Melrose and the Daufuskie Island Resort Opens Again!!! Great News........

Date: May 8, 2009RE: OPENING OF MELROSE GOLF COURSEIt is with considerable pleasure that I am able to announcethat Melrose golf course operations will resume effective May 11, 2009. Plans call for a "soft opening" that includes homeowners, spa members, Melrose Club members, guests, Haig Point members, and other Daufuskie Island residents, although every effort will be made to bring public play onto the course as soon as possible.Clearing the way for this action was an authorization I received this past Wednesday, May 6, from the United States Bankruptcy Court, District of South Carolina, to borrow up to $1 million from Beach First National Bank of Myrtle Beach, SC which may be supplemented by an additional loan of up to $500,000 from a second source as necessary. In addition to the opening of the golf course the funding will be used to pay a variety of aging debts and current bills as well as the operation of resort assets involved in the bankruptcy until a sale of assets can be realized.When I was named Trustee six weeks ago I made it clear there was a pressing need to restore stability to resort operations while pursuing an equitable resolution for the creditors involved. I also pointed out that while there are many needs and conflicting interests, collaboration was in everyone's best interests. It is important for you to understand that this success was a direct result of cooperation among Daufuskie groups over the past six weeks. The more we work together, the more all parties will benefit. Hopefully this first step in bringing back the golf operation convinces everyone that cooperation is not only the best course, but the only course. I am encouraged. You should be as well.As Trustee I have arranged for the operation of the Melrose Golf Course by CGL of Savannah, Inc., an affiliated company to The Club Group, Ltd. based on Hilton Head Island, SC. Principals include Mark King, president of both entities and Alan Cale, CGL of Savannah chief operating officer.CGL of Savannah will manage the Melrose Golf Course, the clubhouse and related golf operations. Although more details will be forthcoming, homeowners and members will pay only cart fees of $35 per person for 18 holes. Public play will be at an introductory rate of $75 through June that includes a golf cart, greens fee and ferry and land transportation. Light food and beverage service will be available, with seating inside and outside the clubhouse and on the verandas. Hopefully the golf course opening should help galvanize the rental market on Daufuskie, including the approximately 35 rental units that are part of the bankruptcy action.Ferryboats will continue to make the circuit between the Broad Creek Marina and the Melrose Landing, although alternate arrangements that will increase capacity are currently being reviewed. Once again, cooperation is essential for success.You may also be interested to learn that other commercial operations are jockeying for position in what they see as a high potential resort opportunity. One restaurant group, Bobby Joe's with an on-going operation at the Dataw Marina, has sent a letter of intent to open a facility at the Melrose Beach Club. Plans call for a full restaurant, Tiki bar, gift shop, management of the existing general store and oversight of the pool and related facilities. I plan to make a decision on that shortly.After things being too dark for too long, it's nice to see this sort of first steps activity. I would strongly urge you to work with your leadership and with me to continue on this path. If we follow it intelligently and cooperatively, everyone will benefit. I plan to write you at regular intervals with updates as the action continues. Thank you for your help so far.Sincerely,Robert C. OnoratoTrusteeDaufuskie Island Properties, LLC Chapter 11 BankruptcyCase No. 09-00389-jw