SecProbe.io

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

November 19, 2004

Mail Stop 0409

Michael E. Lawrence
Chief Executive Officer
Sea Pines Associates, Inc.
32 Greenwood Drive
Hilton Head, South Carolina  29928

Re:  Sea Pines Associates, Inc.
Schedule 13E-3 filed October 21, 2004
File No. 05-56415

Preliminary Proxy Statement on Schedule 14A filed October 21, 2004
File No. 0-17517

Dear Mr. Lawrence:

      We have limited our review of your filings to the going-
private
aspects of your proposed transaction, and we have the following
comments.  Where indicated, we think you should revise your
documents
in response to these comments.  If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary.  Please be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Schedule 13E-3
1. Please advise us why you believe that William H. Goodwin, Jr.
and
the executive officers and directors of Sea Pines who will
continue
to serve in their positions with the merged entity should not be
added as filing persons on the Schedule 13E-3, as these affiliates
appear to be engaged in the going private transaction.  Otherwise,
these persons should be individually included as filing persons on
the Schedule 13E-3.  For help in making this determination, please
review Section II.D.3 of our Current Issues Outline, publicly
available at our website at www.sec.gov.

2. Please note that each filing person must individually comply
with
the filing, dissemination and disclosure requirements of Schedule
13E-3.  Therefore, you will need to revise the disclosure to
include
all of the information required by Schedule 13E-3 and its
instructions for any filing persons added in response to the
preceding comment.  In addition, RG Subsidiary must provide all of
the disclosure required by Schedule 13E-3 since you have included
it
as a filing person.  For example, include a statement in the proxy
materials as to whether each filing person believes the Rule 13e-3
transaction to be substantively and procedurally fair to Sea
Pine`s
unaffiliated security holders and an analysis of the material
factors
upon which each filing person relied in reaching such a
conclusion.
See Item 8 of Schedule 13E-3, Item 1014 of Regulation M-A and
Question & Answer No. 5 of Exchange Act Release No. 34-17719
(April
13, 1981).

3. We note your extensive disclosure on page 3 discussing why you
do
not believe Riverstone is an affiliate of Sea Pines within the
meaning of Rule 13e-3 under Section 13(e) of the Exchange Act,
despite the fact that you have filed a Schedule 13E-3 in
connection
with the proposed transaction. Given Riverstone`s ownership of
26.6%
of Sea Pines common stock, Riverstone`s ability to block any
merger,
and Greenhill and Co.`s advice to the board that the pursuit of an
alternative transaction would not be productive given Riverstone`s
ability to block any alternative transaction, the inclusion of
this
disclosure does not appear appropriate.  Please revise to remove
it.

4. Please note that each and every report, opinion, consultation,
proposal, or presentation, whether written or oral, received by
the
company or any affiliates from any third party and materially
related
to this offer constitutes a separate Item 1015 report that must be
described in detail in the proxy statement.  This requirement
includes final and preliminary reports.  In addition, you must
file
any written materials as exhibits pursuant to Item 9 of Schedule
13E-
3 and Item 1016(c) of Regulation M-A.  This includes, for example,
any written documentation furnished in connection with an oral
presentation, such as analyses, talking papers, drafts, summaries,
outlines, etc.  For instance, file the following items as exhibits
to
the Schedule 13E-3 or advise us why they are not materially
related
to the Rule 13e-3 transaction:

* any additional written materials provided in connection with PKF
Consulting`s evaluation in 2003 and Greenhill & Co.`s advice
throughout 2004;
* the analyses related to Sea Pines` tax situation prepared by
Ernst
& Young during April 2004, as referenced in the opinion letter
filed
as Annex B to the proxy statement; and
* the "recent appraisals of several properties" as referenced in
the
second full paragraph on page 17.

Item 16.  Exhibits

5. We note that you have included the opinion of Greenhill &
Company
dated as of July 27, 2004.  Please advise us supplementally
whether
you will receive an updated fairness opinion.  If so, please keep
in
mind that you will need to revise your proxy materials to provide
a
summary of any updated fairness opinions or valuations and file
any
corresponding written materials as exhibits to the Schedule 13E-3.
If not, revise the section relating to the board`s recommendation
to
discuss how the date of Greenhill & Co.`s analysis impacted the
board`s decision to rely on the advisor`s opinion, if at all.

