Moncton's Royal Oaks Golf Club in receivership

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The Royal Oaks Golf Club in Moncton has been placed into receivership, but is expected to open for members on May 17.

In a letter to club members dated April 12, receiver James Foran of Deloitte Restructuring said the course is expected to open for play on May 17, and fully paid memberships would be honoured.

The Royal Oaks Golf Club on the Irishtown Road was designed by U.S. Open architect Rees Jones. It is described as an award-winning practice and teaching facility, with a restaurant and event facility that is often used for tournaments, weddings, fundraisers and corporate events. The golf course is surrounded by a subdivision of privately owned homes.

According to court documents on the Deloitte website, Royal Oaks borrowed $2.1 million from CWB Maxium Financial Inc., in 2012 and another $2.1 million in 2017, for “capital improvements” to the facility. According to the document, Royal Oaks defaulted in the 2017 promissory note and as of Sept. 22, 2023, Royal Oaks owed CWB Maxium $1,904,896.28. CWB sent Royal Oaks registered letters demanding the payment owed. The court documents noted that a dispute among shareholders has been “mired” in legal proceedings for several years.

The letter to members said the food and beverage facilities of the Royal Oaks club were closed April 11, until further notice.

On April 15, the Court of King’s Bench of New Brunswick in Bankruptcy and Insolvency granted an insolvency order and appointed Deloitte Restructuring of Halifax as the receiver and manager of Royal Oaks.

In Saint John Court of King’s Bench Monday, Justice Darrell Stephenson accepted an application to name James Foran of Deloitte as receiver. During the proceedings, Foran asked for the authority to borrow $500,000, even though the course still has approximately $191,000 in cash reserves.

Foran told the judge that financials are “fluid” and the reserves are now closer to about $125,000. He said the request was in case some emergency arrived that prevented the golf course from operating.

“We’re trying to get the golf course ready for the season,” he said.

Stephenson approved $300,000 in borrowing power, saying he neither wanted it to offer an undue amount or handcuff his court receiver.

Lawyer Josie Marks, who represents TW1 Oaks, Inc., told the court her clients had been running the course for about five years and understood as of February that there would be “no issue operating” the course on a “status quo” basis.

But on the weekend, she said they learned on Facebook that the Crosswinds Restaurant and Bar had closed April 11, “which was quite surprising for our clients,” asking for an update.

Foran said the intention was to run the operations “status quo” but after discussions with the general manager and creditors at CWB Maxium, it was clear that it was not making economic sense to keep the restaurant open. He cited low foot traffic and staff challenges as part of the issues, and said it was determined it “wasn’t critical” to operations.

Foran told the court that he would work with the general manager and would see if there was an operating model that made more sense for the restaurant as opening day approaches.

Stephenson said that once Foran’s sales process concluded with an acceptable offer, it would come to court for an approval, followed by a distribution order to determine who gets what.

Foran said there’s been “quite a lot of interest in this property already,” including from those who were previously involved.

Requests for comment from the club’s manager and the receiver were not returned.