Trustees are appointed to oversee the assets, accounts, debts and liabilities of the party that declared bankruptcy. Wohali, a luxury golf resort in western Coalville, will soon have a trustee overseeing its Chapter 11 bankruptcy.
Attorney Matthew Burne from the Office of the United States Trustee in Salt Lake City told Judge Peggy Hunt Sept. 23 his office is conducting interviews and should have a finalist identified within one week.
“One of the issues is the lack of cash in the case. So as you can imagine, Your Honor, some of the candidates have some trepidation about taking on such a task,” he said. “And given the scale of the property, that may be an issue.”
The resort’s main creditor, a group of foreign investors involved through the federal EB-5 loan program, originally asked the court for a trustee Sept. 11. Burne agreed with the appointment along with the owners of lots within Wohali.
Sept. 23, Wohali attorney Mark Rose said resort ownership agrees a trustee would be beneficial but “heavily” disputes the reasoning behind the motion.
The motion was brought under a part of bankruptcy law that requires trustees in cases involving alleged “fraud, dishonesty, incompetence or gross mismanagement.”
The petition cited two lawsuits one of the three founding partners brought against another partner and his associate in January.
With the parties in agreement, Hunt signed off on the appointment of a trustee.
Also Sept. 23, an attorney for the resort’s foreign creditors said they will put up a $500,000 advance to continue paying golf course employees and winterize the resort.
Michael Johnson said his clients covered the previous payroll and will pay the next one too.
David Billings, representing the lot landowners, said there’s more to be done than just payroll and preparing for winter.
“For example, there's a sewer lift station that needs to be built and paid for. Otherwise, the club will get in trouble with the town or the city of Coalville,” he said. “There's bills to pay in December, for the water district and for property taxes and perhaps to the [public infrastructure district].”
Resort co-founder John Kaiser previously estimated that Wohali needs $6 million in cash to successfully restructure its finances.
Its debt could total anywhere from $100 million to $500 million, according to the initial August bankruptcy filing.
The foreign creditors claim they alone are owed more than $85 million.