6. If a written opinion was prepared by legal counsel at a filing
person`s request and communicated to the filing person pertaining
to
the tax consequences of the transaction, file the tax opinion
pursuant to Item 1016(h) of Regulation M-A.  If a tax opinion will
be
filed, summarize it in the proxy statement, clearly stating that
the
disclosure is a summary of tax counsel`s opinion and disclose that
the opinion is filed as an exhibit to your Schedule 13E-3.

Schedule 14A

7. Please revise the structure of your proxy statement so that all
of
the disclosure required by Items 7, 8 and 9 of Schedule 13E-3
appears
in a "Special Factors" section at the beginning of the proxy
statement, immediately following the Summary.  Refer to Rule 13e-
3(e)(1)(ii).

Questions and Answers about the Merger, page v

8. Under "What vote is required to approve the merger agreement?",
disclose the total percentage of shares held by Riverstone,
directors
and members of Sea Pine`s management that will be voted in favor
of
the merger agreement, and indicate the remaining percentage of
shareholder vote needed to approve the merger.

Summary Term Sheet, page 1

9. Please revise your introductory paragraph to confirm that you
have
included disclosure with respect to the most material terms of the
proposed transaction.  Refer to Item 1001 of Regulation M-A.

10. In the Q&A section or the Summary Term Sheet, include a
statement
regarding the  determination of each filing person as to the
fairness
of the transaction to the unaffiliated shareholders.

Interests of Certain Persons in the Merger, page 2

11. Expand the disclosure to clarify and quantify all conflicts of
interest to provide unaffiliated shareholders with more meaningful
disclosure.  Briefly summarize all interests of insiders that are
separate and distinct from the interests of common shareholders
generally, including employment agreements, board positions and
fees,
committee fees, etc.  Also ensure that you provide full disclosure
in
the body of the document.

Fairness of the Merger, page 3

12. Generally, the fairness discussion should only address
fairness
to unaffiliated shareholders.  See Item 1014(a) of Regulation M-A
and
Question and Answer No. 19 in Exchange Act Release No. 34-17719.
As
a result, revise your disclosure to discuss fairness to
unaffiliated
shareholders rather than fairness to common stockholders
generally,
which presumably includes officers, directors and other
affiliates,
or explain to us why such disclosure is necessary.  Please revise
here and throughout your document.  In addition, it is unclear why
the belief that Riverstone has a deep understanding of your
character
supports the fairness determination.  Revise accordingly.

13. Please revise to indicate whether the Board considered any
negative factors when determining the fairness of the merger.  If
so,
please revise its fairness determination on page 24 to have one
list
of factors favoring the transaction, and a separate list of
factors
not supporting the transaction.  If it failed to consider any
negative aspects of the transaction, then disclose that fact.

Merger Financing and Guarantee, page 4

14. Please revise to indicate the total amount of debt Riverstone
will assume on completion of the merger and the related
transactions.
Also, indicate whether Riverstone will be required to pay off any
debt upon completion of the merger.  If so, revise to indicate the
total amount and the source of those funds.

Disclosure Regarding Forward-Looking Statements, page 8

15. Section 27A of the Securities Act and Section 21E of the
Exchange
Act specifically exclude from the safe harbor statements made by
an
issuer in connection with a going-private transaction.  Please
revise
to delete the reference to the safe harbor provisions.

Required Vote, page 12

16. Please revise to clarify that the structuring of the vote does
not by itself ensure fairness to the unaffiliated shareholders.

Action to be Taken at the Special Meeting, page 13

17. The use of discretionary voting authority to postpone or
adjourn
the meeting to solicit additional proxies is a substantive
proposal
for which proxies must be independently solicited.  See Rule 14a-
4.
As a result, provide another voting box on the proxy card so that
shareholders may decide whether to grant a proxy to vote in favor
of
postponement or adjournment for the solicitation of additional
proxies.  Please note that your undertaking to refrain from
exercising discretionary authority to use proxies voting against
the
merger proposal is not sufficient.

Solicitation of Proxies, page 14

18. Please supplementally confirm, if true, that you will not
solicit
proxies on the Internet.  Be advised that all written soliciting
materials, including scripts to be used in soliciting proxies over
the telephone, must be filed under the cover of Schedule 14A.  See
Rule 14a-6(b) and (c).

The Companies, page 15

19. Please revise to provide a more detailed description of
Riverstone`s business and background.

Background of the Merger, page 16

20. Revise to disclose why each filing person is undertaking the
proposed transaction at this time.  See Item 1013(c) of Regulation
M-
A.  In this regard, address why they are taking the company
private
at this time in the company`s operating history despite the fact
that
Sea Pines generated net income for the nine-month period ended
July
31, 2004.  We also note that the loan from Wachovia is not due
until
late 2005.

