Members of a bankrupt local golf club are asking the court to help them get their initiation deposits – as much as $22,000 per person – back from the club’s developer and owners.
In January, the Dominion Club in western Henrico County filed for Chapter 11 bankruptcy protection after it was faced with a $1.7 million tab of initiation deposit refunds due to about 100 members at the end of 2010.
On Monday, the bankruptcy creditors committee, made up of seven current and former Dominion Club members, filed a lawsuit in federal bankruptcy court seeking $11.6 million from various entities, all tied to HHHunt Corp., one of the area’s largest real estate developers. (You can see the lawsuit here).
The committee claims in the suit that Hunt and the other entities have always supported the Dominion Club’s operations and its deficits and that initiation refunds due now and more than $10 million due down the road should also be paid by the owners.
“Hunt and all its entities surely have $11.6 million, and while they bankrupted the Dominion Club and left nearly 800 members holding the bag, we feel there are entities and companies that are liable for that,” said Nick Nichols, the chairman of the creditors committee.
Dominion Club, along with the related Wyndham community, was built by HHHunt. Harry Hunt owns 4.5 percent of the club, according to court records. HHHunt Corp. owns 0.5 percent, and the Hunt Family Trust owns 95 percent.
The committee named as defendants HHHunt Corp., Loch Levan Land Limited Partnership, HHHunt/Wyndham Development Corp., Hunting Hawk LLC and Hunt Family Trust II.
Loch Levan is technically the club’s landlord. Hunting Hawk LLC is the operator of the course, according to the suit. (HHHunt also developed a local golf course named Hunting Hawk, but this case is unrelated to that course).
Robert Westermann, an attorney with Hirschler Fleischer representing the defendants, said the charges lack merit.
“We disagree with the allegations and claims in the complaint and will be responding accordingly through appropriate filings in the Bankruptcy Court,” Westermann said in an email response to BizSense. “It is our hope that these proceedings will not have a negative impact on the club’s restructuring efforts.”
That restructuring, at least when the bankruptcy was first filed, was aimed at having the Dominion Club become member-operated.
Vernon Inge, an attorney with LeClairRyan who represents the Dominion Club in bankruptcy, is working to make sure that transition still takes place.
“I’m still hopeful we can get all these issues resolved and get a plan going forward to save the club,” Inge said.
Nichols, a Wyndham resident and member of the club since 1994, isn’t so sure the members will be amenable to the idea of taking over the club because of the recent events.
“That’s probably not going to happen because [the defendants] don’t want to sell the club and they’ve been unreasonable relative to leasing the club,” Nichols said. “Financially it just isn’t viable.”
There are lingering questions about how this suit will play out and how it will affect the future of club.
The lawsuit provides one possible scenario.
“The Defendants failed and refused to honor their obligations to fund operating deficits of the Debtor beginning in December 2010,” the suit claims. “Unless this Court decrees the right of the Debtor to have the Defendants fund any operating deficits the Debtor cannot fund in the future, the Debtor will not have the ability to retain members of the Club in sufficient numbers to make the Club viable.”
The creditors committee is represented by Tyler Brown, an attorney with Hunton Williams. BizSense was unable to reach Brown by deadline.
A message left for HHHunt Corp. President David Reemsnyder was not returned by press time.
Meanwhile, back at the club, Nichols said it’s mostly still country club life as usual for its nearly 800 members.
“We’ve asked the membership to be patient,” Nichols said. “I know there have been a few resignations, but not many. And people have continued to pay their dues and enjoy their club.”
But Nichols said this latest suit could put a chink in some of that support.
“I don’t know what’s going to happen as a result of the lawsuit,” Nichols said. “That may change the members’ perspectives.”
Michael Schwartz is a BizSense reporter. Please send news tips to Michael@richmondbizsense.com.
Shameful what HHHunt is trying to pull off here! They have made and continue to make millions off our community. They certainly have the money to re-pay members, yet they are doing all they can to cheat the very community that put them on the map and made Harry Hunt one of the richest individuals in Virginia. Dan Schmitt, a local HHHunt executive who lives in the community is at the center of this mess. How can he show himself in public is beyond me!
If I was someone considering a new home in a Hunt community like Rutland, Twin Hickory, Charter Colony, Lindon Pointe, Magnolia Green etc. I would be very cautious about doing business with an organization like this! Richmonders have very long memories and do not take kindly to outsiders coming in, getting rich and then cheating our citizens.
