April 20, 2010
By Angeljean Chiaramida
GEORGETOWN - The next chapter in the saga of the financially troubled Georgetown Club begins at 11 a.m. on April 28, when the bankrupt, 120-acre, 18-hole golf club, clubhouse, sport and function center goes on the auction block.
The most recent bankruptcy of the club, located on Route 133 (Andover Street), occurred in mid-September, when its owner, Peter Wojtkun, filed for reorganization under the Chapter 11 bankruptcy regulations. At that time, the club and its three corporate entities with which Wojtkun was involved found themselves more than $10 million in debt with no way to pay it off.
At the time, Wojtkun said the economic downturn cost the club members and function bookings, such as the lucrative wedding market. A rainy spring didn't help either, causing cash-flow problems that began last April and grew to critical mass in the fall, he said.
When the court denied Wojtkun's motion to reorganize and rework the $4.55 million debt he owed Sovereign Bank and the more than $5 million owed to other unsecured investors under Chapter 11, the court imposed Chapter 7 bankruptcy. The bank took possession and locked the doors.
Although other previously scheduled auction dates were canceled, JJ Manning Auctioneers advertised the auction for next Wednesday, posted it and its nearly 50-page brochure - listing everything from land, buildings and vehicles, right down to the food processors - on its Web site and held preview tours for bidders Monday.
A $100,000 bank check is needed to qualify to bid.
With almost $129,000 in past and current taxes and interest due the town, which has liens in place, as well as about $30,000 owed the Georgetown Light Department, Georgetown's interim Town Administrator Mike Farrell said he will be pleased to see the auction concluded so the town can get its money.
"No matter who buys it, we get paid," Farrell said. "Municipal liens get paid first. That's a sizable amount of money to the town."
The town assessed the club's lands and facility at about $10 million, but under Chapter 61B, which gives a tax break to recreational facilities, the assessment stands at around $6.5 million. Given the depressed state of the real estate market, however, the final going price could be less.
Who will walk away with the deed is anyone's guess, although lawyer, former member and past investor Christopher Rich said yesterday there are a number of strong possibilities. Rich expects other golf club owners, including Bill Flynn, owner of Far Corners, Windham and Lake View country clubs, and the Corcoran brothers, who own Granite Links in Quincy, to be interested.
Rich, who plans to be one of the bidders at the auction, said there is also another scenario.
"The first school of thought is that Sovereign Bank may come in and bid its mortgage, and if Sovereign bids the mortgage, it will own the country club," he said. "The second school of thought is that Sovereign doesn't do that and will let it go to the highest bidder."
But Rich and former Georgetown Selectman and Georgetown Club advocate Paul Thompson agree there are a lot of variables concerning the club. A lot depends on the condition of the facility, as well as the number of golfers who will take a chance on it, putting up money to join again.
"A lot of former members who are serious golfers and wanted to continue playing golf didn't wait," Thompson said. "They joined other clubs. I've played at the Ledges (in York, Maine), and there are a number of former Georgetown Club members up there. Others have joined at Ferncroft, Turner Hill and Ipswich. But I think some people will return. It depends on how things work out."
Rich agreed that avid golfers now tee off elsewhere, but he's hopeful.
"I think a lot will come back if the right people own it and if the prices are reasonable," Rich said.
Next Wednesday's auction could produce a new owner and life for the Georgetown Club. However, the legal battles over the way Wojtkun ran the club aren't over yet.
Rich filed a new lawsuit yesterday against Wojtkun and his wife, his former investors Cheryl and Steven Guerrette, and their attorneys and accountant. The injunction hearing is set for Thursday at Essex County Superior Court.