21. We note your statement that Sea Pines has a high debt burden.
Please revise to quantify Sea Pine`s debt.  Further, quantify the
amount the board determined was necessary for asset improvements
on
its properties.

22. Revise where appropriate to disclose in full the financial
projections that Sea Pines developed as well as the management
forecasts that you reference on pages 19, 28 and 30.

23. We note that the Settlement Agreement and Release required a
$5.9
million payment to Grey Point Associates.  Please revise to
indicate
the rate of interest on the loan, and how and when Sea Pines will
make interest payments.

24. Disclose any limitations placed on the authority of the
special
committee and any arrangements for compensating the individuals
who
served on the committee.

25. You indicate in the fourth paragraph on page 16 that PKF
Consulting`s assignment was to provide the Board with information
relating to the fair market value of Sea Pines as an ongoing
business.  However, you indicate in the penultimate paragraph on
page
17 that PKF Consulting delivered an analysis focused on gross
value
of the assets of Sea Pines, if sold individually.  Please revise
or
advise.

26. Please revise to discuss the factors that would cause the
potential aggregate value of Sea Pines to exceed $100 million.  In
this regard, we note your statement in the penultimate paragraph
on
page 17.  Please also revise to clarify why the amount could be as
much as 20% lower.

27. Quantify the "substantial" tax costs referenced in the first
full
paragraph on page 18.

28. Please revise the third paragraph on page 18 to clarify why
the
board instructed the special committee to contact Riverstone.  Had
Mr. Goodwin expressed an interest in purchasing the remaining
shares
of Sea Pines not already held?

29. You indicate on page 18 of your Proxy Statement that the
special
committee contacted William H. Goodwin Jr. to discuss Riverstone`s
interests in acquiring Sea Pines.  You also indicate that the
board
of directors discussed other potential acquirers.  Please revise
to
expand your disclosure with respect to the other potential
acquirers.
Did you contact other potential acquirers?  If so, did the other
potential acquirers, other than Mr. Goodwin, meet with the special
committee?  If not, please revise to so state.  We may have
further
comments.

30. We note your statement on page 20 that Riverstone viewed a
range
of $6.00 to $8.00 per share as fair value for Sea Pines common
stock.
Please revise to indicate upon what basis Riverstone made this
determination on May 6, 2004.

31. Please revise the final paragraph on page 20 to provide more
complete disclosure as to why Mr. Goodwin believed that an offer
by a
purchaser willing to pay more than Riverstone would "not be in the
interests of the Sea Pines community."  Please confirm that the
board, in fulfilling its fiduciary duties in connection with the
proposed transaction, considered Riverstone`s offer not in light
of
the interests of the Sea Pines community, but in light of the
interests of Sea Pines common shareholders.

32. Please revise the fourth paragraph on page 21 to describe with
greater detail what comprised the negotiation of terms that took
place between May 28, 2004 and June 24, 2004.

33. Please revise the final paragraph on page 21 to describe the
nature of the costs Riverstone believed ranged in the nature of $5
million to $7 million, equivalent to approximately $1.35 to $1.88
per
share.

Reasons for the Recommendation of the Board of Directors, page 24

34. All of the factors listed in Instruction 2 to Item 1014 of
Regulation M-A are generally relevant to the fairness
determination
in a Rule 13e-3 transaction and should be discussed in
considerable
detail.  Revise the discussion to address all of the factors
listed
in Instruction 2 to Item 1014 of Regulation M-A.  In this regard,
we
note that this section does not address the factors listed in
Instruction 2 (i), (ii), (iv), (v) and (vi).  If the board relied
on
the analysis of another party, such as the financial advisor, to
fulfill this disclosure obligation, it must expressly adopt the
conclusion and analyses of the party that performed the Item
1014(b)
analysis.  If the board did not consider one or more of the
factors,
state that and explain why the factor(s) were not deemed material
or
relevant.  For example, you may state that the board did not
consider
current market prices or purchase prices paid in previous
purchases
because there were none.  See Question and Answer No. 20 of
Exchange
Act Release No. 34-17719.  Also revise to quantify the company`s
going concern and liquidation value, if known.

35. Please revise your disclosure to explain why the board
believes
the transaction is fair to unaffiliated shareholders given that it
did not solicit offers from other potential buyers other than
Riverstone.  In this regard, we note your statement in the last
paragraph o