Lloyds faces losses from US luxury resort

Published 12th Aug 2010

Lloyds Banking Group is facing multi-million pound losses after a US luxury resort, filed for bankruptcy protection on Tuesday.

The lender, 40% owned by the UK government, is one of a number of banks that have exposure of $340m to Sea Island Company.

Sea Island, which has hosted the G8 Summit as well as a host of famous guests including Bill Gates, Anna Kournikova and George Bush, filed for protection after it was unable to repay $600m of debts it amassed whilst pursuing an aggressive expansion plan.

According to court documents filed in the US, Sea Island is planning to emerge from bankruptcy protection by selling its four resorts, three golf courses and two private clubs for $197.5m to a group of investors represented by LA-based Oaktree Capital Management and New York-based Avenue Capital Group.

The resort, a two-by-five mile stretch of private beaches, also has many acres of undeveloped coastal land which the company said it was planning to sell.

Other lenders affected by the filing include Bank of America and Synovus Bank.

Sea Island said it hoped to emerge from Chapter 11 by the end of 2010.

Source: ' Property Week '

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