Time for HHHunt to head back to the mountains! You are not welcome here anymore!
April 6, 2011 – I purchased and HHHunt home in 2006 in the CoolWell sub-division in Hanover county the home will be 5 yrs old this Nov. I have had nothing but problems with the home since I purchased it. I have had two (2) roof leaks that caused extensive damage to my interior Florida Room. A new home should never encounter a leaking roof. Hunt had a quick solution for my roof leak a “little caulking” here and there to remedy the problem. Needless to say that did not solve my leaking roof problem. The second leak did more extensive damage to my interior wall and ceiling. To top it all off I was out of warranty (1 yr.), that tells me that Hunt has no confidence in its product (Home). Now to move onto the next problem my Heat Pump (A/C) unit the coil is leaking and will have to be replaced this year . At last count in our subdivision here alone we have had 17 heat pump failures all COILS. Hunt nor the manufacturer is bearing the cost of replacing the coils on these units the expense is all up to the homeowner. The whole purpose of buying a new home is so you wont have any failures of any kind for years to come. To name other failures in the Coolwell community are leaking water pipes that have burst in walls knock on any dorr out here and we all have similar stories of problems with HHHunt homes. My advice for anyone thinking of purchasing a new home from HHHunt is knock on the doors and speak to home owners of that community in which your interested prior to buying. I have pictures and videos of the hell and mess I have gone through with my HHHunt home for anyone to see if they are interested. At 64 years of age I have owned several homes in my day, I am now regretting the day I ever bought a home from HHHunt. This has not been a home but a nightmare. Everytime I hear a noise in this house I wonder what is going to be the next failure. Sof if your considering an HHHunt home my advice is “ENTER AT YOUR OWN RISK. The homes in my subdivision are “Cookie Cutter” homes at best. there is no quality in my opinion Hunt nickels and dimes you ofr every little upgrade. For $309,000.00 I should have the best of everything in a home, my point is if your looking for quality in home dont buy from HHHunt. HHHunt if your homes are so good why don’t you have a 10 year warranty on your homes ? All I ever got form Hunt was excuses and quick fixes. My story is just one of many in my subdivision. All Hunt cares about is the bottom line $$$$$$$$$$. If you do buy a home from HHHunt be sure you have great home owners insurance because your going to need it. Thanks for letting me express my feelings on HHHunt and their properties. My advice to any homebuyer is DON’ T BUY AN HHHUNT HOME.
peeeeeople………….pleeeease don’t respond if you are going to talk about your house’s quality or about HHHunt screwing club members. When you join a club you take on certain risks. BAd economy, more golf courses=problems. You club members are a bunch of babies, maybe the government will bail you out! Maybe there should be an insurance you can buy to protect you from losing your deposit when joining a country club! Silly people with a little bit of money join stupid golf courses so they can hang out with others with little money. Golf clubs are stupid in this state being that 2 months are too hot, 4 months too cold and a bunch of wet or windy days mixed in! Dominion should be a public course for $35. Who wants to spend a day playing golf in peoples back yards. I hate courses with houses all over them.
I really don’t feel any sympathy for the members here. It seems pretty clear what Hunt’s intentions where in setting up that type of arrangement. If you couldn’t figure that out, maybe your $22,000 is in better hands with someone else.
The more I read about this situation, the more I feel like this is Exhibit A for the reason club members should own their club, not a corporation. Club members are always going to be more invested in the health of the club than a corporation ever will be. It’s just the nature of the beast.
I have mixed feelings for the plaintiffs. On the one hand, getting your initiation back is the exception to the rule. For most people joining clubs an initiation fee is part of the cost, I am sure other club members such as myself were surprised to read about this arrangement. On the other hand, a deal is a deal even if it was a bad idea in the first place.
Re: Mr. Powers. Clearly you do not get why the majority of people join clubs. The differences between the private and public golf experience are like night and day. Rounds are far faster, the amenities better, the camaraderie of playing with people you know, etc. And most golfers I know golf the better part of 12 months a year, not six. Additionally, a big advantage of a private club is not having to feel like you get your money’s worth every time you go out in regards to weather. If it starts raining after 12 holes, no big deal.
People don’t (or at least shouldn’t) join clubs because it is an all-you-can-golf bargain comnpared to public golf (it isn’t). They join because the overall experience is magnitudes more enjoyable than five-and-a-half hour rounds on public courses. And like almost all things worth having, that comes with a cost. And that cost usually includes an initiation fee.