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Local golf course Ďbankruptí; banks seek viable solution

Date Posted: 2005-05-19

Southern Links is one of the nationís ten top golf courses, but prestige and power players were not enough to stave off bankers demanding payment.

The course was built in the 1980ís as the real estate bubble was growing in Okinawa. Ryukyu Resort Corporation, which owns the popular golf course, told the Naha District Court it owes at least \16,800,000,000. Lawyers filing the court briefs noted the Ryukyu Resort Corporation had overextended itself, loaning money to related companies who over the past 15 years failed to make return payments.

Southern Links Golf Course itself makes money, according the the 200 workers now affected by the bankruptcy action. Of the 2,000 golf courses in Japan, Southern Links ranks as the tenth best. Itís the Ryukyu Resort Corporation itself, with its hotels and other investments and interests, they say, that caused the problem. The hotel at Southern Links is a large, popular facility facing the Pacific Ocean and offering a gorgeous sunset view. With Southern Linksí 18 hole golf course winding through the area, itís a golferís dream. Now, corporation president Tadashi Furugen says he wants to keep everything open, and everyone employed.

The catch is that since the company never made its bank payments, debts now total \11,800,000,000 directly to the banks. The three banks, Ryukyu, Okinawa and Kaiho, are locked in talks trying to figure how to recoup their losses. One consideration is to turn the debt over to a major mainland Japanese or foreign corporation wanting to invest in Okinawa. Investment is often considered a good way for a foreign company to gain a foothold doing business in Japan.

Ryukyu Resort Corporation was formed in 1975, with Kiku Kinjo Trading Union Group leading the project. Since the Southern Links Golf Course opened in 1988, the hotels and restaurants were added, all before the real estate bubble burst and Okinawa land and business values plummeted. Support companies reportedly went belly up in the mid-to-late 90ís, leaving Ryukyu Resort Corporation exposed.

Corporate officials say, though, the banks shouldnít be surprised by any of the events transpiring. They say the banks not only knew the dire financial situation, but had already been involved tried to straighten the problems. Adding to the dilemma, say company leaders, a group of four Osaka businessmen are pressing for return of money they deposited with Ryukyu Resort Corporation three years ago.

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