Continental Country Club Blog

What If Our Members Don’t Approve?

In the previous ‘THINGS TO KNOW’ message, we outlined the steps/timing for the bankruptcy reorganization and the critical role all of us – the association members – will have in determining whether the fees necessary to fund the reorganization plan are approved. We will continue to provide background information on the three primary reasons we were compelled to file for chapter 11 reorganization earlier this year, as well as information that will help inform every member’s vote when that time arrives.

The board is doing everything possible to ensure that any special assessment and/or annual dues adjustments will be responsible and fair. Our last message concluded that if Continental Country Club members opt not to approve a proposed special assessment and/or annual dues adjustment necessary to support the reorganization plan, the association is not likely to emerge from its Chapter 11 bankruptcy case as a reorganized entity. In this case, the likely outcome would be for the association to convert to Chapter 7 of Title 11 of the U.S. Code, which would entail liquidation of all assets, including our golf course, pickleball and tennis courts, clubhouse, and other assets.

Some of our members believe that if the association converts to a Chapter 7 bankruptcy, they would no longer be responsible for their annual fees. This is incorrect. The obligation to pay fees is an obligation that arises from the recorded restrictions on your properties. The obligation will continue in perpetuity and cannot be altered by any provision of the bankruptcy code.

Initially, a Chapter 7 trustee will have the right to collect fees as assets of the bankruptcy estate. While it is not possible to exactly predict the outcome of a Chapter 7 liquidation, it is possible that a Chapter 7 trustee would continue to collect the fees and remit payment with those fees to the association’s creditors in perpetuity until they are paid in full before eventually abandoning them back to the association.

Based on the currently filed claims, this process would take more than 10 years, during which time no association benefits or amenities will be achieved.

To the extent the association has assets that are burdensome and without significant value (i.e. common areas), those assets would be abandoned by the trustee back to the association quickly. Without any corresponding income to support their upkeep, they would quickly suffer from lack of care and would likely be left as public eyesores within our community and maintained only through the voluntary and charitable efforts and contributions of our fellow neighbors.

The board, which is comprised exclusively of fee-paying members, is working to find a reasonable resolution for our members that will avoid the worst of consequences for our friends and neighbors. We expect the reorganization plan that will be revealed in the coming weeks will propose both a reasonable and a realistic solution for the continued and future operation of the Continental Country Club.

If our members approve funding to support the board’s proposed plan, it will put the association on solid financial footing and ensure that it will not face similar problems in the future. It will protect the assets of the club and permit all of us to continue to enjoy the amenities offered. For those of us who do not use the amenities or appreciate the Continental Country Club environment, we would suggest that while they may not be important now, they could be a valuable asset to the next owner of your property.

Please continue to send your opinions, comments, and suggestions to We appreciate hearing from you.