Federal Club golf course, development, file for bankruptcy

The Federal Club, with a $9 million Arnold Palmer-designed golf course, opened three years ago with high-profile promise.

Today, the club and the surrounding upscale housing development known as Mountain Run off U.S. 33 in Hanover County is in bankruptcy protection.

Mountain Run Golf Inc. and Mountain Run LLC filed for Chapter 11 on Tuesday afternoon in U.S. Bankruptcy Court in Richmond. Together they represent the golf club and course and unsold residential parcels.

Members were informed of the action via e-mail.

What does the filing mean to the club membership, which numbers 170 out of goal of 500?

"We're open for business like always," said Ray Tate, one of the owners. "We're reorganizing. We hit the worst economy you could hit. We needed some help."

Together, both firms listed nearly $8.1 million in unsecured creditors.

It is unclear just how much the two entities will claim in assets, such as land and facilities. The same goes for liabilities. Attorneys have 15 days from the filing to submit a list of assets and liabilities.

Among the creditors is the Arnold Palmer Design Co., for $619,000, and the estate of Thomas Pollard, who championed the golf course and community effort before his death. The estate is owed an estimated $2.28 million, court records show.

Tate is also on the list for $500,000. Stanley Construction of Ashland is listed and owed more than $2 million. The father-and-son team -- A. Wayland and Calvin Stanley -- are also owners of The Federal Club and Mountain Run.

Service companies, an architect and a friend of the owners made the list, too.

The owners hoped to sell parcels of land in the community to subsidize the golf club until it was at full membership. But the economy delivered a double whammy to The Federal Club.

Increasing membership, the lifeblood of a club, hasn't happened. No one is building houses, either.

The master plan for Mountain Run calls for 99 homes; 58 have been built, mostly on 1-acre lots. Prices start at $700,000.

Now the owners are looking for ways to get cash. Options include finding equity investors, securing a line of credit and selling the property, Scott said.

"We needed to get some space to get this going the way it ought to go," Tate said. "Do I like it? No. But we had to do something. I would love to find another equity investor."

The golf course, which continues to draw rave reviews, has been the venue for the Richmond Golf Association Men's Amateur Championship and The Signature at The Federal Club, which draws some of the best amateurs in the state.

Nothing has changed for the members or homeowners, Tate said.

Thomas Leachman, who joined in the first wave as an equity member, said: "There are so many unanswered questions. It concerns me that other clubs [across the country] have filed for bankruptcy, haven't been able to pull out of it and gone to foreclosure."

Such an occurrence isn't on Tate's radar.

"We opened for business this morning. We'll be open for business tomorrow."

Contact Arthur Utley at (804) 649-6559 or .

Contact Emily C. Dooley at (804) 649-6016 or .