DCC Class A Members:
First, let me personally thank each of you for stepping up to the plate and paying the $10K assessment as we work to save Decatur Country Club. I am a little disappointed in some of our colleagues who did not participate. Hopefully more will participate later. DCC has too many members who are capable of participating to be represented by only 31 of us. I think we will see more participation in the future as our plan of reorganization takes effect. We need each of you to actively help us sell this program to other qualified and dedicated DCC members.
Here is a brief list of topics that we need to cover at our meeting next Wednesday, July 14, at 6:00.
1. Will we allow those who still wish to pay the assessment to join us? - I think this is a no-brainer, but we need to decide officially as a group. What will be the cutoff date for paying the assessment?
2. Due to the small group of voting members, should we reduce the size of the Board from 9 to 5 members? Nine board members represents 30% of our group, and is probably unwieldy in function. With the current club management in place, the board should be concentrating on major policy issues, not operation of the club as we have done (poorly) in the past, and we should not need as many people.
3. Who will serve as new board members? They will have to be able to devote a lot of time to the job during the first few years. Speaking from personal experience, the pay is poor, the hours are long, and the meetings are frequent and not a lot of fun. On Wednesday, the current remaining board members will propose candidates for service, others can be nominated from the floor if desired.
4. What is happening with the bank?
5. What is happening with the LLC?
Other topics will be added as they come up before the meeting.
Now - here is an idea I would like each of you to consider, edit, refine, and help us make work (or present a better idea).
This is my out-of-the-box idea and it has not yet been analyzed, vetted, or approved by Larry Weaver and his associates. I think it can be made to work within the framework of what we are currently doing, but I'm sure there are details to work out. I will leave the details to the detail oriented.
Each of us has taken a risk with our $10K assessment payment because we want to do whatever it takes to save DCC. We are concerned that our money is slowly being depleted paying interest payments to Wachovia while we form and fund the LLC to buy the mortgage and execute a sale leaseback of the property. Money spent for interest cannot be used to reduce the debt or to buy the mortgage, meaning the LLC must raise even more money to execute our final plan. Formation of the LLC is complete, but resolving securities issues will take 6-8 months and fully funding the LLC could take another 6 months.
While I am confident our plan will work, every month burns valuable capital and keeps whatever danger Wachovia presents to DCC as an ever present threat. Meanwhile we keep paying Wachovia money that would be better used elsewhere. We also expend time and energy that would be better spent rebuilding our membership and finances. We need to get Wachovia out of the life of DCC as quickly as possible.
I would like to ask our LLC members and future LLC members who can afford to do so to consider making a loan to the LLC at 6% interest so we can quickly raise the capital needed to buy the Wachovia loan. If we have $2 - 2.5 million in hand, there is an excellent chance that we can buy the loan at a steep discount. We know that the Wachovia employees are trying very hard to get rid of all bad loans (DCC included) so the loans are not on the books when Wells Fargo officially assumes control of Wachovia. They are very afraid of losing their jobs if they have a lot of bad loans on their books. We might be able to avoid the time and expense of a forbearance agreement, use our assessment money to reduce debt, and use our assessment money to pay interest to our members instead of to Wachovia if we could do this.
I think we have several LLC and DCC members who could negotiate successfully with Wachovia to buy our mortgage at a discount. This plan would give them that opportunity within the current plan of reorganization. We have not had that option in the past.
We have been criticized by certain individuals and groups in the club for not trying to buy the mortgage at a discount. They overlook the fact that it is hard to bargain when your hands are empty. This idea might solve that problem.
When the securities issues with the LLC are resolved, the loans could be repaid with money invested in the LLC, or converted to LLC interests, or both. Meanwhile, the LLC would own the property, our assessment money would not be wasted on Wachovia, and we could proceed with the sale of the club property to the LLC with the simultaneous leaseback of the property to the club at favorable terms. Those who made the loans would be secured by the value of the property, just as it is under the current plan of restructure.
I think if we do this we not only reduce our own risk of loss, but we will encourage others to participate quickly because of the greatly reduced risk they would encounter and the knowledge that our plan is actually working. With Wachovia gone, paying the assessment or buying LLC interests becomes an investment, not a risk to save DCC.
I would appreciate your thoughts and comments regarding this idea. I think with a little work it can be made to expedite our plan to get Wachovia out of our lives and save a considerable amount of money in doing so.
Regards,
John Peters
President - Decatur Country Club
256-318-0020
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