Florida, owned by Warrior Golf.\u201d<\/p>\n \u201cCustomers can be assured that our doors are open and that they can purchase custom clubs fit to their needs and then go play them on any of our incredible courses,\u201d Rosenthal said.\u00a0\u201cWe look forward to growing and innovating for years to come.”<\/p>\n![\"Fairvue](\"http:\/\/theaposition.com\/golfcoursebusiness\/wp-content\/uploads\/sites\/8\/2011\/03\/Fairvue-Plantation.jpg\")
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