Pending bankruptcy sale just the latest chapter in saga of Daufuskie’s Melrose Resort

The last time Daufuskie Island’s Melrose Resort property changed hands it was a result of its owners going bankrupt.

With its current owners facing a bankruptcy sale hearing set for next month, the tale of property’s recent history could soon come full circle.

Utah-based resort developer Pelorus Group bought the resort — which included included a restaurant, beach cottages, an inn, a ferry landing and a golf course — in 2011 from a group of creditors who reclaimed the Daufuskie Island Resort & Breathe Spa after the business went under.

Now, the resort owners — a group of Pelorus Group-affiliated companies managed by company president J.T. Bramlette — find themselves on the verge of losing the property to unpaid creditors of their own.

A phone number previously used by Bramlette was disconnected when called Monday and bankruptcy attorneys representing the group could not be reached.

The roughly 400-acre resort’s main creditor — Odeon Singapore Limited — is out more than $27.5 million and has set a minimum bid price for the property at $19 million, according to court documents.

In 2011, Bramlette told The Island Packet and Beaufort Gazette he bought what is now the Melrose Resort for $13 million.

Six years later, the restaurant is closed, the inn and beach cottages vacant, the greens and fairways at the golf course are empty.

The “properties were in poor condition when (the current owners) acquired them,” according to court documents filed late last month by Melrose Resort’s attorneys.

The owners intended to renovate and improve the resort, but “unfortunately, (they) encountered delays in there plans ... which increased costs and exhausted the funding the (owners) had obtained,” the filing claims.

The roughly 30-year old resort’s tumultuous past can be traced back to at least 2009, when Bill Dixon, the owner of the struggling Daufuskie Island Resort & Breathe Spa, borrowed an undisclosed sum from AFG, a Denver-based private investment group.

Soon after, Dixon filed for bankruptcy.

That same year, Montauk Resorts, a North Carolina company managed by former NFL player and developer Mike Bass, offered $49.5 million for the property, but financing for that deal never materialized.

After a 2010 auction failed to produce a qualified bidder, a judge divided the resort’s assets and allowed creditors to claim many of them.

The Pelorus Group bought the resort’s core from AFG the following year.

At that time, Bramlette vowed to “to revitalize this entire project.”

Instead, the resort and its owners have spent the better part of a decade fending off lawsuits, lendors, and government agencies.

In 2015, the S.C. Department of Health and Environmental Control discovered two underground tanks used to store gasoline and diesel fuel at the boat landing were not in compliance with state regulations. A Pelorus Group subsidiary was hit with a $35,000 fine.

Bramlette is personally listed as a defendant in at least four Beaufort County civil lawsuits since 2013.

Last year, the company and its affiliates owed Beaufort County nearly $500,000 in unpaid property taxes.

In April, the resort was sued by a former employee who claimed in court documents that she went without a paycheck from Aug. 15, 2016, through Oct. 19, 2016, despite promises she would be paid.

Last year, U.S. Securities and Exchange Commission investigators in California began seeking financial documents from the Pelorus Group and Bramlette in an attempt to locate about $22 million in allegedly unaccounted for investment cash.

That inquiry stemmed from a series of earlier investigations into possible federal securities law violations by several investment and wealth management firms with alleged ties to Bramlette and the Pelorus Group, according to court documents filed in October.

Jacob Cooper, whose name appears in court documents related to the SEC’s attempts to gather Pelorus Group documents, was arrested in May and accused of defrauding investors out of as much as $65 million.

After the arrest, lawyers representing Pelorus Group and Bramlette said the company had cooperated with SEC investigators and denied any affiliation with Cooper.

In the months following, SEC officials have repeatedly declined to comment on whether any investigation into Bramlette or the Pelorus Group is ongoing.

A bankruptcy sale hearing for Melrose Resort is scheduled for 10:30 a.m. on Aug. 30 in Charleston.

This story was originally published July 10, 2017 at 3:16 PM with the headline "Pending bankruptcy sale just the latest chapter in saga of Daufuskie’s Melrose Resort."