Nicklaus Companies, the golf empire named for one of golf’s greatest names, has filed for Chapter 11 bankruptcy protection.

Before we go off half-cocked, please note that this is not Jack Nicklaus filing for bankruptcy. It is Nicklaus Companies, the house that Jack built and ultimately tore down after winning a $50-million lawsuit against the company he founded.

Sound confusing? Let’s see if we can clear it up a bit.

What is the Nicklaus Companies?

The Nicklaus Companies is a global business built on Jack’s name. It includes Nicklaus Design, one of the world’s largest golf architecture and golf real estate development firms. Nicklaus Design has created more than 420 courses worldwide. The Nicklaus Companies also includes the lifestyle, marketing, licensing and golf equipment businesses under the Nicklaus and Golden Bear brands.

More importantly, it represents the commercial side of Jack’s legacy. Basically, anything you can buy with Jack’s name, image or likeness on it comes from the Nicklaus Companies. That includes everything from Jack Nicklaus wines and calendars to Jack Nicklaus headwear, apparel and golf balls. Collaborations using Jack’s name with companies such as Vice Golf and Stix also fall under the Nicklaus Companies purview.

The Nicklaus Companies began in 1970 as Golden Bear International, an umbrella for Jack’s growing off-course ventures. It included his golf course design business, licensing and endorsements, golf instruction centers and non-golf businesses such as oil development and radio broadcasting.

In the early ‘80s, Jack bought a controlling interest in MacGregor but an ill-fated development plan at the historic St. Andrews Country Club in Yonkers, N.Y., left the company overextended and near bankruptcy. Nicklaus was forced to sell MacGregor to save his development company.

In 2007, Nicklaus Companies was formally established through a $145-million deal between Jack and financier Howard Millstein. This new entity was designed to expand the Nicklaus brand globally, particularly through international golf course and real estate development.

This is the company that Jack himself sued this year for defamation.

Why the lawsuit?

By 2017, tensions were brewing between Nicklaus and Millstein, particularly over control of branding and course design rights. With Millstein assuming a stronger role in management, Jack resigned from his executive role that year. The resignation triggered a five-year non-compete agreement preventing Jack from designing golf courses, endorsing products or using his own name in any commercial venture.

In 2022, as the non-compete was ending, Nicklaus wanted court confirmation to use his own name again. Nicklaus Companies promptly sued Jack to prevent that from happening. A New York judge dismissed that lawsuit this year.

Not long after that dismissal, Jack filed his defamation suit against Nicklaus Companies. The suit claimed that Nicklaus Companies executives spread false stories to associates and the media, claiming Jack secretly negotiated a $750-million deal with LIV Golf. Further, the suit alleged the company was also spreading stories that the 85-year-old Nicklaus was mentally unfit, suffering from dementia and unable to manage his own affairs.

Last month, a Florida jury found that the Nicklaus Companies had “actively participated in the false publishing of facts” that exposed Nicklaus to ridicule, mistrust and contempt. The jury awarded Jack $50 million in damages.

Why the bankruptcy filing?

The verdict and damages proved to be a fatal blow to Nicklaus Companies. Varying sources report that the company was already facing $500 million to $1 billion in liabilities against only $10 million to $50 million in assets.

It was against those numbers that Nicklaus Companies on Friday filed for Voluntary Chapter 11 bankruptcy in Delaware. In a statement published on its website, the company says the filing will allow it to “proactively address its long-term funded indebtedness,” as well as the lawsuit verdict.

The statement also says the company disputes the Florida court verdict and is exploring its legal options and a possible appeal. In the meantime, the plan is to restructure debt while continuing operations. According to the statement, employees and clients of the Nicklaus Companies “can be assured that business operations will proceed as usual during the restructuring process.”

What does this mean for Jack and the Nicklaus Companies?

Pending appeal and bankruptcy resolution (which could impact the settlement), it’s $50 million in Jack’s pocket. For Nicklaus Companies, the outcome is less certain.

The liability-to-asset imbalance shows the company was already in trouble. Chapter 11 bankruptcy allows a company to continue operating while it reorganizes its debts (Chapter 7 bankruptcy requires liquidating its assets). The company does say it has secured financing to keep operations going for the foreseeable future but losing such a high-profile lawsuit for defaming Jack-freaking-Nicklaus doesn’t do it any favors.

Additionally, filing for bankruptcy protection means Nicklaus Companies can temporarily continue operating. Survival, however, depends on long-term financing and resolving the $50 million it owes Jack. Chapter 11 will give the company time to appeal and delay payment on that judgment.

In the meantime, Jack can design golf course projects using his own name. Ironically, he can’t use his own Golden Bear logo, which still belongs to Nicklaus Companies.

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