NEW YORK ( TheStreet) -- Coco Beach Golf & Country Club, owner of a Puerto Rico golf course that licenses the Trump brand, has collected approval of bidding procedures.

Judge Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for the District of Puerto Rico in Old San Juan on Friday, Aug. 28, signed an order authorizing the bidding procedures, which designate OHorizons Global as stalking horse with an offer of $2.04 million plus the assumption of contracts and payment of cure costs. OHorizons submitted a $75,000 good-faith deposit with its offer.

Inclan rejected objections at an Aug. 10 hearing from acting U.S. Trustee Guy G. Gebhardt and the Puerto Rico Tourism Development Fund. In his order, Inclan said the best interests of the debtor's estate would be served by granting approval of the bid procedures.

Interested parties must submit bids $75,000 higher than the stalking-horse bid, or $2.115 million, by a Nov. 16 bid deadline, along with a $75,000 good-faith deposit.

If Coco Beach received more than one qualified bid, an auction would be held Nov. 23 at which subsequent offers would have to increase in increments of at least $50,000.

Inclan has set a Dec. 1 sale hearing. The debtor expects to close a sale by March 31, 2016.

OHorizons would be entitled to a $60,000 breakup fee and expense reimbursement of up to $50,000 if it lost at auction.

Gebhardt asserted in court papers that the debtor's assets, which include two 18-hole championship golf courses and a luxury clubhouse, were originally transferred to Coco Beach by an insider and valued at $16.6 million, but the property now allegedly has a value of $1 million. The trustee said the debtor has not established whether the sale price is fair and reasonable.

Other concerns included the sale motion's lack of description as to whether a public or private auction would be held for the assets. It also didn't specify the costs for which each party would be responsible and whether the debtor would provide a carve-out from sale proceeds for unsecured creditors.

The sale motion also didn't state whether the debtor would seek a conversion, dismissal or liquidation after the sale.

The company, which rebranded its property as the Trump International Golf Club Puerto Rico through a 2008 licensing deal, filed for Chapter 11 on July 13. On the same day it submitted motions to approve an asset purchase agreement with OHorizons and the bidding procedures.

Debtor counsel Charles Cuprill of Charles A. Cuprill PSC was not immediately available for comment on Tuesday.

Neither Republican presidential candidate Donald Trump nor Trump Organization has ownership in the golf and country club. The facilities are owned by Coco Beach Development, Coco Beach Holdings and R3 Development.

Coco Beach asserted in court papers that it needed to file for Chapter 11 protection after its cash flow was affected by Puerto Rico's adverse economic situation, which has reduced tourism. The golf club owner said it has failed to raise sufficient income to remain competitive.

The debtor had defaulted on its $26.4 million in secured revenue bonds issued by the Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, a government agency commonly known by its Spanish acronym, AFICA. The bonds have maturities between June 20, 2012, and Dec. 20, 2034, and interest rates ranging between 2.25% and 6.6%.

AFICA provided the bond proceeds to Coco Beach for a March 2011 refinancing, with the golf club required to make payments to cover the principal and interest. AFICA is only required to make bond payments through loan repayments from the golf club. The tourism agency, however, has been covering the payments anyway.

The bonds are secured by the mortgage on Trump International Golf Club.

Coco Beach listed $9.2 million in assets and $78 million in liabilities in its petition. The golf course facilities had an appraised value of $1 million as of May 14, according to court papers.

The debtor listed gross income of $1.1 million in the first quarter and $3.08 million last year.

Trump International Golf Club occupies 1,000 acres in Rio Grande, Puerto Rico, near San Juan. The property has two 18-hole golf courses, a 46,000-square-foot clubhouse, a cart barn and a maintenance building. The golf courses were designed by PGA professional touring golfer Tom Kite.