Sea Island Company Reaches Agreement to Sell Substantially All Assets to Limited Partnership Formed by Investment Funds Managed by Oaktree Capital Management, L.P. and Avenue Capital Group

To Facilitate Sale, Company and Certain Subsidiaries File Voluntary Petitions for Chapter 11 Relief

Secured Bank Lenders Support Plan

Businesses to Remain Intact; DIP Loan Ensures Resorts Continue Operating as Usual

SEA ISLAND, Ga.--()--Sea Island Company, a private resort and real estate development company, today announced that it has reached an agreement to sell substantially all of its assets to Sea Island Acquisition LP (“SIA”), a limited partnership formed by investment funds managed by the global investment firms Oaktree Capital Management, L.P. and Avenue Capital Group. The sale agreement follows a robust process – begun late last year – in which Sea Island Company reviewed all of its strategic alternatives and determined that this agreement is the best possible outcome for the Company and its stakeholders.

Under the terms of the agreement, the Company’s businesses will remain intact and retain their core values and culture. After the sale, the businesses will continue under the leadership of Bill Jones III, Chairman and Chief Executive Officer, and David Bansmer, President and Chief Operating Officer.

To facilitate the sale, Sea Island Company, Sea Island Coastal Properties, LLC and their subsidiaries today filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. The Chapter 11 cases and sale enjoy the support of all of the Company’s secured lenders and are expected to be completed by year-end. In the interim, the Company has secured a debtor-in-possession (DIP) loan from certain of its secured bank lenders, providing access to additional liquidity should it be required during this period.

The action, filed in the Southern District of Georgia in Brunswick, allows the Company’s businesses to continue normal operations. All of Sea Island Company's operations, including The Lodge, The Cloister, The Cloister Spa and Fitness Center, The Sea Island Club, the Ocean Forest Golf Club, The Sea Island Beach Club, as well as the golf facilities, are open and business will continue without any disruptions to the superior service provided to members and guests. All reservations will be honored and guests will enjoy all of the facilities and experiences they booked at the time of their reservation.

In conjunction with its Chapter 11 filing, Sea Island Company today filed a Plan providing for the sale of substantially all of its assets free of its approximately $600 million of existing secured debt. SIA will own and operate the resort and golf courses without any interruption in services. All obligations owed by Sea Island Company to its trade vendors will be assumed by SIA. All existing employees of Sea Island Company will be offered employment by SIA. All club members will be offered the opportunity to continue to enjoy the same benefits and services at their respective clubs and receive full credit for their deposits paid.

The Board of Directors of Sea Island Company has approved the Asset Purchase Agreement, which is subject to a court-supervised auction process. The agreement was filed with the Court today, along with the DIP financing commitment and a variety of “First Day” motions that will allow the Company to continue to conduct its business as usual.

“We are very pleased to have reached an agreement with an investment group that has come to know Sea Island well and appreciate what made us special from the start,” stated Bill Jones III, Chairman and Chief Executive Officer of Sea Island Company. “Our commitments to our members, employees, guests and community were carefully considered throughout our review of strategic alternatives and we believe this is the best outcome. The purchasers have seen first-hand the value of what we have built – the finest collection of resort assets in the world with the highest accolades and best service. The additional financial strength gained through the transaction provides an ideal foundation for our future.”

Sea Island Company President and Chief Operating Officer David Bansmer added, “Today’s actions are the culmination of a comprehensive process initiated by Sea Island Company’s management and Board of Directors to put our financial challenges definitively in the past and secure a more certain future for our businesses. After completing the Chapter 11 process and the related asset purchase agreement, our businesses will be financially strong – with the same superior service and southern hospitality.”

Sea Island Company's financial advisors are FTI Consulting and Goldman Sachs & Co., and its legal advisor is King & Spalding LLP.

Information about the proposed sale and Sea Island Company's Chapter 11 proceedings is available on the Company's website at www.ourfuture.seaisland.com. Information about the claims process and court filings can be accessed at www.epiqsystems.com. Vendor inquiries can be directed to 1- 888-886-6162 or vendors@seaislandnews.com.

About Oaktree Capital Management

Oaktree Capital Management L.P. is an international investment manager headquartered in Los Angeles with approximately $75 billion in assets under management as of June 30, 2010. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in fixed income, private equity and real estate. Oaktree’s clients include primarily institutional investors, including pension plans, foundations and sovereign funds, and high net worth individuals. Oaktree was founded in 1995 by a group of principals who have worked together since the mid-1980s. Headquartered in Los Angeles, the firm today has approximately 600 employees and offices in 14 cities worldwide.

About Avenue Capital Group

Avenue Capital Group is a global investment firm focused on undervalued opportunities in the private and public debt, equity and real estate in the U.S., Asia and Europe. The firm is headquartered in New York, with offices in London, Luxembourg and Munich, and eight offices throughout Asia. Avenue oversees approximately $18.2 billion of assets under management as of June 30, 2010 on behalf of a sophisticated global base of institutional investors, the majority of which is pension funds, and also includes family offices, foundations, insurance companies and sovereign wealth funds. Avenue was founded in 1995 and draws on the skills and experience of more than 300 employees worldwide.

About Sea Island

A private resort and real estate development company founded in 1926, Sea Island Company today owns and operates Sea Island Resorts, featuring two of the world’s most exceptional destinations: the Forbes Five-Star Cloister at Sea Island and The Lodge at Sea Island Golf Club, a Forbes Five-Star and AAA Five-Diamond property. Sea Island Resorts encompasses The Golf Learning Center, two championship golf courses, the Forbes Five-Star Georgian Room restaurant, Sea Island Beach Club, Camp Cloister, the Tennis Club, Yacht Club, Shooting School and Forbes Five-Star Cloister Spa. A recent transformation of the resort has married the company’s storied history with unparalleled 21st century amenities. Sea Island’s website is www.seaisland.com.

Contacts

for Sea Island Company
Michael Geczi, 312.553.6735
michael.geczi@fd.com

Contacts

for Sea Island Company
Michael Geczi, 312.553.6735
michael.geczi@fd.com