A luxury real estate development and golf course near Coalville will likely have new owners next month, less than a year after the company declared bankruptcy in federal court.
Wohali Land Estates filed for Chapter 11 bankruptcy last summer, with a reported debt between $100 million and $500 million. The business has since sought relief through a loan to restructure the organization, which spurred a competition between multiple investors who hoped to become the primary lender.
Lenders are key figures in the bankruptcy proceedings, as the companies and individuals fronting the loans are expected to be first in line to purchase the property during the bidding process.
Chief Judge Peggy Hunt earlier this month finalized the timeline for the auction, setting a deadline of April 20 for all potential buyers to submit their bids. The auction itself is scheduled for April 24, with a closing date of May 13.
EB5AN, a group of foreign investors who have repeatedly claimed they have the largest stake in the development, will likely be the first to bid on the property. The investment group in a separate lawsuit alleged it had loaned $79.2 million to Wohali and that the development company owed approximately $86 million, including interest and other fees, by the time it declared bankruptcy last summer.
Hunt previously authorized EB5AN to loan at least $6.8 million to Wohali as part of its restructuring efforts during the company’s bankruptcy proceedings. The trustee overseeing the proceedings then proposed an agreement that would allow EB5AN to use the $6.8 million debt as a cash payment during its bid.
The agreement stated EB5AN would start the bidding at $65 million, with $3 million to $4 million set aside to reimburse other creditors. The trustee said he did not expect the property to sell for more than $65 million based on preliminary marketing materials.
The trustee is also offering 150 memberships, each worth $15,000, to Wohali’s golf course this year in an effort to retain the property’s value. The trustee said all 150 memberships need to be sold for the golf course to open. If the 150 memberships are not sold, people who purchased one will be given a refund.
Lawsuits naming Wohali as a defendant started piling up last summer after multiple contractors sued the company for reportedly failing to pay its invoices. Wohali declared bankruptcy in August and listed a debt totaling almost $13 million for its top 20 creditors alone.
The latest complaint, which was filed last month by Suncore Construction and Materials, claimed Wohali owed the company at least $681,042. Other contractors who have sued Wohali include Knight Trucking, Eave Solar and Sierra Pacific Windows.