Stratford, Ontario (Scott Wishart - the Beacon Herald) - The membership of the Stratford Country Club voted Friday night to accept its board’s recommendation and accept the purchase offer from Gateman-Milloy.
“As a result of these passed resolutions, Gateman-Milloy will take over full ownership, management and debt by Jan. 31, 2015,” board president Mark Straus wrote in an e-mail to The Beacon Herald. “Gateman-Milloy is willing to waive all conditions of sale by the Dec. 15 deadline in the forbearance agreement we signed with our financial institution.”
In a meeting that Straus described as “positive,” the members of the financially beleaguered club endorsed the Gateman-Milloy bid – a deal that includes the assumption – or payment – of about $1.7 million in liabilities, including the property’s “member’s mortgage.”
“We were expecting a positive response,” Straus said in a Saturday interview with The Beacon Herald. “(But) the jubilation and celebration was … very heartwarming and uplifting given some of the difficulties of the past 30 to 45 days.”
Technically, the club’s shareholders voted on four separate resolutions, the most crucial being the authorization to sell “all assets” to Gateman-Milloy. The second resolution approved the board’s request to negotiate exclusively with Gateman-Milloy and enter into a “definitive asset purchase agreement.” The final two resolutions involved authorizing any two directors “to execute and deliver anything necessary or desirable in connection with Gateman-Milloy” and officially winding down and dissolving the corporation.
The bid from the Kitchener-based golf construction company promised significant “course and clubhouse improvements, fee freezes, preferences for the club’s current members, and payment of the corporation’s reasonable closing costs.” Gateman-Milloy has also committed to continuing all aspects of the club’s operations, including golf, racquet sports and curling, as well as the banquet facilities.
“It will be business as usual,” the club president said. “Gateman-Milloy is as excited about this opportunity as we are. “It’s a really positive thing.”
For golf members, there will be little that changes over the next few years, apart from the golf course and golf club improvements.
“If you’re a (golf) member now, not a lot is going to change, except you’re not going to be a shareholder,” Straus said.
This preferred offer, Straus added, was the best on the table.
The golf club’s board of directors had received other expressions of interest, including an unsolicited query from Golf North, and separate proposals from club members Harry Van Dam and Jamie Pyper. After reviewing the proposals, the board appointed a committee comprising shareholders John Wolfe, Don Galloway, Steve Monteith, Jane Landreth, Margaret DeLaet and Randy Benjamin to make an “unbiased consideration.”
The ultimate recommendation was made using four criteria:
1. Does the proposal maintain all activities of the Stratford Country Club?
2. Do the parties of the proposal have golf course management experience?
3. Does the proposal include yearly capital investment into the (golf) club?
4. What are the exact dollars proposed?
With the committee’s strong sanction, the board signed the letter of intent with Gateman-Milloy that was ultimately approved Friday.
The approval of the sale marks the end of a tumultuous few weeks for the country club. Rumours of the (golf) club’s financial woes began circulating late last month.
A notice to shareholders sent by Straus last Wednesday reported that total liabilities at the last two year-ends were about $1.2 million as of the end of October 2012 and about $1.3 million this past October.
The corporation also suffered a substantial loss in 2014, although details will not be known until audited financial statements are available. A serious cash flow problem came to the board’s attention in late October this year, the notice said.
The move to sell club assets or shares followed the Royal Bank's Oct. 31 decision to freeze the corporation's accounts and demand payment of all amounts owing.
The corporation met a negotiated bank deadline of Nov. 17 and presented the bank with a signed letter of intent. Further terms with the bank require an unconditional sale agreement by Dec. 15, with a closing no later than Jan. 31, 2015.
As for the new owners, Gateman-Milloy has been in the golf course business for more than three decades. In addition to golf course construction and renovation, the Kitchener-based engineering firm also became golf course owners when it purchased the Listowel Golf Club in November 2007.
“Listowel found itself in a similar situation … eight years ago,” Straus wrote. “Gateman-Milloy has turned that golf club around.”
In the interim, the board of directors will continue to fulfill all responsibilities “as per the resolutions passed” and continue to act in the best interest of the shareholders.
(With files by Donal O'Connor, The Beacon Herald)
From the Beacon Herald website: http://bit.ly/1GrOUYK